Shell and partner Deltic Energy have confirmed plans to drill the “high-impact” Pensacola prospect in the UK southern North Sea.
Deltic, the new name for Cluff Natural Resources, said it expected the well to be drilled in May 2022.
The firm said the drilling should be carried out by a rig booked by Shell for a multi-well campaign, helping to keep costs down.
Shell took a 70% operated stake of the licence, P2252, in 2019 as part of a farm-in agreement.
The British-Dutch giant agreed to pay 100% of the costs of the work programme, up to the point of a well investment decision being made.
London-listed Deltic, whose shares were up 11.94% to 1.88p at 9am, said it remained fully funded for its 30% working interest in the well.
Deltic also claimed Pensacola was a “vital step in evaluating the highly prospective Zechstein reef play”, which in turn has the potential to “revitalise exploration in the southern North Sea”.
It estimates the prospect contains gross P50 resources of 309 billion cubic feet of gas.
This would rank it as one of the “highest impact exploration targets to be drilled in the gas basin in recent years”.
Deltic said new interpretation of 3D seismic data had also resulted in a much-improved view of the geological chance of success associated with the prospect, up from 20% to 55%.
Deltic chief executive Graham Swindells said: “Confirmation of this well investment decision represents the achievement of another key milestone as we continue to execute our exploration-led strategy in the southern North Sea with our world class partner, Shell.
“The rigorous re-evaluation of the Pensacola prospect has validated and reinforced the fantastic work of our technical team and their initial view that the Pensacola prospect, and the Zechstein play as a whole, represented a significant missed opportunity in the Southern North Sea.
“Well planning is already underway, and we look forward to providing regular updates as we progress through the planning phase towards the commencement of operations, in addition to continuing to mature our other prospects, including Selene, towards drilling.”