REG - Deltic Energy PLC - Operational & Commercial Update

Deltic EnergyAnnouncement

05/12/2023 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231205:nRSE6411Va&default-theme=true

RNS Number : 6411V  Deltic Energy PLC  05 December 2023

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

 

5 December 2023

 

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

Operational & Commercial Update

 

Deltic Energy Plc, the AIM-quoted natural resources investing company with a
high impact exploration, appraisal and development portfolio focused on the
Southern North Sea ("SNS"), is pleased to provide a commercial and operational
update.

 

Highlights

 

·    Selene exploration well on track to be drilled in Q3 2024

·    Appraisal well planning underway on the Pensacola discovery, with the
well scheduled for late 2024

·    Site survey work continues ahead of a two well drilling programme in
2024

·    Rig selection and contracting process for both wells is ongoing

·    Progress continues to be made on processes to realise value on Selene
and Pensacola

·    Awaiting results of UK's 33(rd) licensing round

 

2024 Drilling Programme

 

The Company is pleased to report that preparatory works for both the Selene
and Pensacola wells, due to be drilled in 2024, are progressing according to
plan.

 

Selene

 

The first of the two wells to be drilled in 2024 is an exploration well on the
Selene gas prospect on Licence P2437. The initial geophysical site survey on
Selene was completed during the summer and the data acquired used to inform
the geotechnical survey which is due to commence in the first half of December
2023. The site surveys are designed to ensure the safe installation of the rig
at the selected well location. The site surveys are another key step on the
path to drilling this high impact, low risk prospect.

 

The Selene prospect is considered one of the largest unappraised structures in
the Leman Sandstone fairway of the Southern Gas Basin and Deltic estimates
Selene to contain gross P50 Prospective Resources of 318 BCF of gas (with a
P90 to P10 range of 132 to 581 BCF) with a geological chance of success of 70
per cent.

 

Following completion of the well design process, critical long lead items
including casing have been identified and procurement processes are advanced.
Accordingly, Selene remains on track to be drilled in Q3 2024.

 

Pensacola

 

The oil and gas discovery made by the JV earlier in 2023 and Deltic's
subsequent resource upgrade has confirmed Pensacola as one of the most
exciting discoveries in the Southern North Sea in recent years. Since then,
Deltic has continued to work closely with its JV partners to develop an
appraisal strategy for the Pensacola discovery.

 

The JV is expected to formalise a positive well investment decision in
relation to the Pensacola appraisal well in December 2023. Planning for the
appraisal of the Pensacola discovery is well advanced and, subject to
regulatory approvals, the drilling of the appraisal well on Pensacola remains
on track to be drilled after the Selene well in late 2024.

 

Site survey works focussed on the Pensacola appraisal well location are due to
be carried out in the first half of 2024. The rig tendering process for Selene
and Pensacola is ongoing.

 

Having made a significant discovery with its first well at Pensacola, the
Company is excited about drilling its next exploration well at Selene, which
has the potential to add another significant discovery to Deltic's asset base.
 Accordingly, we look forward to providing further updates as we progress
through the planning phase towards the commencement of operations on both
Selene and Pensacola.

 

Selene & Pensacola - Value Realisation

The Company continues to work on a number of potential options to both realise
value and reduce future capital expenditure and has received a considerable
level of interest in both Pensacola and Selene from industry. Deltic continues
to engage with a number of counterparties in relation to a range of potential
transactions on both assets and looks forward to updating the market in due
course.

 

Licence Updates

The Company submitted applications for licences in the UK's 33(rd) licensing
round in January and completed interviews with the NSTA relating to those
applications during Q2 of 2023. The process of awarding licences has taken
longer than in previous years and as such the Company continues to await the
outcome of this licensing round.

