Photo: Illustration; Source: Shell

Shell and Deltic commit to drilling high-impact North Sea prospect

UK-headquartered energy giant Shell and its London-based partner Deltic Energy have decided to drill a high-impact well on a gas prospect in the UK sector of the North Sea. As a result of this decision, Shell will become the new operator of the licence.

Shell and Deltic Energy are joint venture partners in Licence P2437, which contains the Selene prospect, with Shell holding a 50 per cent interest and Deltic the other 50 per cent. Shell entered the licence in 2019.

The two have made a positive well investment decision to drill the high-impact Selene gas prospect situated in the UK Southern North Sea off the North East coast of England, revealed Deltic Energy on Tuesday. This comes after the JV in April this year sought an extension of the licence from the North Sea Transition Authority (NSTA) to Phase A.

The prospect is located approximately 20 kilometres from infrastructure associated with the Shell-operated Barque gas field which ultimately feeds the Bacton gas processing plant.

Graham Swindells, Chief Executive of Deltic Energy, remarked: “This is a very exciting time for Deltic as we move into the next phase of our strategy, building on the strong platform created by farm-outs to both Shell and Capricorn. The commitment to drill this material, high-impact, low-risk gas prospect is another highly significant milestone for Deltic and our team.”

The London-based player confirmed that the UK industry’s regulator, the NSTA, has been informed of this well investment decision, which will facilitate the licence entering its next phase. Deltic further explained that the timing for a well slot is yet to be confirmed and will be subject to drilling schedules. The company expects this to be firmed up as the joint venture progresses well planning.

Furthermore, under the terms of the original farm-out with Shell, Deltic holds a 50 per cent working interest in the licence but will be carried for 75 per cent of the costs of drilling and testing the well on the Selene prospect, up to $25 million. As a result of this well investment decision, Shell will be appointed as the operator of the licence, its London-based partner confirmed.

Deltic Energy underlined that the Selene prospect is one of the largest unappraised structures in the Leman Sandstone fairway of the Southern Gas Basin, estimated 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.   

The company stated that it is looking forward to progressing this next phase with technical and commercial evaluation complete. The joint venture is now moving on to detailed well design, planning, rig procurement, and other “key preparations” to support drilling operations.

“Adding another committed well to our programme, following recent confirmation that Pensacola will be drilled in September, represents further endorsement of the quality of Deltic’s assets as well as demonstrating the success of our strategy to create a conveyor belt of exploration opportunities moving from licensing to drilling with world-class partners in place,” added Swindells.

As a reminder, Shell hired Maersk Drilling’s Maersk Resilient harsh-environment jack-up rig for the drilling of the Pensacola well in late June 2022.

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Located to the northwest of the Breagh gas field in the Southern North Sea, Pensacola is a Zechstein Reef prospect and Deltic estimates that it contains gross P50 Prospective Resources of 309 BCF.