TIDMDELT
RNS Number : 6411V
Deltic Energy PLC
05 December 2023
Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural
Resources
5 December 2023
Deltic Energy Plc ("Deltic" or the "Company")
Operational & Commercial Update
Deltic Energy Plc, the AIM-quoted natural resources investing
company with a high impact exploration, appraisal and development
portfolio focused on the Southern North Sea ("SNS"), is pleased to
provide a commercial and operational update.
Highlights
-- Selene exploration well on track to be drilled in Q3 2024
-- Appraisal well planning underway on the Pensacola discovery,
with the well scheduled for late 2024
-- Site survey work continues ahead of a two well drilling programme in 2024
-- Rig selection and contracting process for both wells is ongoing
-- Progress continues to be made on processes to realise value on Selene and Pensacola
-- Awaiting results of UK's 33(rd) licensing round
2024 Drilling Programme
The Company is pleased to report that preparatory works for both
the Selene and Pensacola wells, due to be drilled in 2024, are
progressing according to plan.
Selene
The first of the two wells to be drilled in 2024 is an
exploration well on the Selene gas prospect on Licence P2437. The
initial geophysical site survey on Selene was completed during the
summer and the data acquired used to inform the geotechnical survey
which is due to commence in the first half of December 2023. The
site surveys are designed to ensure the safe installation of the
rig at the selected well location. The site surveys are another key
step on the path to drilling this high impact, low risk
prospect.
The Selene prospect is considered one of the largest unappraised
structures in the Leman Sandstone fairway of the Southern Gas Basin
and Deltic estimates Selene to contain gross P50 Prospective
Resources of 318 BCF of gas (with a P90 to P10 range of 132 to 581
BCF) with a geological chance of success of 70 per cent.
Following completion of the well design process, critical long
lead items including casing have been identified and procurement
processes are advanced. Accordingly, Selene remains on track to be
drilled in Q3 2024.
Pensacola
The oil and gas discovery made by the JV earlier in 2023 and
Deltic's subsequent resource upgrade has confirmed Pensacola as one
of the most exciting discoveries in the Southern North Sea in
recent years. Since then, Deltic has continued to work closely with
its JV partners to develop an appraisal strategy for the Pensacola
discovery.
The JV is expected to formalise a positive well investment
decision in relation to the Pensacola appraisal well in December
2023. Planning for the appraisal of the Pensacola discovery is well
advanced and, subject to regulatory approvals, the drilling of the
appraisal well on Pensacola remains on track to be drilled after
the Selene well in late 2024.
Site survey works focussed on the Pensacola appraisal well
location are due to be carried out in the first half of 2024. The
rig tendering process for Selene and Pensacola is ongoing.
Having made a significant discovery with its first well at
Pensacola, the Company is excited about drilling its next
exploration well at Selene, which has the potential to add another
significant discovery to Deltic's asset base. Accordingly, we look
forward to providing further updates as we progress through the
planning phase towards the commencement of operations on both
Selene and Pensacola.
Selene & Pensacola - Value Realisation
The Company continues to work on a number of potential options
to both realise value and reduce future capital expenditure and has
received a considerable level of interest in both Pensacola and
Selene from industry. Deltic continues to engage with a number of
counterparties in relation to a range of potential transactions on
both assets and looks forward to updating the market in due
course.
Licence Updates
The Company submitted applications for licences in the UK's
33(rd) licensing round in January and completed interviews with the
NSTA relating to those applications during Q2 of 2023. The process
of awarding licences has taken longer than in previous years and as
such the Company continues to await the outcome of this licensing
round.
Following Capricorn's decision to exit from its exploration
assets outside Egypt, the Company had proposed to take forward the
two most prospective licences, P2567 and P2428, subject to the
North Sea Transition Authority ("NSTA") granting an extension of
the current licence terms to allow time to bring in an alternative
partner. The NSTA has ruled against an extension to P2567, and this
licence was subsequently relinquished on 30 November 2023. The
Company may consider reapplying for this licence in the next UK
licensing round and, with the benefit of the extensive technical
work carried out over the last couple of years, the Company should
be well placed to be re-awarded this licence. Deltic continues to
seek an alternative partner in relation to P2428 where the current
phase of the licence is currently due to end on 31 March 2024.
