U.K. oil company Deltic Energy and supermajor Shell, joint venture partners on Licence P2437 in the U.K. Southern North Sea, have made a positive well investment decision to drill the high impact Selene gas prospect, Deltic Energy announced on Tuesday.
The U.K. industry's regulator (North Sea Transition Authority) has been informed of the well investment decision which will facilitate the license entering its next phase. While the timing of a well slot has yet to be confirmed and will be subject to drilling schedules, this is expected to be firmed up as the partners progress well planning.
Under the terms of the original farm-out with Shell, Deltic holds a 50% working interest in the License but will be carried for 75% of the costs of drilling and testing the well on the Selene prospect, up to $25 million and, as a result of the well investment decision, Shell will be appointed operator of the license.
The Selene Prospect off the North East coast of England is 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%.
With technical and commercial evaluation complete, the Joint Venture now moves on to detailed well design, planning, rig procurement and other key preparations to support drilling operations.
Graham Swindells, Chief Executive of Deltic Energy, said, "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. Adding another committed well to our program, 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."