A North Sea firm that made a bumper find may surrender the licence concerned unless it secures a last-ditch funding deal.
Deltic Energy underlined the exploration potential of the North Sea when it made the Pensacola find in February last year on a licence it persuaded Shell to buy into.
The firms plan to drill an appraisal well to help them firm up estimates of the amount of gas it holds.
However, Deltic warned in April that it would be required to withdraw from the licence unless it secured the funding required for its share of the appraisal costs by the end of May 2024.
Deltic has not provided an update on the funding drive since making the announcement in April, when it claimed the windfall tax was deterring firms from investing in North Sea projects.
The company said then: “The feedback from Deltic's Pensacola farm-out process has indicated that the continual tinkering with the Energy Profits Levy and resultant fiscal uncertainty created by the current government, along with recent rhetoric emanating from the Labour Party, have had a severely negative effect on the ability of UK Exploration and Production companies to commit to long term investments in the North Sea.”
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Deltic said if it was required to withdraw from the Pensacola licence it would transfer its interest to its partners in the relevant joint venture. These are Shell and One-Dyas of the Netherlands.
The loss of Pensacola would be a big setback for Deltic. However, the company has a stake in another North Sea prospect that has attracted attention from Shell, called Selene.
Deltic expects to drill an exploration well on Selene in July with Shell and Dana Petroleum. Korean-owned Dana bought in to the licence containing Selene in February.
Deltic's share of the well costs will be carried by Shell and Dana.
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Deltic has suggested that Selene might be easier to develop than Pensacola because it lies close to existing infrastructure. Pensacola would involve a standalone development.
The company has a stake in the Syros prospect off Scotland which it said in April has attracted interest.
Earlier this month Deltic was awarded exploration acreage in the latest North Sea licensing round.
Shares in Deltic Energy closed down 6%, 0.75p, at 12.5p on the Aim market. The shares sold for 58.2p in February last year.
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