TIDMDELT
RNS Number : 0104H
Deltic Energy PLC
01 December 2020
1 December 2020
Deltic Energy Plc/ Index: AIM / Epic: DELT / Sector: Natural
Resources
Deltic Energy Plc ("Deltic" or 'the Company')
Formal Award of Six Licences in the UK's 32(nd) Offshore
Licensing Round
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 report that further to the provisional award of new licences in
the UK's 32nd Offshore Licensing Round announced on 3 September
2020, these six new licences comprising twelve blocks have now been
formally awarded to Deltic by the UK Oil and Gas Authority and that
each of the licences take effect from today.
The licences and blocks formally awarded are as follows:
Region Licence Equity % Blocks
Southern North P2558 30 41/5b & 42/1b
Sea
--------- --------- ----------------------
P2567 100 43/11 & 43/12b
-------------------------- --------- ----------------------
P2560 100 42/13b, 42/17 & 42/18
-------------------------- --------- ----------------------
P2561 100 42/19 & 42/20b
-------------------------- --------- ----------------------
P2562 100 42/22, 42/23
-------------------------- --------- ----------------------
Central North
Sea P2542 100 22/17a
--------- --------- ----------------------
All licences have been awarded to the Company on a 100% equity
position, with the exception of P2558, which has been jointly
awarded with Shell UK holding a 70% working interest.
The Board views these blocks as highly prospective and
containing a variety of exploration prospects which will
significantly enhance both the pipeline of potential drilling
opportunities and the overall prospective resources associated with
the Company's assets as these areas are matured during the initial
term of the licences.
The new licences reinforce the Company's exploration focussed
strategy which is based upon creating a steady 'conveyor belt' of
licences that can be matured and support a long-term programme of
exploration wells with discoveries supporting the longevity of
existing infrastructure and the development of new gas production
hubs.
Southern North Sea Licences
Five of the six new licences awarded to Deltic are in the
Southern North Sea Gas Basin, where the Company has now amassed a
total of ten licences. When combined with its existing licence
position, the new awards enhance the Company's strong strategic
position in the gas basin, controlling over 2,733 km(2) of
contiguous licences stretching from south of the Breagh gas field
over to the Cupertino area located towards the west of the Cygnus
gas field.
P2567 - Cadence
The Company is particularly pleased to have been awarded Licence
P2567 which sees the Company regaining blocks 43/11 and 43/12,
containing the Cadence prospect, despite these blocks being the
subject of significant competition. These blocks are located
immediately north of the Pegasus and Andromeda discoveries which
are operated by Spirit Energy. The Company has worked extensively
on the seismic data and other datasets to enhance its understanding
of this area which has resulted in a more robust interpretation
over the intra-Carboniferous Cadence prospect and the
identification of additional prospectivity beneath the Base Permian
Unconformity ("BPU"). The Board considers this BPU prospect, the
Cordova prospect, to be highly analogous to the recent Andromeda
North discovery which was drilled by Spirit Energy in 2019 on the
block immediately to the south of 43/12b.
The extensive work already carried out on the Cadence prospect
means it is effectively drill ready, and the Company is now
starting the process of seeking the best possible partner to drill
this exciting prospect. A summary of the key prospects identified
on this licence are set out below:
Prospect Block Reservoir Prospective Resources GCoS
Name Formation
BCF %
-------------------------- -----
P90 P50 P10
------ -------- -------- -----
Cadence
(1) 43/11 Scremerston 30 143 472 26
------- ----------------- ------ -------- -------- -----
Fell Sandstone 188 454 861 16
------- ----------------- ------ -------- -------- -----
Cordova Namurian/ early
(1) 43/12b Westphalian 32 124 329 26
------- ----------------- ------ -------- -------- -----
Bathurst
(2) 43/11 Bunter Sandstone 119 275 571 22
------- ----------------- ------ -------- -------- -----
Bassett
(2) 43/11 Bunter Sandstone 36 128 303 37
------- ----------------- ------ -------- -------- -----
Total 405 1,124 2,536
------- ----------------- ------ -------- -------- -----
1 Deltic estimate as per the Oil and Gas Authority licence
application
2 2016 Competent Person's Report
P2558 - Pensacola North
The Board is also delighted that the Company has been awarded an
additional licence covering two-part blocks, 41/5b & 42/1b
jointly with Shell which is adjacent to the Deltic/Shell JV's
existing Pensacola licence (P2252). The Company has a 30% working
interest in the licence and will fulfil the role of operator as the
technical work begins. This area has been largely imaged on the new
Bluewater 3D survey shot by the Deltic/Shell JV in 2019 and
contains a potential northern extension of the Pensacola
prospect.
P2560, P2561, P2562 - Breagh South Area
The Company has also been awarded three licences in the
underexplored area to the south of the Breagh gas field and its
existing licence P2424, where the Cortez prospect is currently
being progressed. This is a proven gas bearing area with a limited
number of well penetrations and a mixture of 2D and 3D seismic data
of varying vintage and quality which will respond well to modern
reprocessing. The Company considers this area to have significant
potential, with multiple leads mapped in the Carboniferous with
additional upside in the Zechstein and the Leman Sandstone in the
southern-most blocks. Given the knowledge and experience gained
from working in this area for a number of years coupled with recent
industry success, the Company should be well placed to reinvigorate
interest in this underexplored and overlooked area.
Central North Sea Licence Awards
P2542
P2542 in the Central North Sea contains two prospects in the
Jurassic Fulmar Sandstone which have been previously identified and
which the Board believes have significant upside potential. Further
work will be undertaken during the initial licence period to mature
these prospects.
Graham Swindells, Chief Executive of Deltic Energy,
commented:
"We are delighted to be able to confirm that these new licences
have been formally awarded following the announcement of
provisional awards in early September 2020. Our company was one of
the most successful applicants in what was a highly competitive
Licensing Round and the extent of the awards further reinforces the
strong strategic position we have built up in the Southern North
Sea and our commitment to continuing to grow and advance our
exploration assets towards drilling, as we have done with Shell on
Pensacola and Selene. We are now commencing work to progress the
many opportunities on these exciting new licences and look forward
to providing further updates in due course."
Qualified Person
Andrew Nunn, a Chartered Geologist and Chief Operating Officer
of the Company, 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
GCoS: Geological Chance of Success
Prospect i ve Res o urces: 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.
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
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