Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural Resources

27 July 2023

Deltic Energy Plc ("Deltic" or "the Company")

Update on Capricorn Energy JV Licences

Deltic Energy Plc, the AIM-quoted natural resources investing company with a high impact exploration and appraisal portfolio focused on the Southern and Central North Sea, is providing an update in relation to the five Southern North Sea gas exploration licences (the "Licences") held jointly with Capricorn Energy PLC ("Capricorn").

Following recent changes at Capricorn that include a decision to exit from its exploration assets outside Egypt, the Company has been formally notified of Capricorn's intention to withdraw from the Licences.  As part of ongoing rationalisation and high grading of its portfolio, Deltic has decided to withdraw from three of the Licences (P2560, P2561 and P2562) and therefore the JV partnership will move to relinquish these three licences as soon as practicable.

With respect to Licences P2567 (Cadence) and P2428 (Cupertino), Deltic recognises the significant prospectivity highlighted by the technical work programmes completed by Capricorn on behalf of the JV and intends to continue with these two licences following the withdrawal of Capricorn.  

Across the P2567 and P2428 acreage position, the committed work programme has been completed in relation to both licences, and Deltic has been fully carried by Capricorn through nearly US$10 million of technical work to date including the pre-funding of nearly 700km² of new 3D seismic as well as the reprocessing of a number of legacy 3D seismic surveys.  During this intense period of geological evaluation, the JV identified and matured 17 leads and prospects in the Carboniferous with combined, gross P50 gas-initially-in-place of more than 2.6 TCF, located on Licences P2567 and P2428 .  Many of these prospects are analogous with the Pegasus and Andromeda discoveries located on the blocks immediately to the south of these licences.

The current terms of Licences P2567 and P2428 are due to expire on 30 November 2023 and 31 March 2024 respectively and, once Deltic has been re-appointed as Administrator of these licences, Deltic intends to request an extension of the current licence terms from the North Sea Transition Authority ("NSTA").  If such extension requests are approved by the NSTA, Deltic would continue to assure and high grade the prospects identified and matured, while seeking to attract another partner or partners to assist with future drilling activity across the two licences.

Graham Swindells, Chief Executive of Deltic Energy, commented:    

"While we would have preferred to continue in partnership with Capricorn on these  exploration licences, Capricorn has recently changed strategic direction. Our extensive work together has advanced our understanding of the potential of the area; further demonstrated the excellent prospectivity present on the two most advanced licences and allowed us to focus on those licences showing excellent potential. We look forward to advancing the key exploration prospects on this acreage."

"Following our success earlier this year with the Pensacola gas and oil discovery, Deltic remains committed to exploring in the Southern North Sea which has the potential to provide high quality UK based employment, tax revenues and energy security while at the same time offsetting higher carbon intensity imports as the UK continues its transition towards a net zero future."

Qualified Person's Statement:

Andrew Nunn, a Chartered Geologist and Chief Operating Officer of Deltic, is a "Qualified Person" in accordance with the AIM Guidance Note for Mining, Oil and Gas Companies, June 2009 as updated 21 July 2019, of the London Stock Exchange. Andrew has reviewed and approved the information contained within this announcement.

Glossary of Technical Terms

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