Licence P2428 - Commencement of 3D Seismic Survey
The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
10 September 2021
Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural Resources
Deltic Energy Plc ("Deltic" or 'the Company')
Licence P2428 - Commencement of 3D Seismic Survey Following Farm Out
Deltic Energy Plc, the AIM quoted natural resources investing company with a high impact, natural gas focussed exploration and appraisal portfolio in the Southern North Sea, is pleased to announce, following the recent Farm Out with Cairn Energy PLC ("Cairn") in relation to five of Deltic's gas licences in the Southern North Sea (the "Farm Out"), the acquisition of 3D seismic data over Licence P2428 and surrounding areas has commenced.
The Company has been informed by ION Geophysical ("ION") that the seismic vessel, under contract to ION, has mobilised to site with survey commencement expected on 11 September 2021. The acquisition of approximately 700km2 of 3D seismic data, which is focussed on the Plymouth Zechstein Reef Prospect, will take approximately six to seven weeks to complete with processed data due to be delivered mid-2022.
Under the terms of the Farm Out agreement, Cairn are responsible for 100% of the costs of the associated work programme (including seismic acquisition and processing) up to the point at which a well investment decision is made.
Completion of the Farm Out is conditional on the entering into of a Joint Operating Agreement and obtaining standard regulatory consents from the UK Oil & Gas Authority. Following completion of the farm out, Deltic will hold a 40% non-operated interest in Licence P2428.
Graham Swindells, Chief Executive of Deltic Energy, commented:
"To be acquiring new 3D seismic so quickly after announcing our transformational Farm Out with Cairn is another very positive development which will accelerate the development of our technical understanding of the opportunities on this licence. The survey represents another important milestone for Deltic and we are delighted to be participating in our first field operations with our new partner. The acquisition of high quality modern 3D seismic over the licence area is a key step in de-risking future exploration drilling on this licence ."
**ENDS**
For further information please contact the following:
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Deltic Energy Plc |
Tel: +44 (0) 20 7887 2630 |
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Graham Swindells / Andrew Nunn / Sarah McLeod |
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Allenby Capital Limited (Nominated Adviser & Joint Broker) |
Tel: +44 (0) 20 3328 5656 |
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David Hart / Alex Brearley (Corporate Finance) |
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Kelly Gardiner (Sales and Corporate Broking) |
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Stifel Nicolaus Europe Limited (Joint Broker) |
Tel: +44 (0) 20 7710 7600 |
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Callum Stewart / Simon Mensley / Ashton Clanfield |
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Vigo Consulting (IR &PR Adviser) |
Tel: +44 (0) 20 7390 0230 |
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Patrick d'Ancona / Chris McMahon / Oliver Clark |
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Notes to Editors
Deltic has created a strategically located portfolio of high-quality gas exploration licences in the Southern North Sea over a number of licensing rounds. These licences are located in areas that have been underexplored despite significant discoveries such as Tolmount, Breagh, Pegasus and Cygnus, most of which have gone on to be developed and could provide ready access to export infrastructure for any future developments on Deltic's licence acreage.
P2428 (Cupertino Area) and P2567 (Cadence Area)
· The P2428 licence area was awarded in the 30th Offshore Licensing Round and contains prospects and leads at multiple geological levels. The key prospect identified by Deltic is the Plymouth Prospect, a large Zechstein carbonate build-up, which is analogous to Deltic's Pensacola Prospect and the Crosgan discovery. Other leads have been identified in the Leman Sandstone and the Carboniferous sections. The area is currently imaged on legacy 2D seismic data dating back to the early 1990s and new 3D seismic will be acquired to support a well investment decision on this licence.
· The P2567 licence was award in the 32nd Offshore Licensing Round and contains prospects in the Triassic Bunter Sandstone and the Carboniferous. The Carboniferous is the primary focus and Deltic has identified the large intra-Carboniferous Cadence prospect and believes the Base Permian Unconformity (BPU) subcrop play is also prospective across the licence area.
· Under the terms of the Farm Out Agreement, Cairn will acquire a 60 per cent. interest in each of Licences P2428 and P2567, and will be appointed as the licence Operator, in return for paying 100 per cent. of the costs of an agreed forward work programme up to the date on which a well investment decision is made.
· It is expected that the work programme over these two licence areas will involve the acquisition and processing of new 3D seismic data across P2428 and P2567 and the associated interpretation and studies required to support a well investment decision.
· Should a well investment decision be made on either of the two licences Cairn will fund 70% of the costs of the first exploration well drilled, subject to a gross well cost cap of USD$25 million.
· Following completion of the Farm-out, Deltic will retain a 40 per cent. non-operated interest in Licence P2428 and P2567.
P2560, P2561 & P2562 (South Breagh Area)
· The P2560, P2561 and P2562 licence areas were awarded in the 32nd Offshore Licensing Round and are located between two significant gas fields in Breagh and Tolmount, located to the north and south respectively. Exploration in the area has been constrained historically by lack of high-quality 3D data and Deltic believes there is significant potential in the Zechstein, Leman and Carboniferous sections across the acreage. Having only been recently awarded, these assets are less mature in terms of Deltic's geological understanding compared to the Cupertino and Cadence areas.
· Under the terms of the Farm Out Agreement, Cairn will acquire a 70 per cent. interest in each of Licences P2560, P2561 and P2562, and will be appointed as the licence Operator, in return for paying 100 per cent. of the costs of an agreed forward work programme on each licence, up to the date on which a well investment decision is made on each licence.
· The work programme over these licences is expected to involve the purchase and reprocessing of legacy datasets to improve image quality and/or the acquisition of new 3D seismic data across all or part of the licenced areas. This will be supported by the various interpretation workflows and other studies required to make the various well investment decisions on each licence.
· All costs incurred post a well investment decision will be satisfied by each party in proportion to their working interest.
· Following completion of the Farm-out, Deltic will retain a 30 per cent. non-operated interest in Licences P2560, P2561 and P2562.
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