Deltic Energy PLC’s (LON:DELT) interim results highlighted a strong balance sheet, with £12.8mln of cash at the end of June, 2020, and confirmed that its North Sea venture with Shell remains on-track.
The partners are committed to meeting the licence terms for the P2252 asset, which primarily includes the Pensacola prospect, and that would see a contingent well commitment become firm by December 2020. A Pensacola well could come as soon as next year.
The project was recently boosted by new 3D seismic data produced by Shell, delivering a ‘robust image’ of the Pensacola prospect.
Meanwhile, the partners also recently upgraded the prospectivity of the Selene prospect significantly, with gas-initially-in-place numbers rising by 44% to 629bn cubic feet, and geological-chance-of-success rose to 70% from 39%.
Elsewhere, Deltic continues to build up Licence P2428 and Licence P2424 which contain the Cupertino and Cortez prospects respectively.
The former is believed, by Deltic, to have “trillion cubic feet (TCF) scale” potential and it noted that the presently un-partnered project has attracted interest from certain industry parties that have requested an early review of the work completed to date.
The company expects to be able to start a formal farm-out process towards the end of 2020.
"In what has been a difficult time for the E&P sector as a whole, I am happy to report that we remain fully funded and have a well-defined drilling plan on two high impact gas prospects in the Southern North Sea which are being invested in by one of the world's largest oil and gas companies in the form of Shell,” Graham Swindells, Deltic chief executive said in the results statement.
He added: “We have a number of other attractive and increasingly technically developed prospects in our portfolio which we will continue to progress to drill readiness, providing multiple opportunities to deliver value to shareholders through our focused and technically driven approach to North Sea exploration.”
Swindells also noted that Deltic hopes to grow its portfolio further as it is awaiting the outcome of the UK's latest offshore licensing round.
The pre-revenue exploration company reported an £869,505 loss for the first half of the year, narrowed from the £1.55mln loss in the comparative period of 2019.