Deltic Energy (AIM: DELT) has completed its farm-out deal with Dana Petroleum for a 25% stake in the North Sea’s Salene project.
Located in the Southern North Sea, Selene has estimated gross P50 prospective resources of 318 billion cubic feet of gas, with a geological chance of success of 70%.
Following regulatory and partner consents, Deltic retains a 25% stake in the P2437 licence while Shell controls a 50% operated share.
Deltic flagged a potential farming-out of an interest in its stake in a pair of Shell-operated North Sea targets, including Selene, towards the end of last year.
The deal will result in no exposure to 2024 drilling and testing costs up to a cost cap of $49 million for Dana Petroleum.
The firm has shared that since contracting the Valaris 123 rig in February the Salene project remains on track and operations are expected to commence in July of this year.
It had previously been reported that Dana Petroleum would pay $500,000 in cash on completion for the transfer of the Selene stake, while carrying Deltic for its residual cost exposure to the Selene well to a value of $5 million, and $6 million in a success case.
Dana will also pay 25% share of costs from January 1 this year.
Graham Swindells, chief executive officer of Deltic Energy, commented: “We are delighted to announce completion of the farm-out of Licence P2437 and formally welcome Dana to the joint venture.
“Well planning remains on schedule and we are looking forward to commencing Selene well operations with Shell and Dana in the summer. Our attention is now firmly focussed on drawing the Pensacola farm-out process to a successful conclusion and we look forward to updating the market in due course.”
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