Shell has announced its intent to withdraw from a pair of North Sea discoveries – dealing a blow to partner Egdon Resources.
The oil giant has informed Egdon and the North Sea Transition Authority (NSTA) of its intention to bow out of licences P1929 and P2304, containing the Resolution and Endeavour gas discoveries.
Shell farmed in to Resolution and Endeavour in 2020, taking 70% stakes and operatorship of both.
The deals saw Shell agree to stump up 85% of the cost of gathering and processing 3D seismic data on the two targets, capped at £3.8m, beyond that paying 30% of costs.
It also agreed to pay 100% of all studies and manpower costs prior to a well investment decision being made on the acreage.
Resolution and Endeavour, which lie off the Yorkshire coast in the Southern North Sea, are thought to hold contingent resources of 231 billion cubic feet of gas and 18 bcf respectively.
A Shell spokesperson said: “This decision is part of routine portfolio management. Shell remains fully committed to oil and gas production in the UK North Sea”
Egdon said it will now consider its options, “including its ongoing commitment to the licences and will discuss this with the NSTA”.
It added: “We will update shareholders once our preferred option and the NSTA position is known.”
The news comes just a day after Deltic Energy revealed that it and Shell will press ahead with drilling the Pensacola exploration target in the Southern North Sea in the third quarter of this year.
Last year, Egdon said it was “encouraged” by Shell’s activities with Deltic, particularly Pensacola which sits nearby to Resolution and Endeavour and “will test the same play”.