Cluff Sees Shell Committed to its SNS UK Gas Fields
Anglo-Dutch Shell remains committed to drilling an exploration well in Cluff Natural Resources' Pensacola prospect in the second half of next year, the UK explorer – which plans to rename itself Deltic Energy – said June 4. Pensacola in licence P2252 is operated and 70%-owned by Shell; the ownership of Selene, in licence P2437, is 50-50, but the drilling plans for that have slipped to 2022. Shell is still "committed", said Cluff. Both are near offshore pipelines to shore.
Cluff is also working on existing projects, which have already attracted encouraging early interest from its peers, and it hopes to begin the farm-out process on a further two of its licences in the second half of 2020, it said. This includes the Copertine prospect in P2428, which has multi-trillion ft³ potential. The initial focus is on a number of potential carbonate reefs, believed to be analogous to the Pensacola prospect and the Darach and Crosgan discoveries, it said.
With cash of £13.2m as at March 31 it is fully funded for its planned drilling operations but it will also review "opportunities, including the potential to acquire cash generative production, as the industry adjusts to the lower commodity price environment and operators review their strategy and portfolios."
Pensacola is estimated to contain P50 prospective resources of 309bn ft³ of gas and Selene is estimated to contain P50 prospective resources of 291bn ft³.
Cluff has also applied for a number of licences in the UK 32nd offshore licensing round, with results expected this summer. All of the applications have been made solely by Cluff, apart from one which has been made jointly with an established international operator.
CEO Graham Swindells said the company has continued to progress its core gas projects and was "delighted that Shell remains committed to drilling both the Pensacola and Selene wells and we remain fully funded for our share of both wells. We are equally encouraged by the level of early interest in our other assets, in particular the Cupertino licence in the Southern North Sea and we also look forward to the results of the 32nd Licensing Round in the summer.
"In the meantime, we believe that current market conditions will further reduce operating costs and may present value accretive opportunities which, with a strong balance sheet and no debt, we look forward to pursuing.”