Deltic Energy (DELT ) shares jumped 22% after the company announced a "significant gas and oil discovery" at Pensacola on Licence P2252 in the Southern North Sea.
The company said Pensacola could be one of the largest natural gas discoveries in the Southern North Sea in over a decade. Deltic's exploration well confirmed the Pensacola discovery to contain P50 EUR of 302 BCF, aligned with its pre-drill guidance.
Deltic believes the well will open a new Zechstein play in the mature hydrocarbon basin. It said flow test results were in line with its expectations based on reservoir parameters derived from the well.
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Deltic shares jumped as high as 22% on the news, which was fully aligned with Deltic's pre-drill guidance and represents a significant value inflection point for the company as one of the largest natural gas discoveries in the Southern North Sea in over a decade.
Deltic has a 30% working interest in Licence P2252, alongside Shell (65%) and ONE-Dyas (5%).
The well 41/05a-2, operated by Shell, reached a total depth of 1,965m, and the presence of mobile gas and oil in the primary Zechstein carbonate interval was confirmed via wireline logs.
The well encountered Zechstein at 1,745m TVDSS and confirmed a reservoir thickness of 18.8m with better than expected porosity averaging 16%. The well penetrated the edge of the Pensacola structure in a down dip location and has proven a "substantial hydrocarbon column", Deltic reported.
Being located down dip, the flow rates observed during the test are not expected to be representative of flow rates of potential future production wells, which would likely target the central part of the Pensacola structure, and are expected to generate higher rates, Deltic explained.
Deltic believes the well will open a new Zechstein play in the mature hydrocarbon basin, highlighting the remaining potential of the North Sea as a source of domestically produced natural gas while the country transitions to net zero.
Deltic will now incorporate the findings into its geological and commercial models and work with its JV partners on an appraisal and development plan. Deltic for future news on development of the discovery.