Dana Petroleum joins Shell and Deltic as partner in North Sea asset

London-based and AIM-listed natural resources investing company Deltic Energy has wrapped up the sale of a partial stake in a Shell-operated license, containing a prospect, which will be drilled this summer. As a result, Dana Petroleum, a wholly-owned subsidiary of the Korea National Oil Corporation, will participate in the hydrocarbon search, which is inching closer.

Valaris 123 jack-up rig; Source: Valaris

Deltic disclosed a farm-out agreement with Dana Petroleum in February 2024 to divest a 25% interest in Shell’s license P2437, containing the Selene prospect. According to the London-based player, the required regulatory and partner consents related to the deal with Dana have been received, thus, the farm-out has been completed.

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In combination with the existing Shell carry, this divestment results in Deltic retaining a 25% non-operated interest in license P2437 and having no exposure to 2024 drilling and testing costs up to a cap above $40 million in the case of a dry hole or $49 million in a success case.

Graham Swindells, Chief Executive of Deltic Energy, commented: “We are delighted to announce completion of the farm-out of licence P2437 and formally welcome Dana to the joint venture. Well planning remains on schedule and we are looking forward to commencing Selene well operations with Shell and Dana in the summer.

While a positive well investment decision was made in July 2022, the drilling of the Selene well remains on track to begin in July 2024, following the announcement of the rig contract for the Valaris 123 jack-up rig in February 2024.  Shell’s Pensacola appraisal well and Selene are expected to be drilled as a two-well sequence.

“Our attention is now firmly focussed on drawing the Pensacola farm-out process to a successful conclusion and we look forward to updating the market in due course,” added Swindells.