Deltic Energy, the AIM quoted natural resources investing company with a high impact exploration and appraisal portfolio focused on the Southern and Central North Sea, has announced its interim results for the six months ended 30 June 2020.

Highlights

• The Company has retained a strong balance sheet with cash of £12.8m as at 30 June 2020 (30 June 2019: £0.6m)
  • Fully funded for operations (including Deltic's share of the Pensacola and Selene wells)
  • Further reduced G&A costs by c.25% to preserve cash while still progressing the Company's core assets. The Company is now fully funded until at least mid-2022
• On Licence P2252, which contains the Pensacola prospect (as well as the Lytham and Fairhaven prospects) , intensive work has been carried out on processing  the new 3D seismic shot by Shell
  • Broadband 3D seismic processing has delivered a robust image over the Pensacola prospect
  • On track and committed to meeting the licence terms which include the Contingent Well Commitment becoming firm by 1 December 2020
• On Licence P2437, following work by a joint Deltic-Shell team, Deltic reported a significant upgrade to the prospectivity associated with the Selene prospect (held on a 50/50 basis with Shell)
  • Estimates of P50 Gas Initially in Place ('GIIP') have been increased by 44% from 437 to 629 BCF
  • Estimated Geological Chance of Success ('GCoS') almost doubled from 39% to 70%
• On Licence P2428, which contains the Cupertino prospect, the technical team continues to mature a number of prospects identified from legacy 2D data which was reprocessed by the Company in the second half of 2019
  • Deltic believes the licence has TCF scale potential and the team has identified significant opportunities in Zechstein, Leman Sandstone and the deeper Carboniferous section
  • Certain industry parties have requested an early review of the work that the Company has completed to date and Deltic expects to be in a position to commence a formal farm-out process in relation to this licence towards the end of 2020
• On Licence P2424, which contains the Cortez prospects, reprocessing of legacy 2D seismic data commenced in April with results expected in September 2020
  • Initial estimates of prospectivity suggest that the Cortez and Cortez South prospects alone have the potential to contain P50 Prospective Resources of over 400 BCF of gas
• At the end of 2019, the Company submitted several applications for new licences in the UK's 32nd Offshore Licensing Round. Interviews took place in March 2020 and OGA guidance indicates licence awards should be announced shortly

Graham Swindells, CEO, commented:
"In what has been a difficult time for the E&P sector as a whole, I am happy to report that we remain fully funded and have a well-defined drilling plan on two high impact gas prospects in the Southern North Sea which are being invested in by one of the world's largest oil and gas companies in the form of Shell. Furthermore, we have a number of other attractive and increasingly technically developed prospects in our portfolio which we will continue to progress to drill readiness, providing multiple opportunities to deliver value to shareholders through our focused and technically driven approach to North Sea exploration. In addition, we continue to seek to grow the portfolio as we await the outcome of the UK's latest offshore licensing round."

New Licences

At the end of 2019, Deltic submitted several applications for new licences in the UK’s 32nd Offshore Licensing Round. Interviews took place in March 2020 and OGA guidance indicates that licence awards should be announced shortly. Applications have been made in the Company’s core area of the Southern North Sea as well as the Central North Sea and contain existing discoveries, high quality prospects which can be rapidly matured and greenfield exploration opportunities all of which have the potential to substantially diversify the Company’s portfolio, increase its resource base and may provide multiple new drilling opportunities over the coming years. All of the applications have been made on a 100% basis with the exception of one application which has been made jointly with an established international operator.

KeyFacts Energy: Deltic Energy UK country profile