 

Following Capricorn's decision to exit from its exploration assets outside
Egypt, the Company had proposed to take forward the two most prospective
licences, P2567 and P2428, subject to the North Sea Transition Authority
("NSTA") granting an extension of the current licence terms to allow time to
bring in an alternative partner. The NSTA has ruled against an extension to
P2567, and this licence was subsequently relinquished on 30 November 2023.
 The Company may consider reapplying for this licence in the next UK
licensing round and, with the benefit of the extensive technical work carried
out over the last couple of years, the Company should be well placed to be
re-awarded this licence.  Deltic continues to seek an alternative partner in
relation to P2428 where the current phase of the licence is currently due to
end on 31 March 2024.

 

Financial

The Company's cash position as at 30 November 2023 was £6.1 million, in line
with management expectations.

 

Graham Swindells, Chief Executive of Deltic Energy, commented:

 

"This continues to be a busy year for Deltic, as we lay the foundations for
what will be a very exciting and active 2024. Plans for the drilling programme
for Selene and Pensacola are progressing well and we are working closely with
our partners to advance and refine those, whilst also progressing options
within our portfolio to realise value. We look forward to 2024 as we remain
focussed on creating value for our shareholders."

 

 

**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                                               Tel: +44 (0) 20 3328 5656
 Adviser)

 David Hart / Alex Brearley (Corporate Finance)

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

 Callum Stewart / Simon Mensley / Ashton Clanfield

 Canaccord Genuity Limited (Joint Broker)                                         Tel: +44 (0) 20 7523 8000

 Adam James

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

 Patrick d'Ancona / Finlay Thomson / Kendall Hill

 

 

Qualified Person

Andrew Nunn, a Chartered Geologist and Chief Operating Officer of Deltic, is a
"Qualified Person" in accordance with the Guidance Note for Mining, Oil and
Gas Companies, June 2009 as updated 21 July 2019, of the London Stock
Exchange. Andrew has reviewed and approved the information contained within
this announcement.

 

Glossary of Technical Terms

 BCF:                                         Billion Cubic Feet

 Estimated Ultimate Recovery or EUR:          Estimated Ultimate Recovery is defined as those quantities of petroleum which
                                              are estimated, on a given date, to be potentially recoverable from an
                                              accumulation, plus those quantities already produced therefrom

 Geological chance of success (GCoS):         for prospective resources, means the chance or probability of discovering
                                              hydrocarbons in sufficient quantity for them to be tested to the surface.
                                              This, then, is the chance or probability of the prospective resource maturing
                                              into a contingent resource.  Prospective resources have both an associated
                                              chance of discovery (geological chance of success) and a chance of development
                                              (economic, regulatory, market and facility, corporate commitment and political
                                              risks). The chance of commerciality is the product of these two risk
                                              components. These estimates have been risked for chance of discovery but not
                                              for chance of development.
 mmboe or million barrels of oil equivalent:  million barrels of oil equivalent. Gas is converted at 5.98 BCF to 1 MMBOE

 P90 resource:                                reflects a volume estimate that, assuming the accumulation is developed, there
                                              is a 90% probability that the quantities actually recovered will equal or
                                              exceed the estimate.  This is therefore a low estimate of resource

 P50 resource:                                reflects a volume estimate that, assuming the accumulation is developed, there
                                              is a 50% probability that the quantities actually recovered will equal or
                                              exceed the estimate.  This is therefore a median or best case estimate of
                                              resource

 P10 resource:                                Reflects a volume estimate that, assuming the accumulation is developed, there
                                              is a 10% probability that the quantities actually recovered will equal or
                                              exceed the estimate.  This is therefore a high estimate of resource

 Prospective Resources:                       Are estimated volumes associated with undiscovered accumulations. These
                                              represent quantities of petroleum which are estimated, as of a given date, to
                                              be potentially recoverable from oil and gas deposits identified on the basis
                                              of indirect evidence but which have not yet been drilled.

 PRMS:                                        the June 2018 Society of Petroleum Engineers ("SPE") Petroleum Resources
                                              Management System

 

Standard

Estimates of resources have been prepared in accordance with the PRMS as the
standard for classification and reporting.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDUPGBWPUPWPGC