Shell has confirmed a drilling contract for the Valaris 123 jackup rig for the Selene exploration well and Pensacola appraisal well.
Deltic Energy, which is partnered with operator Shell on the P2436 and P2252 licences in the Southern North Sea, said drilling will be completed as a two-well sequence with the contract and mobilisation commencing in June and July this year.
Deltic (AIM: DELT), which worked up the Southern North Sea find, owns 30%, partnered with operator Shell (65%) and ONE-Dyas (5%).
Deltic said confirmation of the rig contract is a “significant step forward” for the company and a “key milestone” in the preparatory work for Selena and Pensacola.
The company also said it has received permitting approval for the geophysical site survey on Pensacola, with the work now expected to take one month.
Meanwhile, Shell and Deltic commenced site surveys at Selene towards the end of last year.
Selene is targeting P50 (best estimate) prospective resources of 318 billion cubic feet of gas, with a geological chance of success of 70%.
Under their 2019 farm-in arrangement, Shell is covering 75% of the costs of drilling and testing the well up to $25m.
Deltic describes the prospect as “one of the largest undrilled structures in the world class Permian Leman Sandstone Fairway”.
Deltic Energy chief executive officer Graham Swindells said: “”Signing of the rig contract coupled with the firming up of the drilling schedule is another important step for Deltic as we move further down the runway towards the drilling of Selene and Pensacola.
“Confirmation that the JV has secured a high quality rig, with Selene and Pensacola being drilled back to back, represents another key milestone as we get closer to drilling in what is shaping up to be a very active and exciting year for Deltic.”
Deltic Pensacola stake valued at $200m
Earlier this year, analyst firm RPS Energy put Deltic Energy’s stake in the Shell-operated Pensacola discovery in the North Sea at $200m.
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.
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.