P2252 – Pensacola

The Pensacola field is one of the most significant discoveries in the Southern Gas Basin for many years. Following Shell’s farm-in in 2019, the 2023 discovery well was drilled by Shell and flowed both oil and gas to surface. The partnership is currently targeting appraisal drilling in late 2024 to support the maturation of the field development plan.

RPS undertook an independent Competent Person’s Report (CPR) for Deltic Energy in January 2024 and estimates that the Zechstein carbonate reservoir contains gross P50 in-place oil and gas resources of 326mmboe. The summary CPR can be downloaded from here.

Block Details
Licence No: P2252
Blocks: 41/5a, 41/10a, 42/1a
Area: 214.4km2
Equity position: 30%
Operator: Shell U.K. Limited

Pensacola Reef Discovery

The Pensacola discovery is a Hauptdolomite Fm, Zechstein aged reef. The reef is 15km long by 6km wide and builds to more than 200m above its surroundings. It is clearly defined on the proprietary Bluewater 3D seismic survey that was shot by the partnership in 2019.

The Zechstein reef play has been overlooked in the UKCS but recently there has been significant exploration success in this emerging play, with similar nearby structures at Darach and Crosgan both successfully flowing hydrocarbons to surface on test.

Drilled in December 2022 by the 41/05a- 2 well, gas and oil were flowed in a well test in January 2023. This success has led to a positive drilling decision for a further appraisal well in late 2024.

Deltic has commenced a formal process to pursue the value crystallisation options that exist for the Pensacola discovery which may involve monetisation and/or farm down of its equity interest in the Pensacola discovery.

Pensacola 2024 CPR Development Cases

Prior to the drilling of the planned appraisal well, a number of uncertainties in relation to the potential development of the oil volumes discovered at Pensacola remain and therefore Deltic provided RPS with two possible development scenarios as summarised below:

  • A combined oil and gas development requiring two separate production platforms and six horizontal wells (three gas and three oil producers) with hydrocarbons exported to Teesside via a new pipeline.
  • A lower capex gas only development scenario comprising three horizontal development wells producing via a normally unmanned installation exporting gas through a new pipeline to Teesside.

Capital and operational costs for both scenarios were estimated for Deltic by S&P Global and reviewed by RPS as part of the CPR process.  The gas only scenario assumes significantly lower capital expenditure than that of the combined oil and gas development.

Combined Oil and Gas Case

 

Licence Ref DELT Equity PRMS Status Hydrocarbon Type Units
Full Field Gross Resources
  1C 2C 3C
P2252 30% Contingent Resources Gas Bscf 113.6 313.0 616.7
Oil MMstb 4.7 19.8 50.9
Condensate MMstb 0.2 0.6 1.4
Combined Total MMboe 23.9 72.6 155.1

 

Combined Oil and Gas Case ELT Date Post-Tax NPV – Net to Deltic (USD$ Million)
Discount Rate 0% 10% 12% 15%
1C 2036 (29) (114) (121) (127)
2C 2048 792 205 148 84
3C 2058 2,236 566 437 296

 

Gas Only Case

 

Licence Ref DELT Equity PRMS Status Hydrocarbon Type Units
Full Field Gross Resources
  1C 2C 3C
P2252 30% Contingent Resources Gas Bscf 112.4 296.8 631.7
Condensate MMstb 0.2 0.6 1.5
Combined Total MMboe 18.9 50.0 106.7

 

Gas Only ELT Date Post-Tax NPV – Net to Deltic (USD$ Million)
Discount Rate 0% 10% 12% 15%
1C 2034 124 20 8 (6)
2C 2044 599 199 158 111
3C 2058 1,664 412 323 226