Shell UK Ltd., operator of North Sea license P2252, has granted Deltic Energy Plc a short extension to progress discussions with potential farm-out partners that would allow Deltic to meet its 30% share of upcoming Pensacola well costs.
Against an original deadline of end May 2024, Deltic has been unable to secure a farm-out partner for Pensacola, the company said in late April, citing the “difficult state of UK equity markets, especially for smaller companies.”
The recent extension allows Deltic until June 12 to progress discussions with potential counterparties in relation to a possible transaction, it said in a June 3 update. If a deal cannot be secured within the timeframe, Deltic will be required to withdraw from the Pensacola license and transfer its interest in Pensacola to its joint venture partners, the company continued.
In February, Shell UK signed a drilling rig contract with Valaris to advance drilling of Pensacola appraisal well in the Southern North Sea, with mobilization to begin sometime in June or July of this year (OGJ Online, Dec. 5, 2023; Feb. 5, 2024).
Pensacola JV partners estimate that the Zechstein carbonate reservoir contains gross P50 hydrocarbons-in-place of 326 MMboe.
Shell UK Ltd. is operator at Pensacola with 65% interest. Deltic holds 30% and One-Dyas holds 5%.
