UK North Sea oil explorer Deltic Energy said Thursday that Capricorn Energy, its partner in five Southern North Sea gas exploration licenses Capricorn Energy had decided to withdraw from the licenses, following its recent strategic focus shift.
"Following recent changes at Capricorn that include a decision to exit from its exploration assets outside Egypt, the Company has been formally notified of Capricorn’s intention to withdraw from the Licences. As part of ongoing rationalization and high grading of its portfolio, Deltic has decided to withdraw from three of the Licences (P2560, P2561 and P2562) and therefore the JV partnership will move to relinquish these three licenses as soon as practicable," Deltic Energy said.
Deltic plans to continue with two of the five licenses - P2567 (Cadence) and P2428 (Cupertino) - following the withdrawal of Capricorn.
17 prospects identified
"Across the P2567 and P2428 acreage position, the committed work program has been completed in relation to both licenses, and Deltic has been fully carried by Capricorn through nearly US$10 million of technical work to date including the pre-funding of nearly 700km2 of new 3D seismic as well as the reprocessing of a number of legacy 3D seismic surveys.
During this intense period of geological evaluation, the JV identified and matured 17 leads and prospects in the Carboniferous with combined, gross P50 gas-initially-in-place of more than 2.6 TCF, located on Licences P2567 and P2428 . Many of these prospects are analogous with the Pegasus and Andromeda discoveries located on the blocks immediately to the south of these licenses," Deltic said.
"The current terms of Licences P2567 and P2428 are due to expire on November 30, 2023 and March 31, 2024, respectively, and, once Deltic has been re-appointed as Administrator of these licenses, Deltic intends to request an extension of the current licence terms from the North Sea Transition Authority (“NSTA”). If such extension requests are approved by the NSTA, Deltic would continue to assure and high-grade the prospects identified and matured, while seeking to attract another partner or partners to assist with future drilling activity across the two licenses," Deltic said.
Graham Swindells, Chief Executive of Deltic Energy, said: "While we would have preferred to continue in partnership with Capricorn on these exploration licenses, Capricorn has recently changed strategic direction. Our extensive work together has advanced our understanding of the potential of the area; further demonstrated the excellent prospectivity present on the two most advanced licenses and allowed us to focus on those licenses showing excellent potential. We look forward to advancing the key exploration prospects on this acreage.
Following our success earlier this year with the Pensacola gas and oil discovery, Deltic remains committed to exploring in the Southern North Sea which has the potential to provide high quality UK based employment, tax revenues and energy security while at the same time offsetting higher carbon intensity imports as the UK continues its transition towards a net zero future.”