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Deltic reports latest findings from Pensacola Discovery

(Sharecast News) - Natural resources investor Deltic Energy reported on the findings of a competent person's report (CPR) for the Pensacola Discovery on Friday. The AIM-traded firm said the discovery is on licence P2252 in the Southern North Sea, in which it holds a 30% stake.

In the wake of a thorough post-well analysis of data obtained from the 41/05a-2 discovery well, Deltic engaged RPS Energy to conduct an independent technical and commercial evaluation of the Pensacola discovery.

The assessment was a significant step forward, as it shed light on the potential of the Pensacola discovery under two distinct development scenarios - a combined gas and oil development, and a gas-only development.

Deltic said RPS estimated that the Pensacola structure held gross P50 hydrocarbons Initially in place of 326 million barrels of oil equivalent, closely aligned with Deltic's previous estimate of 342 million equivalent barrels.

In the combined case, RPS calculated 2C contingent resources, net to Deltic, of 21.8 million barrels of oil equivalent, and 15 million barrels in the gas-only case.

Based on the two evaluated development scenarios, RPS projected a 2C post-tax 10% discounted net present value (NPV10) of $205m net to Deltic in the combined case, and $199m net to Deltic in the gas-only case.

The NPV10 valuations corresponded to between 169p and 174p per Deltic share.

Additionally, the company said appraisal well data from the analogous Crosgan Zechstein discovery had been released, reinforcing the potential for thicker, higher-quality reservoirs at the Pensacola crest.

Progress was ongoing on both the Pensacola and Selene farm-out processes, with a substantial level of interest from industry players being reported by Deltic.

"RPS's validation of our technical assessment of the Pensacola discovery is another step forward for Deltic as we progress towards drilling the appraisal well in late 2024," said chief executive officer Graham Swindells.

"In particular, we are pleased with the potential valuation that RPS ascribes to the discovery net to Deltic, particularly within the context of our current share price.

"It's clear that Pensacola is a regionally significant hydrocarbon accumulation and we will continue to work with our partners at Shell and ONE-Dyas to mature the opportunity and optimise the potential development scenarios as we go forward."

At 1214 GMT, shares in Deltic Energy were up 8.79% at 24.75p.

Reporting by Josh White for Sharecast.com.

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