Shell gets extra time to process data for North Sea gas prospect

Oil major Shell has reaffirmed its commitment to drill an exploration well on the Pensacola gas prospect in the UK North Sea together with its partner Deltic Energy after getting a short extension from the authorities to process the seismic data.

Deltic’s Southern North Sea assets, including the Pensacola prospect. - Shell is the operator of Pensacola
Deltic’s Southern North Sea assets, including the Pensacola prospect. Source: Deltic Energy

The Pensacola prospect is located in Licence P2252 where Shell is the operator with a 70 per cent interest and Deltic Energy is its partner, holding the remaining 30 per cent interest.

Back in August, Shell delivered the processed 3D seismic data over the Pensacola Zechstein Reef prospect ahead of drilling the well, which is expected in 2H 2021.

In an update on Thursday, Deltic Energy reported that Shell, in its capacity as the operator of the licence, has reiterated to Deltic and the UK Oil and Gas Authority (OGA) its plan to drill the high impact, play opening Pensacola Prospect and that it remains scheduled to be drilled in 4Q 2021.

A significant amount of technical work has been and continues to be undertaken by the Shell/Deltic Joint Venture.

Following the 3D seismic, which was shot over the licence last year, the JV is pleased to confirm that the seismic processing completed to-date and interpretations of the available data have demonstrated a robust image over Pensacola, which supports the prospectivity originally recognised by the JV at the time of the farm-in agreement, Deltic said.

This progress has allowed well planning on Pensacola to start. The well design work is underway and competitive scoping of the exploration well is in the process of being completed.

The Covid-19 has impacted the work schedule of the seismic processing; in particular, the logistical restrictions which have affected the JV’s ability to analyse the seismic data together.

One aspect of this has been the identification of the presence of chalk at the seabed in a small section in the north of the seismic dataset and, while this has no material impact on the reservoir, it requires more intensive seismic processing to improve image resolution.

Accordingly, the operator has requested and the UK Oil and Gas Authority has granted a short extension to the date by which the contingent well commitment becomes a firm well commitment until 31 March 2021. The well remains scheduled to be drilled in Q4 2021.

The additional processing which is being carried out by Shell will further de-risk the Pensacola prospect, help refine the range of volumes and exact well location, and is a key enabler of Shell’s internal approval processes.

Other workflows including refinement of recoverable gas resources, analogue studies, detailed well engineering and development options are continuing in parallel with this additional seismic processing work, which will support the ongoing well planning process.

Shell will continue to carry 100 per cent of Deltic’s costs until the well investment decision is made.

Graham Swindells, Chief Executive of Deltic Energy, commented: “I am very happy to report Shell’s continued commitment to explore for gas with us at the high impact Pensacola Prospect and that the well remains on track to be drilled in 2021.

“The additional time granted will allow final work to be completed to ensure we get the best place, best designed well to test this prospect – our work has only increased our excitement for a North Sea play that is proven in many parts of Europe.

“Despite the challenging times, the rigorous technical work means Pensacola has moved into well design and planning, while at the same time we have recently been provisionally awarded a series of new licences including the drill-ready Cadence Prospect in order to continue executing our strategy of building a ‘conveyer belt’ of North Sea exploration opportunities”.

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