(Alliance News) - Deltic Energy PLC on Tuesday reported a significant increase in the estimated volume of gas at the Selene prospect in the southern North Sea.
The natural resources investing company, which is focused on the southern and central North Sea, owns a 50% interest in licence P2437, where Selene is located, and is also its operator. The other 50% is owned by Royal Dutch Shell PLC.
Shares in Deltic were up 4.9% at 0.89 pence in London in morning trading. 'A' shares in Shell were up 4.7% at 1,229.00p and its 'B' shares were up 4.1% at 1,178.20p.
Deltic said: "This process has comprised a considerable amount of work in relation to the existing reprocessed 3D seismic and utilised an innovative technological approach to depth conversion which was undertaken by a joint Deltic-Shell team. Further work on the depositional environment, structural history, gas charge timing and reservoir quality prediction was also completed as part of this process.
The new low contingent resource estimate, or P90, for August is 286 billion cubic feet gross, up 12% from 255 billion in 2019. The best estimate, or P50, is 629 billion cubic feet, up 44% from 437 billion. The high estimate, or P10, is now 1.021 trillion cubic feet, up 49% from 683 billion.
Moreover, the geological chance of success has now risen sharply to 70% from 39%.
Additional work at Selene will focus on possible development scenarios, as well as the estimation of recovery factors and project economics needed to support the well investment decision before proposed 2022 drilling activity.
Chief Executive Graham Swindells said: "We are delighted at the ongoing collaboration with Shell on the Selene licence and that the detailed work being undertaken by the joint Deltic-Shell technical teams is supporting and enhancing the earlier work completed by Deltic. The significantly increased gas volumes and decreased risk profile further cements the importance of Selene as one of the largest undrilled Leman sandstone structures in this mature play.
"We are encouraged by the level of technical and human resources being deployed on this project by Shell and will continue to work with them towards securing a firm drilling commitment for the proposed 2022 well on Selene."
By Anna Farley; annafarley@alliancenews.com
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Deltic Energy (DELT)