Deltic Energy plc plans to cut costs and look for international projects, with an initial focus on early cash flows and faster cycle times, while continuing with its existing UK core assets.
SELENE
The company said that the “political and fiscal headwinds” had “hampered” the UK’s oil and gas industry in recent years” rendering it “not the ideal place” to invest in new opportunities.
Other changes include non-executive director Peter Cowley stepping down with no plans for a replacement, leaving independent NEDs Mark Lappin and Peter Nicol.
Over the next 12 months, Deltic will mainly focus on its 25% working interest in the Selene prospect while “eliminating or deferring” expenditure on non-core UK assets.
The Shell-operated well reached total target depth of 3,540m on 17 October, encountering a “160 metre thick” section of Leman Sandstone with “gas present throughout”.
Further results are pending from logging and fluid sampling operations from the southern North Sea project.
In a success case, the partners intend to proceed directly to field development planning.
STABILISE
Deltic’s other projects include the Blackadder licence P2672 for which it has received farm-in interest from “a number of companies”.
The company said it intended to defer planned work programmes until at least mid-2025 to minimise near-term expenditure allowing discussions to progress.
The central North Sea Syros licence P2542 is likely to expire on 30 November.
The North Sea Transition Authority had indicated it was not minded to agree to an extension after “a number of parties” declined to progress with the farm-out process.
Deltic has begun talks with the NSTA on the phase A work programme for the Dewar licence P2646. The company has no intention of incurring any of the 2025 costs.
Chief executive Andrew Nunn added: “I would like to thank Peter Cowley for his board contributions and support over the years. We wish him all the best in his future endeavours.
“The key changes we have announced today, in addition to a raft of other less significant changes, will have an immediate and material impact on the company’s operational expenditure and are expected to result in savings of 40% compared to costs previously budgeted by management for 2025.
“These savings are key to extending the time period in which to identify and incubate those new opportunities that we believe will help towards stabilising the business and providing a platform for future growth supporting our objective of creating positive returns for shareholders.”