Shares in Deltic Energy PLC (AIM:DELT) jumped 22% after it said a Shell-drilled well it has a 30% stake in could be one of the biggest natural gas discoveries in the southern North Sea in over a decade.
Flow tests on Pensacola matched estimates, while the potential scale of the discovery was also confirmed, the company told investors in a statement.
Moreover, Deltic believes the work opens a new play focused on the Zechstein horizon, which brings an added dimension to what has long been considered a mature hydrocarbons basin.
“This discovery is a major milestone in the development of our company as we continue to execute our exploration-led strategy and progress our portfolio of high-quality drilling opportunities as we seek to create value for our shareholders,” said Deltic chief executive Graham Swindells.
“We believe that the Pensacola discovery will open a new Zechstein play in this mature basin and highlights the remaining potential of the North Sea as a source of further discoveries which can provide domestically produced natural gas, supporting UK energy security while we transition toward a net zero economy,” he added.
Pensacola flowed at an initial 4.75mln standard cubic feet per day (mmscf/day) declining to 1.75mmscf/day after 12 hours.
Being located down dip, the flow rates observed during the well test are not expected to be representative of potential future production wells which will likely target the central part of the structure, generating higher rates, Deltic said.
Based on the data garnered to date, the discovery is thought to contain between 164-519bn cubic feet of natural gas, with P50 (50% probability) estimate of 302bn cubic feet – bang in line with forecasts.
In the first half hour of trade, the shares advanced 0.6p to 3.3p.
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