Offshore staff
LONDON — Deltic Energy has agreed to farm out a 25% interest in license P2437 in the UK North Sea to Korea National Oil Corp.’s subsidiary Dana Petroleum (E&P).
Assuming approval for the transaction from operator Shell and the North Sea Transition Authority, Deltic would retain 25% of the Selene prospect, which the partners plan to drill later this summer.
Selene, in the Leman Sandstone fairway of the southern gas basin, holds potential resources of 318 Bcf, according to Deltic, with a geological chance of success of 70% for the well.
In the southern North Sea, Dana is a partner in the producing Tolmount and Tolmount East gas fields, and in late 2023 the company operated a successful exploration well on the Earn prospect.
In exchange for the 25% equity in P2437, Dana would pay Deltic $500,000 to cover back costs related to work to date, and Dana would also carry Deltic for its residual cost exposure to the Selene well (after take-up of the existing carry from the Shell farm-out), up to $6 million in the event of a discovery.
Shell estimates the cost of drilling in a success case at $49 million.
Dana would also pay its 25% share of costs from Jan. 1; any gross well costs above $4 million (dry hole) or $49 million (success case) and other non-well related expenses after Jan. 1 would be split according to the partners’ respective equities.
Preparations continue for the well, with a rig contract for the Valaris 123 jackup confirmed earlier this week.
02.07.2024
