Cluff Natural Resources has announced an operational and corporate update in relation to its portfolio of UK exploration licences.

Highlights

• Shell and Cluff are fully committed to drilling Pensacola and Selene prospects, with drilling anticipated to commence in H2 2021:
  • Pensacola is estimated to contain P50 prospective resources of 309 BCF of gas, with nearby infrastructure
  • Selene is estimated to contain P50 prospective resources of 291 BCF of gas in close proximity to infrastructure
• The exploration and development team continues to work on existing projects, which have already attracted encouraging early interest from industry peers:
  • The Company is seeking to begin the farm-out process on a further two of its licences in the second half of 2020
• The Company has applied for multiple licences in the UK 32nd offshore licensing round, with results expected this summer:
  • All of the applications have been made solely by Cluff, apart from one which has been made jointly with an established international operator
• The Company remains in a strong financial position with cash of £13.2m as at 31 March 2020, resulting in the Company being fully funded for its planned drilling operations
• The Company has reviewed all aspects of its business and enacted a number of cost saving initiatives that will result in significant cost reductions, to retain the Company's strong financial position
• The Company will review opportunities, including the potential to acquire cash generative production, as the industry adjusts to the lower commodity price environment and operators review their strategy and portfolios
• Subject to shareholder approval, the Company has proposed to change its name to Deltic Energy Plc, to reflect the transition into a more operationally focused phase

Commenting, CEO Graham Swindells, said:
"Despite the major impact of Covid-19 on our industry, we have continued to progress our core gas projects. We are delighted that Shell remains committed to drilling both the Pensacola and Selene wells and we remain fully funded for our share of both wells. We are equally encouraged by the level of early interest in our other assets, in particular the Cupertino licence in the Southern North Sea and we also look forward to the results of the 32nd Licensing Round in the summer. In the meantime, we believe that current market conditions will further reduce operating costs and may present value accretive opportunities which, with a strong balance sheet and no debt, we look forward to pursuing."

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