UK firm boosts portfolio with new license close to North Sea gas field

AIM-listed natural resources investing company Deltic Energy has accepted one of the two licenses provisionally awarded under the UK’s 33rd offshore licensing round by the country’s regulator North Sea Transition Authority (NSTA).

The firm accepted the offer to hold a 100% working interest in license P2672. The new asset, situated adjacent to the West Sole gas field in the North Sea, covers blocks 47/5e, 47/10c, and 48/6c, and contains the Pharos and Teviot discoveries. 

The UK player previously shared that financial and political matters were important factors to consider when deciding whether accepting further licenses in the UK is in its best interest following the notice of awards of the third tranche of licenses in May.

The 47/05d-6 well, drilled by a consortium led by Dana Petroleum in 2013, was originally thought to be part of a standalone prospect formerly called Pharos. However, based on the combination of a preliminary evaluation completed before the application process and updated structural mapping, the Pharos discovery and the Blackadder prospect are now considered a single Leman sandstone structure.

Deltic CEO, Graham Swindells, noted: “The Blackadder project has many analogous attributes to the Selene prospect, where the reworking of legacy datasets has unearthed a potential missed pay opportunity of material scale. Blackadder’s location, in close proximity to existing infrastructure that requires new third party gas to defer decommissioning, should enhance its value in a mature basin where new licences are likely to become increasingly scarce.”

Swindells added that the work on the legacy data in preparation for farm-out will continue over the next year, ahead of the drilling of an appraisal well on Blackadder, which is expected in due course.

According to the UK player, reprocessing legacy 3D seismic data will be at the center of the initial three-year Phase A work program commitments for the license. This is anticipated to improve reservoir imaging and refine the structural model to further de-risk the Blackadder structure at a nominal cost.

Based on the firm’s calculations, the Blackadder/Pharos project holds 66 billion cubic feet (bcf) of P90 resources, 165 bcf of P50 resources, and 293 bcf of P10 resources. The 47/10-8 well, part of the Teviot discovery, contains 9 bcf of P90 resources, 17 bcf of P50 resources, and 27 bcf of P10 resources. Both have a 65% geological chance of success (GCoS).

Last month, Deltic decided to withdraw from the Shell-operated Pensacola gas discovery in the Southern North Sea as it did not manage to find a farm-out partner to cover the appraisal costs despite obtaining a deadline extension. 

The firm also decided to sell a partial stake in Shell’s license P2437, containing the Selene prospect, to Dana Petroleum in February. The farm-out was completed in April, with drilling expected to start this summer.