LONDON – Shell U.K. has exercised an option agreement to farm into 50% of UK southern North Sea license P2437, containing the potential 291-bcf Selene gas prospect.
The company will pay license holder Cluff Natural Resources $600,000 under the arrangement, conditional on a joint operating agreement and consent from Britain’s Oil & Gas Authority.
On completion of the farm-in, Shell has indicated its intention to drill an exploration well on Selene at the earliest opportunity and will fund 75% of the cost, including testing, subject to a cap of $25 million.
Cluff secured the license under the UK’s 30th Licensing Round: the first term runs for six years.
Selene, which has been imaged by 3D seismic data, is a four-way dip closed structure in the Leman Sandstone said to bear analogies with various nearby gas fields, including the Shell-operated Barque.
Cluff considers the prospect as low risk with an estimated chance of success of 39%. It is 20 km (12.4 mi) from infrastructure associated with the Barque field which supplies gas to the Bacton processing plant on the Norfolk coast.
The partners will also evaluate other prospects on the block that are covered by existing seismic.