Tuesday 26 July 2022

Deltic Energy Plc is pleased to confirm that it and Shell U.K. Limited ("Shell"), its Joint Venture Partner on Licence P2437 (the "Licence"), have made a positive well investment decision to drill the high impact Selene Gas Prospect on Licence P2347 situated in the UK Southern North Sea off the North East coast of England.

The UK industry's regulator (North Sea Transition Authority) has been informed of the well investment decision which will facilitate the Licence entering its next phase. While the timing of a well slot has yet to be confirmed and will be subject to drilling schedules, this is expected to be firmed up as the Joint Venture progresses its well planning.

Under the terms of the original farm-out with Shell, Deltic holds a 50% working interest in the Licence but will be carried for 75% of the costs of drilling and testing the well on the Selene prospect, up to $25 million and, as a result of the well investment decision, Shell will be appointed Operator of the Licence.

The Selene Prospect is one of the largest unappraised structures in the Leman Sandstone fairway of the Southern Gas Basin and Deltic estimates Selene to contain gross P50 Prospective Resources of 318 BCF of gas (with a P90 to P10 range of 132 to 581 BCF) with a geological chance of success of 70%.

With technical and commercial evaluation complete, the Deltic team looks forward to progressing into this next phase as the Joint Venture now moves on to detailed well design, planning, rig procurement and other key preparations to support drilling operations.

Graham Swindells, Chief Executive of Deltic Energy, commented:

"This is a very exciting time for Deltic as we move into the next phase of our strategy, building on the strong platform created by farm outs to both Shell and Capricorn. The commitment to drill this material, high impact, low risk gas prospect is another highly significant milestone for Deltic and our team. Adding another committed well to our programme, following recent confirmation that Pensacola will be drilled in September, represents further endorsement of the quality of Deltic's assets as well as demonstrating the success of our strategy to create a conveyor belt of exploration opportunities moving from licensing to drilling with world-class partners in place."