An analyst firm has put Deltic Energy’s stake in the Shell-operated Pensacola discovery in the North Sea at $200m.
Deltic (AIM: DELT), which worked up the Southern North Sea find, owns 30%, partnered with operator Shell (65%) and ONE-Dyas (5%).
Research from RPS Energy, commissioned by Deltic, said the firm’s share was (NPV10) $205m based on a combined oil and gas find, and $199m in a gas-only case.
An appraisal well is planned for later this year.
In July, Deltic estimated Pensacola to hold 342 million barrels of oil equivalent on a 2C basis, with 21.8m in combined case net to Deltic, and 15m in the gas-only scenario.
The RPS report has slightly lowered that figure to 326m.
Two development options
The RPS report outlines two development scenarios building on that.
The first is a combined oil and gas development requiring two separate production platforms with six wells (three gas and three oil producers) with the product exported to Teesside.
In a lower-CAPEX gas-only development, there would be three wells producing via a normally unmanned installation through a new pipeline to Teesside.
Deltic said the gas only scenario assumes significantly lower capital expenditure than that required to support the combined oil and gas development.
Appraisal and farm out
Shell and its partners are on track to drill an appraisal well at Pensacola later this year.
Meanwhile Deltic continues its hunt for another partner to farm-down its stake, and its 50% stake in another Shell project – Selene.
The firm said it is “continuing to engage with a number of different counterparties” on a deal.
Deltic: Pensacola is ‘significant hydrocarbon accumulation’
CEO Graham Swindells said: “RPS’s validation of our technical assessment of the Pensacola discovery is another step forward for Deltic as we progress towards drilling the appraisal well in late 2024.
“In particular, we are pleased with the potential valuation that RPS ascribe to the discovery net to Deltic, particularly within the context of our current share price. It’s clear that Pensacola is a regionally significant hydrocarbon accumulation and we will continue to work with our partners at Shell and ONE-Dyas to mature the opportunity and optimise the potential development scenarios as we go forward.”
Shares were broadly flat during early trading on the announcement.