Financial
The Company's cash position as at 30 November 2023 was GBP6.1
million, in line with management expectations.
Graham Swindells, Chief Executive of Deltic Energy,
commented:
"This continues to be a busy year for Deltic, as we lay the
foundations for what will be a very exciting and active 2024. Plans
for the drilling programme for Selene and Pensacola are progressing
well and we are working closely with our partners to advance and
refine those, whilst also progressing options within our portfolio
to realise value. We look forward to 2024 as we remain focussed on
creating value for our shareholders."
**S**
For further information please contact the following:
Deltic Energy Plc Tel: +44 (0) 20 7887
2630
Graham Swindells / Andrew Nunn / Sarah McLeod
Allenby Capital Limited (Nominated Adviser) Tel: +44 (0) 20 3328
5656
David Hart / Alex Brearley (Corporate Finance)
Stifel Nicolaus Europe Limited (Joint Broker) Tel: +44 (0) 20 7710
7600
Callum Stewart / Simon Mensley / Ashton
Clanfield
Canaccord Genuity Limited (Joint Broker) Tel: +44 (0) 20 7523
Adam James 8000
Vigo Consulting (IR Adviser) Tel: +44 (0) 20 7390
0230
Patrick d'Ancona / Finlay Thomson / K endall
Hill
Qualified Person
Andrew Nunn, a Chartered Geologist and Chief Operating Officer
of Deltic, is a "Qualified Person" in accordance with the Guidance
Note for Mining, Oil and Gas Companies, June 2009 as updated 21
July 2019, of the London Stock Exchange. Andrew has reviewed and
approved the information contained within this announcement.
Glossary of Technical Terms
BCF: Billion Cubic Feet
Estimated Ultimate Recovery Estimated Ultimate Recovery
or EUR: is defined as those quantities
of petroleum which are estimated,
on a given date, to be potentially
recoverable from an accumulation,
plus those quantities already
produced therefrom
---------------------------------------
Geological chance of success for prospective resources, means
(GCoS): the chance or probability of
discovering hydrocarbons in
sufficient quantity for them
to be tested to the surface.
This, then, is the chance or
probability of the prospective
resource maturing into a contingent
resource. Prospective resources
have both an associated chance
of discovery (geological chance
of success) and a chance of
development (economic, regulatory,
market and facility, corporate
commitment and political risks).
The chance of commerciality
is the product of these two
risk components. These estimates
have been risked for chance
of discovery but not for chance
of development.
---------------------------------------
mmboe or million barrels of million barrels of oil equivalent.
oil equivalent: Gas is converted at 5.98 BCF
to 1 MMBOE
---------------------------------------
P90 resource: reflects a volume estimate that,
assuming the accumulation is
developed, there is a 90% probability
that the quantities actually
recovered will equal or exceed
the estimate. This is therefore
a low estimate of resource
---------------------------------------
P50 resource: reflects a volume estimate that,
assuming the accumulation is
developed, there is a 50% probability
that the quantities actually
recovered will equal or exceed
the estimate. This is therefore
a median or best case estimate
of resource
---------------------------------------
P10 resource: Reflects a volume estimate that,
assuming the accumulation is
developed, there is a 10% probability
that the quantities actually
recovered will equal or exceed
the estimate. This is therefore
a high estimate of resource
---------------------------------------
Prospective Resources: Are estimated volumes associated
with undiscovered accumulations.
These represent quantities of
petroleum which are estimated,
as of a given date, to be potentially
recoverable from oil and gas
deposits identified on the basis
of indirect evidence but which
have not yet been drilled.
---------------------------------------
PRMS: the June 2018 Society of Petroleum
Engineers ("SPE") Petroleum
Resources Management System
---------------------------------------
Standard
Estimates of resources have been prepared in accordance with the
PRMS as the standard for classification and reporting.
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