Deltic to Focus on 2 North Sea Exploration Licenses as Capricorn Withdraws

London-based Deltic Energy PLC is withdrawing from three of its five North Sea gas exploration licenses, P2560, P2561, and P2562, the company said in a recent news release.

Deltic jointly holds five gas exploration licenses in the Southern North Sea with joint venture partner Capricorn Energy PLC. Following Capricorn’s formal decision to withdraw from the licenses, the joint venture will relinquish the three licenses “as soon as practicable”, Deltic said in the news release.

However, Deltic will continue plans for the remaining two licenses, P2567 (Cadence) and P2428 (Cupertino), on its own.

Deltic said it recognizes the “significant prospectivity highlighted by the technical work programs completed by Capricorn” across the P2567 and P2428 on behalf of the joint venture, adding that it has been “fully carried’ by Capricorn through nearly $10 million of technical work to date.”

The work includes the pre-funding of nearly 270.3 square miles (700 square kilometers) of new 3D seismic, as well as the reprocessing of several legacy 3D seismic surveys. The joint venture identified and matured 17 leads and prospects with more than 2.6 trillion cubic feet of “combined, gross P50 gas-initially-in-place”, Deltic said.

 The current terms of licenses P2567 and P2428 are due to expire on November 30 and March 31 of next year respectively. Deltic said it intends to request an extension of the current license terms from the North Sea Transition Authority. Upon approval, the company plans to continue to advance the project while “seeking to attract another partner or partners to assist with future drilling activity across the two licenses”.

"While we would have preferred to continue in partnership with Capricorn on these exploration licenses, Capricorn has recently changed strategic direction”, Deltic Chief Executive Graham Swindells said. “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."

"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”, Swindells added.

In February, Deltic announced a “significant” gas and oil discovery at Pensacola on License P2252 in the Southern North Sea, where the company has a 30-percent working interest, with Shell holding 65 percent.

Earlier in July, Deltic revised its estimates in Pensacola to contain gross P50 initially in place volumes of gas and oil of 342 million barrels of oil equivalent (MMboe), which it said indicated that Pensacola could contain total gross P50 Estimated Ultimate Recovery of around 99 MMboe, “almost double” the volume of recoverable oil and gas originally estimated, according to a separate news release.

“The Pensacola oil and gas discovery is transformational for Deltic. Well data indicates that Pensacola contains close to double our original estimate, representing one of the most significant discoveries in the North Sea in many years", Swindells said in the release.

Deltic said that it targets to drill an appraisal well on Pensacola late 2024, subject to regulatory and joint venture approvals.

According to a posted statement made during Capricorn’s annual general meeting in June, company CEO Randy Neely said that Capricorn’s assets outside Egypt are in the process of being divested or relinquished in “as timely a manner as possible” as it focuses on its Egyptian assets “through influential collaboration with our partners on well selection, prioritization of liquids production growth and exploring options to enhance fiscal terms”.

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