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Deltic Energy strikes farm-out deal on Selene Prospect

Thursday, February 8 2024

Fossil Energy – Farm-out Deal

Celtic Energy announced an agreement regarding licence P2437 and the Selene Prospect on Wednesday, as it entered into a farm-out deal with Dana Petroleum, transferring a 25% interest in the licence while retaining a 25% non-operated equity interest.

The AIM-traded firm said the transaction, combined with an existing carry from Shell UK, ensured it had no exposure to drilling and testing costs for 2024, up to a certain cap.

Under the agreement, Deltic would receive $0.5m in cash from Dana on completion, covering back costs incurred by Deltic.

Additionally, Dana would carry Deltic for its residual cost exposure to the Selene well, with a value of $5m in a dry hole scenario and $6m in a success case.

Dana would also cover its 25% share of costs from 1 January 2024.

With the Dana and Shell carries, Deltic said its cost exposure to the Selene exploration well was eliminated up to total amounts of $40m for a dry hole and $49m for a success case.

Recent estimates from Shell indicated a total success case cost of $47m for the Selene well.

The rig contract for the Valaris 123, announced on 5 February, would ensure that the Selene well remained on track for drilling in the third quarter.

Related posts:

  1. Waldorf agrees to buy Korean-owned Dutch N. Sea gas producer Dana
  2. Gas and oil discovery at Shell-operated Pensacola prospect
  3. Finder Energy signs farm-out deals for three licenses
  4. Deltic hails North Sea oil and gas find made with Shell

Filed Under: Dana Petroleum, Deltic Energy, farm out transaction, International projects Tagged With: Dana Petroleum, Deltic Energy, farm-out deal, Selene Prospect

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