Offshore staff
LONDON — As of June 11, Deltic Energy has withdrawn from the Shell-operated license P2252 in the UK southern North Sea, containing last year’s Pensacola oil and gas discovery.
The company was unable to secure a farm-out of part of its interest or an alternative funding solution to ensure it could sustain its future commitments related to an appraisal well later this year on Pensacola.
Deltic has formally notified the joint venture (JV) partners of its decision to start transferring its equity to them. But the company still expects to be asked to honor certain expenditure related to the well that was approved by the JV prior to issuing of the withdrawal notice, although these costs may not become fully payable until first-half 2025.
Following a farm-out earlier this year to Dana Petroleum, Deltic retains its 25% interest in P2437, also operated by Shell. The JV expects to start drilling the 318-Bcf Selene prospect in the first half of July, with operations set to last about 90 days.
In this case, Deltic has no cost exposure to the well up to a gross success case cost of $49 million.
Selene is said to be a simple Leman Sandstone structure in an established play, close to existing production infrastructure. If drilling is successful, no further appraisal would probably be needed for field development planning, so a fast-track tie-in could follow to local infrastructure.
In the central UK North Sea, Deltic is working to farm out part of its 100% stake in P2542 containing the low-risk Syros exploration prospect, close to production facilities on the Montrose-Arbroath high.
Recently the North Sea Transition Authority provisionally offered the company two licenses in Tranche 3 of the UK’s 33rd Licensing Round. Deltic has decided to focus on the award containing the Pharos-Blackadder discovery in the southern gas basin, close to production infrastructure associated with the West Sole Field.
This is said to be analogous to Selene and therefore a better option for attracting a partner for future drilling activity in the UK’s currently uncertain fiscal and political environment.
06.14.2024
