Formal Award of Licences - UK 32nd Licensing Round

1 December 2020

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

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

Formal Award of Six Licences in the UK's 32^nd Offshore Licensing Round 

Deltic Energy Plc, the AIM quoted natural resources investing company progressing its high impact exploration and appraisal portfolio focused on the Southern and Central North Sea, is pleased to report that further to the provisional award of new licences in the UK's 32nd Offshore Licensing Round announced on 3 September 2020, these six new licences comprising twelve blocks have now been formally awarded to Deltic by the UK Oil and Gas Authority and that each of the licences take effect from today.

The licences and blocks formally awarded are as follows:

All licences have been awarded to the Company on a 100% equity position, with the exception of P2558, which has been jointly awarded with Shell UK holding a 70% working interest.

The Board views these blocks as highly prospective and containing a variety of exploration prospects which will significantly enhance both the pipeline of potential drilling opportunities and the overall prospective resources associated with the Company's assets as these areas are matured during the initial term of the licences.

The new licences reinforce the Company's exploration focussed strategy which is based upon creating a steady 'conveyor belt' of licences that can be matured and support a long-term programme of exploration wells with discoveries supporting the longevity of existing infrastructure and the development of new gas production hubs.

Southern North Sea Licences

Five of the six new licences awarded to Deltic are in the Southern North Sea Gas Basin, where the Company has now amassed a total of ten licences. When combined with its existing licence position, the new awards enhance the Company's strong strategic position in the gas basin, controlling over 2,733 km² of contiguous licences stretching from south of the Breagh gas field over to the Cupertino area located towards the west of the Cygnus gas field. 

P2567 - Cadence

The Company is particularly pleased to have been awarded Licence P2567 which sees the Company regaining blocks 43/11 and 43/12, containing the Cadence prospect, despite these blocks being the subject of significant competition. These blocks are located immediately north of the Pegasus and Andromeda discoveries which are operated by Spirit Energy. The Company has worked extensively on the seismic data and other datasets to enhance its understanding of this area which has resulted in a more robust interpretation over the intra-Carboniferous Cadence prospect and the identification of additional prospectivity beneath the Base Permian Unconformity ("BPU").  The Board considers this BPU prospect, the Cordova prospect, to be highly analogous to the recent Andromeda North discovery which was drilled by Spirit Energy in 2019 on the block immediately to the south of 43/12b. 

The extensive work already carried out on the Cadence prospect means it is effectively drill ready, and the Company is now starting the process of seeking the best possible partner to drill this exciting prospect.  A summary of the key prospects identified on this licence are set out below:

1  Deltic estimate as per the Oil and Gas Authority licence application

2  2016 Competent Person's Report

P2558 - Pensacola North

The Board is also delighted that the Company has been awarded an additional licence covering two-part blocks, 41/5b & 42/1b jointly with Shell which is adjacent to the Deltic/Shell JV's existing Pensacola licence (P2252).  The Company has a 30% working interest in the licence and will fulfil the role of operator as the technical work begins.  This area has been largely imaged on the new Bluewater 3D survey shot by the Deltic/Shell JV in 2019 and contains a potential northern extension of the Pensacola prospect.

P2560, P2561, P2562 - Breagh South Area

The Company has also been awarded three licences in the underexplored area to the south of the Breagh gas field and its existing licence P2424, where the Cortez prospect is currently being progressed.  This is a proven gas bearing area with a limited number of well penetrations and a mixture of 2D and 3D seismic data of varying vintage and quality which will respond well to modern reprocessing. The Company considers this area to have significant potential, with multiple leads mapped in the Carboniferous with additional upside in the Zechstein and the Leman Sandstone in the southern-most blocks.  Given the knowledge and experience gained from working in this area for a number of years coupled with recent industry success, the Company should be well placed to reinvigorate interest in this underexplored and overlooked area.   

Central North Sea Licence Awards

P2542

P2542 in the Central North Sea contains two prospects in the Jurassic Fulmar Sandstone which have been previously identified and which the Board believes have significant upside potential.  Further work will be undertaken during the initial licence period to mature these prospects.

Graham Swindells, Chief Executive of Deltic Energy, commented:

"We are delighted to be able to confirm that these new licences have been formally awarded following the announcement of provisional awards in early September 2020.  Our company was one of the most successful applicants in what was a highly competitive Licensing Round and the extent of the awards further reinforces the strong strategic position we have built up in the Southern North Sea and our commitment to continuing to grow and advance our exploration assets towards drilling, as we have done with Shell on Pensacola and Selene. We are now commencing work to progress the many opportunities on these exciting new licences and look forward to providing further updates in due course."

Qualified Person

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

**ENDS**

For further information please contact the following:

Notes to Editors

Deltic Energy Plc (AIM: DELT) is a natural resource investing company with multiple high impact exploration and appraisal assets focused on the UK North Sea.

The Company's diversified asset base contain near term, infrastructure focused oil and gas exploration drilling opportunities in both the Central and Southern North Sea together with larger, high impact opportunities in new play types along the northern margin of the Southern North Sea Gas Basin. It also offers a unique combination of high quality, low risk, low cost drilling prospects at various stages of maturity in an area where recent exploration has targeted both mature and new plays, resulting in large discoveries.

Following successful farm-outs of Licences P2252 and P2437 to Shell U.K. Limited, Deltic's Pensacola and Selene prospects are scheduled to be drilled in 2021 and 2022. The Company is seeking to repeat this success as it progresses its other licences awarded in the 30th and 32nd Offshore Licensing Rounds including licence P2352 which contains the Dewar oil prospect, P2428 containing Cupertino, P2424 containing Cortez and the recently awarded block 43/11 containing Cadence.

The Company achieved success in the UK Oil and Gas Authority's recent 32nd Licensing Round, in which it was provisionally awarded six new licences covering approximately 2,155.5 km². All of the new licences are being awarded to Deltic on a 100% equity basis with the exception of one which has been jointly awarded with Shell holding a 70% working interest, strengthening the two companies' partnership further.

Deltic has built a strong strategic licence position in the Southern North Sea Gas Basin and is focused on extracting much needed gas to supply the UK's energy mix which is currently heavily reliant on imports. Following the award of the new licences, Deltic will have  P50 prospective resources totalling 3.5 TCF (gross), equivalent to c. 600 million barrels of oil, spread across multiple prospects. 

Glossary of Technical Terms

BCF:                                       Billion Cubic Feet

GCoS:                                    Geological Chance of Success

Prospective Resources: Estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled.

P90:                                       a 90% probability that a stated volume will be equalled or exceeded

P50:                                       a 50% probability that a stated volume will be equalled or exceeded

P10:                                       a 10% probability that a stated volume will be equalled or exceeded