RERATE SOON18 Jan 2021 21:18
Deltic Energy (AIM:DELT) is a good example of a smaller company that has secured a promising arrangement with a major. Deltic, formerly known as Cluff Natural Resources, has interests in five licences in the Southern Gas Basin and two oil prospects in the Central North Sea.
Last year the company partnered with Shell to explore the Gas Basin’s Pensacola and Selene fields. Shell will fund a 3D seismic survey to decide on optimal drilling locations at Pensacola, which has gross P50 resources of 309 BCF, and will meet 75pc of the costs of the first exploration well at Selene, which has P50 resources of 629 BCF. Deltic has 30pc and 50pc working interests in the projects, which will be the the first significant exploration drilling that Shell has done in the Southern North Sea for some years. The company’s other interests include the Cupertino gas field (800 BCF P50 resources) and the Dewar oil field (39.5 MMbbls P50 resources).
Deltic, which recently declined takeover approaches from Reabold Resources and Independent Oil and Gas, has a market cap of £22.1m, its shares having doubled in price to 1.6p since November. The company raised £15m in 2019 to fund its current exploration commitments.