North Sea-focused investing firm Deltic Vitality Plc has been granted a brief interval of further time by Shell UK Ltd to finish the farm-out course of for License P2252 and the Pensacola discovery.
Deltic has till June 12 to advance discussions with potential counterparties concerning a doable transaction. “There’s nevertheless no assure that discussions can be concluded efficiently inside that timeframe and, in such circumstances, Deltic can be required to withdraw from the Pensacola license and switch its curiosity in Pensacola to its Joint Enterprise companions,” the corporate mentioned in an announcement on the London Inventory Alternate.
Deltic holds a 30 % curiosity within the Pensacola discovery. The London-based firm mentioned it had a tough time securing a farm-out accomplice, in accordance with an earlier assertion. Deltic wants to satisfy its 30 % share of the Pensacola nicely, estimated at $19.14 million (GBP 15 million) web to the corporate.
Shell UK is the operator of License P2252 with a 65 % stake.
“[T]he continuous tinkering with the Vitality Earnings Levy and resultant fiscal uncertainty created by the present authorities, together with latest rhetoric emanating from the Labour Get together, have had a severely destructive impact on the power of UK Exploration and Manufacturing (E&P) corporations to decide to long run investments within the North Sea,” Deltic mentioned within the assertion.
“This has resulted in lots of operators diverting capital away from the UKCS [United Kingdom Continental Shelf] or delaying funding choices, particularly with respect to new large-scale alternatives like Pensacola,” it added.
“We stay of the view that Pensacola represents a wonderful value-driven alternative for the correct accomplice and can be keen to have interaction with any further potential companions,” the corporate remarked.
Graham Swindells, Chief Government of Deltic Vitality, mentioned, “The battle to discover a manner ahead on a challenge like Pensacola, which is without doubt one of the largest discoveries within the North Sea in latest many years, is a real-world consequence of our political management utilizing the nationally essential oil and fuel trade as a political soccer at a time when vitality safety is of paramount significance”.
“Given the impression of fiscal and political uncertainty on funding choices we have now seen a shift away from funding in bigger standalone initiatives, like Pensacola, in the direction of extra inexpensive, decrease threat alternatives which defer decommissioning or improve infrastructure life equivalent to Selene, and the Firm’s Syros prospect within the Central North Sea, the place we have now seen an enhanced degree of curiosity,” Swindells continued.
We stay up for the beginning of drilling operations on the excessive impression Selene exploration nicely, during which Deltic is totally carried for the estimated price of the success case nicely, which stays on account of spud in July 2024. Within the meantime, we are going to proceed to pursue all avenues to progress Pensacola and can replace the market sooner or later,” he concluded.
In February 2023, Deltic introduced a “important” fuel and oil discovery at Pensacola on License P2252 within the Southern North Sea. In July 2023, Deltic revised its estimates in Pensacola to comprise gross P50 initially in place volumes of fuel and oil of 342 million barrels of oil equal (MMboe), which it mentioned indicated that Pensacola might comprise complete gross P50 Estimated Final Restoration of round 99 million barrels of oil equal, “virtually double” the amount of recoverable oil and fuel initially estimated, in accordance with a separate information launch.
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