Oil and gas company Deltic Energy Plc on Wednesday announced a significant increase in the estimated oil and gas resources for Shell's Pensacola discovery in the UK North Sea, with the analysis revealing nearly double the initial expectations.
Deltic Energy holds a 30% working interest (WI) in the license, which is operated by Shell. Shell hit gas at the Pensacola prospect in January 2023, using the Noble Resilient jack-up drilling rig.
In a statement on Wednesday, Deltic said that, following post-well analysis, Deltic now estimates the Pensacola structure to contain gross P50 initially in place volumes of gas and oil of 342 million barrels of oil equivalent.
This analysis indicates Pensacola may contain almost double the volume of recoverable gas and oil than originally thought, with Deltic now estimating total gross P50 Estimated Ultimate Recovery ('EUR') of around 99 million boe, up from 50 million boe immediately after well completion.
Deltic in February said that Pensacola could be "one of the largest natural gas discoveries in the Southern North Sea in over a decade."
Graham Swindells, Chief Executive of Deltic Energy said:"The Pensacola oil and gas discovery is transformational for Deltic. Well data indicates that Pensacola contains close to double our original estimate, representing one of the most significant discoveries in the North Sea in many years."
"This is an outstanding result for Deltic. Our success to date reinforces the quality of our technical team and the Deltic model of taking licences from award through to successful drilling."
"We look forward to working with our JV partners to continue moving this exciting asset through the appraisal phase and onward towards development. With the significant additions to our resource base, we will also continue to pursue monetization options in line with our stated strategy."
Deltic said that while the expected presence of oil in the south of the prospect represents highly material upside, the discovered gas volumes in the northern part of the Pensacola prospect are better constrained and therefore the gas is still likely to be the initial focus of near-term appraisal and development activity.
While the expected presence of oil in the south of the prospect represents highly material upside, the discovered gas volumes in the northern part of the Pensacola prospect are better constrained and therefore the gas is still likely to be the initial focus of near-term appraisal and development activity, Deltic Energy said.
"Deltic continues to work closely with [Shell] and our JV partners to develop the appraisal program for the Pensacola discovery. Subject to JV and other regulatory approvals, the drilling of an appraisal well on Pensacola is continued to be targeted for late 2024. In parallel, the JV will undertake various studies to define optimal development plans for the Pensacola discovery.
"In line with the Company's stated strategy, Deltic has also commenced a formal process to pursue the value crystallization options that exist for the Pensacola discovery, which may involve monetization and/or farm down of its equity interest in the Pensacola discovery," Deltic said.