TIDMDELT
RNS Number : 0710G
Deltic Energy PLC
23 November 2020
23 November 2020
Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural
Resources
Deltic Energy Plc
("Deltic" or "the Company")
Licence P2428 - Prospectivity Update
Deltic Energy Plc, the AIM-quoted natural resources investing
company progressing its high impact exploration and appraisal
portfolio focused on the Southern and Central North Sea , is
pleased to provide further information in relation to its Licence
P2428, which contains the Cupertino Prospect (the "Cupertino Area")
following completion of detailed technical evaluation of this key
Southern North Sea licence.
Licence Background
Licence P2428 was awarded to the Company in the UK's 30(th)
Offshore Licensing Round with an effective date of 1 October 2018.
Preliminary work completed by Deltic to support the application
process identified the potential for significant prospectivity in
the deeper Carboniferous section. Deltic also recognised the
limitations of the pre-existing legacy 2D seismic datasets and the
potential uplift in data quality which could be achieved through
modern reprocessing workflows.
Throughout 2019, the Deltic technical team worked closely with
its selected contractors to reprocess 852 line kilometres of
vintage 2D data using a modern Pre-stack Depth Migration ("PSDM")
workflow which resulted in a significant uplift in data quality.
The technical work completed since the reprocessed seismic data was
delivered has not only matured the Cupertino Prospect but has also
identified significant previously unrecognised prospectivity in the
Rotliegend northern feather edge play as well as the emerging
Zechstein Reef play.
The licenced area also contains the depleted and decommissioned
Forbes Gas field which produced gas from the Triassic Bunter
Sandstone between 1985 and 1995, and which has been previously
evaluated for its gas storage potential and its possible
suitability for CO(2) storage in the future.
Prospectivity Summary
Three geographical prospects have been identified on the
licence, which the Company believes are of suitable scale for
future commercialisation. The Prospective Resources associated with
each of these prospects is summarised in the table below.
Prospect Status Reservoir Formation Prospective Resources GCoS
Name (100% Working Interest)
BCF %
----------------------------- -----
P90 P50 P10
-------- ------- ---------- -----
Cupertino Prospect Scremerston Formation 103 379 1,060 26
---------- ----------------------- -------- ------- ---------- -----
Richmond Prospect Rotliegend Leman 62 211 547 20
---------- ----------------------- -------- ------- ---------- -----
Carboniferous BPU 9 32 97 30
---------------------------------------------- -------- ------- ---------- -----
Plymouth* Prospect Z2 Zechstein Reef 32 282 1,267 19
---------- ----------------------- -------- ------- ---------- -----
Total 205 904 2,971
---------------------------------------------- -------- ------- ---------- -----
*NB: this is a 'whole trap' volume but the structure does extend
into unlicensed acreage to the east
Graham Swindells, CEO of Deltic, commented:
"The strength and progression of Deltic's growing asset base and
its pipeline of drilling prospects continue to be enhanced as we
further refine the multiple opportunities it holds. Our technical
team continues to produce exceptional work, uncovering more
previously unrecognised prospectivity in this underexplored part of
the basin.
With combined P50 recoverable gas resources in excess of 900 BCF
or the equivalent to in excess of 150 million barrels of oil, these
prospects are clearly material in terms of their overall scale both
individually and collectively. In addition to our Selene and
Pensacola prospects with Shell, these Cupertino stacked prospects,
coupled with our recently re-acquired Cadence prospect, followed by
our other recent licence awards, continue to deliver our stated
strategy of developing a conveyor belt of exploration drilling
opportunities of material scale. Our attention will now turn to
attracting the best possible partner to help us take these
opportunities forward towards drilling."
Cupertino Prospect
The Cupertino Prospect is a 4-way dip closed intra-Carboniferous
prospect in the Scremerston Formation which is a proven producing
reservoir at the Breagh Gas Field and at the Crosgan Discovery
located 40 kilometres to the West.
The prospect is mapped on various vintages of legacy 2D data and
covers an area of approximately 68 km(2) with the structural crest
at approximately 3,500m TVDSS and a potential hydrocarbon column
height of 220 metres. Based on the work completed to date, Deltic
has estimated P50 GIIP for the Cupertino prospect at 705 BCF with a
P90 to P10 range of 258 BCF to 1,615 BCF. The company has based its
recovery factors on the limited data available from analogous
fields and would expect these recoverable resource numbers to be
further refined as more drilling data becomes available.
The larger prospect area is divided into a number of fault
blocks and would be much better resolved with the benefit of new 3D
seismic which the Company believes would be required to support a
well investment decision in the future.
Further intra-Carboniferous prospectivity in the deeper Fell
Sandstone Formation, which was recognised at the time of
application, remains intact. However, the 2D seismic data quality
at this level is not sufficient to fully define a prospect and this
target will be revisited once new 3D seismic data becomes available
across this area.
Richmond Prospect
The Richmond Prospect is primarily a Rotliegend Leman Sandstone
opportunity with upside in the underlying Carboniferous within the
associated BPU closure. The Richmond prospect is a 3-way dip and
fault sealed structure with many genetic similarities, including a
northern sediment source, to the giant Cygnus field located 50 km
to the East, and currently the largest producing gas field in the
UK.
