Shell to drill Pensacola well next year

Shell and Deltic Energy, joint venture partners on Licence P2252, have made a positive well investment decision to drill the high impact Pensacola Prospect in the UK Southern North Sea next year. Shell will hire a rig as part of a multi-well drilling campaign.

Shell and Deltic have subsequently confirmed to The Oil and Gas Authority (OGA) that the contingent well commitment is now firm, Deltic said in an update on Monday.

Shell is the operator of the P2252 licence with a 70 per cent interest while Deltic holds the remaining 30 per cent interest.

According to Deltic, the drilling of this key well on Pensacola has the potential to be transformational for the company and is a vital step in evaluating the highly prospective Zechstein reef play which in turn has the potential to revitalise exploration in the Southern North Sea.

Back in November 2020, Shell reaffirmed its commitment to drill the exploration well on the Pensacola gas prospect together with Deltic Energy after getting a short extension from the authorities to process the seismic data.

Following re-interpretation of the new 3D seismic data acquired over the prospect, Deltic estimates that the Pensacola Prospect contains gross P50 Prospective Resources of 309 BCF (with a P90-P10 range of 39 BCF to 1,181 BCF.

This will rank Pensacola as one of the highest impact exploration targets to be drilled in the gas basin in recent years, Deltic said.

Significantly, the Shell/Deltic JV’s new interpretation of the 3D seismic data has also resulted in a much-improved view of the geological chance of success associated with the prospect which has increased materially from 20 per cent to 55 per cent.

The operator expects the well to be drilled in May 2022 and this timing allows the JV to take advantage of a drilling unit that will be contracted by Shell as part of a multi-well drilling campaign, which in turn brings advantageous day rates and operational efficiencies for the JV.

Deltic remains fully funded for its 30 per cent working interest in the well.

Deltic is continuing to work with Shell as the JV continues to mature the well design and undertake key preparatory works including well site survey and regulatory permitting.

Graham Swindells, Chief Executive of Deltic Energy, commented: “The rigorous re-evaluation of the Pensacola Prospect has validated and reinforced the fantastic work of our technical team and their initial view that the Pensacola prospect, and the Zechstein play as a whole, represented a significant missed opportunity in the Southern North Sea.

“Well planning is already underway, and we look forward to providing regular updates as we progress through the planning phase towards the commencement of operations, in addition to continuing to mature our other prospects, including Selene, towards drilling”.