ROYAL Dutch Shell has underlined its belief in the potential of a North Sea prospect that was brought to its attention by a relative minnow.
North Sea-focused Deltic Energy announced yesterday that Shell has appointed contractors to complete site survey work on the Pensacola prospect in preparation for the firms drilling a well on it.
Deltic chief executive Graham Swindells said the commissioning of the site survey represented an important milestone as the firms prepared to drill what he described as a high impact exploration well on Pensacola. This is scheduled for May next year.
The commitment to drill the well bucks the gloomy trend in the North Sea, in which exploration activity has fallen to record lows.
READ MORE: Shell underlines value of North Sea business after cutting Aberdeen jobs
The fallout from the coronavirus crisis has prompted firms to slash discretionary spending to help them save cash.
Deltic shifted its focus to exploration in the North Sea amid the last downturn in the industry in the belief the area contained exciting prospects that bigger fish has overlooked.
The company sold a stake in the licence containing the Pensacola prospect to Shell in February 2019.
Deltic was formerly known as Cluff Natural Resources. The company was founded by Algy Cluff, who played a part in the discovery of the huge Buchan field in the North Sea in 1975 then went into mining in Africa.
Mr Swindells succeeded Mr Cluff as chief executive in 2018.
READ MORE: North Sea firm eyes acquisitions as slump creates opportunities
Deltic said in March that drilling of the well on Pensacola had the potential to be transformational for the company and was a vital step in evaluating the Zechstein reef play, which in turn had the potential to revitalise exploration in the Southern North Sea. The Southern North Sea acreage that Shell bought into also contains the Selene prospect.
Last year Deltic spurned takeover approaches from Reabold Resources and IOG (Independent Oil and Gas), which directors said undervalued the business.
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