The Richmond Prospect overlies the deeper Cupertino Prospect and
covers an area of approximately 70 km(2) with the structural crest
at approximately 3,040m TVDSS and a potential hydrocarbon column
height in excess of 150 metres. Based on the work completed to
date, Deltic has estimated P50 GIIP for the Richmond prospect at
494 BCF with a P90 to P10 range of 161 BCF to 1,152 BCF. Recovery
factors are based on analogous fields that produce from similar
sands in the more mature parts of the basin to the south.
Plymouth Prospect
The Plymouth Prospect is a previously unrecognised Zechstein
Reef which is located in a similar paleogeographic setting to the
Pensacola prospect on Licence P2252 which Shell farmed into in
2019.
The reef structure covers an area of approximately 161 km(2) and
builds up to approximately 250 metres above the regional basinal
carbonate platform. The structure is mapped based on a number of
different 2D seismic surveys of varying vintage and quality and the
Deltic team expects the acquisition of new 3D over this area would
significantly de-risk this opportunity.
Hydrocarbons are likely to be sourced from the early
Carboniferous basin to the south and are expected to be primarily
gas, similar to that produced from Cygnus. Deltic currently
estimates a P50 GIIP for the Plymouth Lead of 481 BCF with a P90 to
P10 range of 56 BCF to 1,990 BCF with recovery factors used
previously at Pensacola to determine prospective resources.
The Plymouth structure does extend into the unlicensed area to
the east of the P2428 boundary which is subject to development
planning for windfarms which may open up opportunities for
electrification of offshore facilities, gas to wire based
developments or offshore hydrogen production.
A second potential reef structure is noted immediately to the
west of Plymouth, although the quality of the legacy seismic data
in that area is currently insufficient to define a closing
structure or estimate potential volumes associated with this
feature.
Next Steps
Given the lack of 3D seismic data in what is a relatively
geologically complex area, Deltic anticipates that the acquisition
of modern 3D seismic data across the area will be required to
further de-risk these prospects and leads prior to drilling.
Following the conclusions of the work carried out to date,
Deltic is now starting to engage with a number of its peers and
operators with interests in the region with the aim of attracting
partners best placed to assist in the maturation of these highly
prospective opportunities towards drilling .
Qualified Person
Andrew Nunn, a Chartered Geologist and Chief Operating Officer
of DELT, is a "Qualified Person" in accordance with the Guidance
Note for Mining, Oil and Gas Companies, June 2009, of the London
Stock Exchange. Andrew has reviewed and approved the information
contained within this announcement.
**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
& Joint Broker) 5656
David Hart / Alex Brearley / Asha Chotai
(Corporate Finance)
Stifel Nicolaus Europe Limited (Joint Broker) Tel: +44 (0) 20 7710
7600
Callum Stewart / Simon Mensley / Ashton
Clanfield
Vigo Communications (PR & IR Adviser) Tel: +44 (0) 20 73900230
Patrick d'Ancona / Chris McMahon / Simon
Woods
Notes to Editors
Deltic Energy Plc (AIM: DELT) is a natural resource investing
company with multiple high impact exploration and appraisal assets
focused on the UK North Sea.
The Company's diversified asset base contain near term,
infrastructure focused oil and gas exploration drilling
opportunities in both the Central and Southern North Sea together
with larger, high impact opportunities in new play types along the
northern margin of the Southern North Sea Gas Basin. It also offers
a unique combination of high quality, low risk, low cost drilling
prospects at various stages of maturity in an area where recent
exploration has targeted both mature and new plays, resulting in
large discoveries.
Following successful farm-outs of Licences P2252 and P2437 to
Shell U.K. Limited, Deltic's Pensacola and Selene prospects are
scheduled to be drilled in 2021 and 2022. The Company is seeking to
repeat this success as it progresses its other licences awarded in
the 30th and 32nd Offshore Licensing Rounds including licence P2352
which contains the Dewar oil prospect, P2428 containing Cupertino,
P2424 containing Cortez and the recently awarded block 43/11
containing Cadence.
The Company achieved success in the UK Oil and Gas Authority's
recent 32nd Licensing Round, in which it was provisionally awarded
six new licences covering approximately 2,155.5 km(2) . All of the
new licences are being awarded to Deltic on a 100% equity basis
with the exception of one which has been jointly awarded with Shell
holding a 70% working interest, strengthening the two companies'
partnership further.
Deltic has built a strong strategic licence position in the
Southern North Sea Gas Basin and is focused on extracting much
needed gas to supply the UK's energy mix which is currently heavily
reliant on imports. Following the award of the new licences, Deltic
will have P50 prospective resources totalling 3.5 TCF (gross),
equivalent to c. 600 million barrels of oil, spread across multiple
prospects.
Glossary of Technical Terms
BCF: Billion Cubic Feet
GIIP: Gas Initially In Place
GCoS: Geological Chance of Success
PSDM: Pre-stack Depth Migration (seismic processing output)
P90: a 90% probability that a stated volume will be equalled or exceeded
P50: a 50% probability that a stated volume will be equalled or exceeded
P10: a 10% probability that a stated volume will be equalled or exceeded
TVDSS: Total Vertical Depth Subsea
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