LONDON, UK: Deltic Energy Plc, a natural resources investing company, has agreed to farm out a quarter of its interest in Licence P2437, containing the Selene Prospect, to Dana Petroleum. The deal will reduce Deltic’s exposure to the drilling and testing costs of the Selene well, which is expected to be drilled in Q3 2024.
Deltic will receive $500K in cash from Dana and a carry of up to $11M for its remaining 25% share of the well costs. The carry will cover Deltic’s costs up to $40M in a dry hole scenario or $49M in a success case scenario. The current estimate of the success case cost of the Selene well is $47M.
The farm-out is subject to the approval of Shell, the licence operator, and the North Sea Transition Authority. Shell already has a carry agreement with Deltic for the Selene well, which is part of Deltic’s high impact exploration and appraisal portfolio in the Southern North Sea.
The Selene well is on track to be drilled in Q3 2024, as the preparatory works are progressing on time and according to plan. The rig contract for the Valaris 123 has been announced on 5 February.
Graham Swindells, Chief Executive of Deltic Energy, commented: “We are delighted to have strengthened the P2437 JV with the addition of an established operator like Dana who have a long history of successful exploration and development in the Southern North Sea. As a result of the transaction Deltic retains a material stake in one of the highest impact UK exploration wells planned in 2024 while effectively eliminating our estimated cost exposure to the exploration well, which remains scheduled to commence in Q3 2024. I look forward to updating the market as we progress through a very exciting year for Deltic, including our active and ongoing process to realise value and farm down our Pensacola discovery.”
Waldorf Energy to acquire Dana and TAQA oil and gas businesses