Shell-operated joint venture, consisting of Deltic Energy and Dana Petroleum, has confirmed gas discovery in the Selene prospect in the North Sea.
The Shell operated 48/8b-3Z well, in license P2437, proved a 160-meter-thick section of Leman Sandstone. Subsequent wireline logging and fluid sampling have confirmed the presence of a live gas column above a gas-water contact at 3,370 meters which is in the middle of the B-Sand, the key producing interval within the overall Leman Sandstone section.
Updated post-well structural maps of the Selene prospect point towards a maximum gas column of 100 meters, with initial indications point towards a high-quality dry gas, according to Deltic Energy.
The well has been drilled with Valaris 123 jack-up rig, which is expected to be demobilized towards the end of next week.
Based on the preliminary information available from the wellsite, Deltic has updated the volumetric model of the Selene discovery and now estimates Selene to contain gross P50 estimated ultimate recoverable resources of 131 billion cubic feet of gas, which is at the lower end of pre-drill estimates.
However, Deltic Energy said the bulk of the recoverable resources are concentrated in the higher quality B-Sand up-dip from the 48/8b-3Z well location which should support a simpler and cheaper development option with greater gas production per well than was forecasted pre-discovery.
Following demobilization of the rig which is expected towards the end of next week, there will be a period of detailed analysis of wireline data, core samples, fluid samples and pressure testing data which will further refine the geological model, volumetric estimates and the proposed development plan.
Based on the results of the well and the data collected, Deltic Energy believes that the joint venture should be well placed to progress towards field development planning and a final investment decision on a future development without requiring a further appraisal well.
In addition to Selene, Deltic Energy will re-evaluate the Endymion prospect, located on the north-eastern corner of the block, which is another low-risk Leman Sandstone opportunity that could be tied into any future Selene development.
As the joint venture updates the development plan, Deltic Energy will re-assess its economic models, however pre-drill modelling indicates that volumes over 100 BCF recoverable will remain economically viable, and ultimately produce material positive cash flows for the Deltic Energy, under the fiscal regime announced in the budget on 30 October 2024.
“Subsurface expertise lies at the heart of the Deltic equity story and remains central to the strategic approach we recently laid out for the company. In this context, the outcome of the Selene well is a good result overall and extends Deltic’s exploration success record to two from two.
“Although we are predicting recoverable volumes at the lower end of pre-drill estimates, the improved quality of the B-Sand and increased resource concentration should support a simpler development with enhanced economics due to reduced CAPEX and OPEX requirements.
“We are looking forward to engaging with Shell and Dana as we work through the customary post-well analysis and preparation of a plan which will move the Selene discovery towards development over the coming year. We continue to believe that the asset can create material value for our shareholders,” said Andrew Nunn, CEO of Deltic Energy.
Shell is the operator of Selene prospect with 50% in the license, while Deltic Energy and Dana Petroleum hold 25% stake each.