REG - Deltic Energy PLC - Licence P2428 – Commencement of 3D Seismic Survey

Deltic EnergyAnnouncement

10/09/2021 07:00

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RNS Number : 3377L  Deltic Energy PLC  10 September 2021

 

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now considered to be in the public domain.

 

10 September 2021

 

Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural Resources

 

Deltic Energy Plc ("Deltic" or 'the Company')

 

Licence P2428 - Commencement of 3D Seismic Survey Following Farm Out

Deltic Energy Plc, the AIM quoted natural resources investing company with a
high impact, natural gas focussed exploration and appraisal portfolio in the
Southern North Sea, is pleased to announce, following the recent Farm Out with
Cairn Energy PLC ("Cairn") in relation to five of Deltic's gas licences in the
Southern North Sea (the "Farm Out"), the acquisition of 3D seismic data over
Licence P2428 and surrounding areas has commenced.

The Company has been informed by ION Geophysical ("ION") that the seismic
vessel, under contract to ION, has mobilised to site with survey commencement
expected on 11 September 2021. The acquisition of approximately 700km(2) of 3D
seismic data, which is focussed on the Plymouth Zechstein Reef Prospect, will
take approximately six to seven weeks to complete with processed data due to
be delivered mid-2022.

Under the terms of the Farm Out agreement, Cairn are responsible for 100% of
the costs of the associated work programme (including seismic acquisition and
processing) up to the point at which a well investment decision is made.

Completion of the Farm Out is conditional on the entering into of a Joint
Operating Agreement and obtaining standard regulatory consents from the UK Oil
& Gas Authority. Following completion of the farm out, Deltic will hold a
40% non-operated interest in Licence P2428.

 

 

Graham Swindells, Chief Executive of Deltic Energy, commented:

"To be acquiring new 3D seismic so quickly after announcing our
transformational Farm Out with Cairn is another very positive development
which will accelerate the development of our technical understanding of the
opportunities on this licence. The survey represents another important
milestone for Deltic and we are delighted to be participating in our first
field operations with our new partner. The acquisition of high quality modern
3D seismic over the licence area is a key step in de-risking future
exploration drilling on this licence."

 

 

**ENDS**

 

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 & Joint                             Tel: +44 (0) 20 3328 5656
 Broker)

 David Hart / Alex Brearley (Corporate Finance)
 Kelly Gardiner (Sales and Corporate Broking)

 Stifel Nicolaus Europe Limited (Joint                                          Tel: +44 (0) 20 7710 7600
 Broker)

 Callum Stewart / Simon Mensley / Ashton Clanfield

 Vigo Consulting (IR &PR                                                        Tel: +44 (0) 20 7390 0230
 Adviser)

 Patrick d'Ancona / Chris McMahon / Oliver Clark

 

Notes to Editors

Deltic has created a strategically located portfolio of high-quality gas
exploration licences in the Southern North Sea over a number of licensing
rounds.  These licences are located in areas that have been underexplored
despite significant discoveries such as Tolmount, Breagh, Pegasus and Cygnus,
most of which have gone on to be developed and could provide ready access to
export infrastructure for any future developments on Deltic's licence acreage.

 

 

P2428 (Cupertino Area) and P2567 (Cadence Area)

·    The P2428 licence area was awarded in the 30(th) Offshore Licensing
Round and contains prospects and leads at multiple geological levels. The key
prospect identified by Deltic is the Plymouth Prospect, a large Zechstein
carbonate build-up, which is analogous to Deltic's Pensacola Prospect and the
Crosgan discovery.  Other leads have been identified in the Leman Sandstone
and the Carboniferous sections.  The area is currently imaged on legacy 2D
seismic data dating back to the early 1990s and new 3D seismic will be
acquired to support a well investment decision on this licence.

 

·    The P2567 licence was award in the 32(nd) Offshore Licensing Round
and contains prospects in the Triassic Bunter Sandstone and the
Carboniferous.  The Carboniferous is the primary focus and Deltic has
identified the large intra-Carboniferous Cadence prospect and believes the
Base Permian Unconformity (BPU) subcrop play is also prospective across the
licence area.

 

·    Under the terms of the Farm Out Agreement, Cairn will acquire a 60
per cent. interest in each of Licences P2428 and P2567, and will be appointed
as the licence Operator, in return for paying 100 per cent. of the costs of an
agreed forward work programme up to the date on which a well investment
decision is made.

 

·    It is expected that the work programme over these two licence areas
will involve the acquisition and processing of new 3D seismic data across
P2428 and P2567 and the associated interpretation and studies required to
support a well investment decision.

 

·    Should a well investment decision be made on either of the two
licences Cairn will fund 70% of the costs of the first exploration well
drilled, subject to a gross well cost cap of USD$25 million.

 

·    Following completion of the Farm-out, Deltic will retain a 40 per
cent. non-operated interest in Licence P2428 and P2567.

 

P2560, P2561 & P2562 (South Breagh Area)

·    The P2560, P2561 and P2562 licence areas were awarded in the 32(nd)
Offshore Licensing Round and are located between two significant gas fields in
Breagh and Tolmount, located to the north and south respectively.
Exploration in the area has been constrained historically by lack of
high-quality 3D data and Deltic believes there is significant potential in the
Zechstein, Leman and Carboniferous sections across the acreage.  Having only
been recently awarded, these assets are less mature in terms of Deltic's
geological understanding compared to the Cupertino and Cadence areas.

 

·    Under the terms of the Farm Out Agreement, Cairn will acquire a 70
per cent. interest in each of Licences P2560, P2561 and P2562, and will be
appointed as the licence Operator, in return for paying 100 per cent. of the
costs of an agreed forward work programme on each licence, up to the date on
which a well investment decision is made on each licence.

 

·    The work programme over these licences is expected to involve the
purchase and reprocessing of legacy datasets to improve image quality and/or
the acquisition of new 3D seismic data across all or part of the licenced
areas.  This will be supported by the various interpretation workflows and
other studies required to make the various well investment decisions on each
licence.

 

·    All costs incurred post a well investment decision will be satisfied
by each party in proportion to their working interest.

 

·    Following completion of the Farm-out, Deltic will retain a 30 per
cent. non-operated interest in Licences P2560, P2561 and P2562.

 

 

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