Possibly Kim, but it's a bit of a unique situation here. Sitting back and waiting is also a risk for Viaro. I'm just guessing that by already being willing to buy 100% of the asset Selene will be tied back to would make them keen buyers. Why risk ending up with a partner you don't really want to work with or negatively impacting the unit cost of production.Regardless of who turns out to be correct, it surely puts delt in a slightly stronger position compared to a stranded large scale project like Pensacola |
The market doesn’t agree with that they know more than you or I do |
This is now so undervalued. |
Why the drop ,is it that delt are only partners in oil extraction |
And remember what happened to Pensacola
Same will happen here nothing for Delta |
 Malcy -
'It is very good news that Deltic has announced a discovery at the Selene well and whilst it is at the lower end of expectations it is a material discovery at 131 BCF and the second biggest find in recent years after Deltic’s previous success at Pensacola. Recent wells in the SNS have been targeting much less (ie Baker prospect where drilling is ongoing is only c. 60 BCF and the Earn prospect was only c. 80 BCF pre-drill) so this still ranks highly and Selene should be considered a material and highly commercial find in anyone’s book.
Perhaps more importantly the B-Sand reservoir quality is better than expected which is important and makes it 2/2 commercial discoveries. This gives Deltic enormous scope as post-well analysis continues and leaves the company with a number of options going forward.
The value of Selene will now increase as FID approaches and with 25% Deltic has a strong position to work with, don’t forget there should be no need for a further well before then. It may decide, should there be interest at a good price, to farm-down part of that interest to leave them with a decent residual stake and be carried to first gas.
As always CAPEX and OPEX are scaled in line with prospect size and reservoir quality, so with better B-Sand reservoir quality and recoverable resources concentrated in a smaller area, there will be a significantly simpler and potentially a more commercial development, for example instead of six wells being required it may be that just one or two would suffice.
Finally, with anything more than 100 BCF of gas being a commercial discovery it is worth looking at the state of Deltic who are well placed to have much more scope to do other deals using the Selene find as currency. The shares do not reflect such a success and therefore I can see a great deal of upside once upside visibility becomes clearer.' |
Jim sums up 'the game' well.It's all about rinsing the punters and it rarely pays to hold for a result. For every Cove there's a hundred IOGs or AFRs.https://oilman.substack.com/p/advanced-market-knowledge?utm_source=substack&utm_medium=email |
Discover gas and lose 20% in value, bonkers! |
Saint in exile,I believe Selene is the first exploration well in 2024. It's an economic discovery, at lower end of expectations, which should give DELT some strength as they exit NS.If the plan by management is to invest abroad, potentially in producing assets, that will be very exciting.Cash |
B4 they haven't struck oil as it's gas, plus don't worry about the share price as it's worth a lot more than present price, don't be surprised if Shell comes in with an offer to buy Delt out ot this discovery. |
Not many outfits strike oil and it’s share price falls
In Delta we don’t trust anymore |
Be stunned if Viaro don't buy Selene or delt as a whole. They need Selene to extend the economic life of Clipper. |
Ohisay it's maybe smaller but it's cheaper snd easier to extract.There hasn't been many new gas discoveries in the NS this year in fact is this Shells first this year? |
I don't think the reduction is that material to the overall commerciality - very much expect an EnQuest or Serica to take them out now. |
Thats it .
Selene while very likely commercial is smaller than forecast and means that Deltic have much less clout to argue the toss with Dana/Shell/Viaro than might otherwise have been the case.
I reckon Deltic is worth £8m to £10m including their tax losses ..theyd be better off just accepting a takeover for the whole company.
Edit... Cannacord have end December cash at £1m and have reduced their target price to 30p FWIW. |
C2B,I had that same thought. That it would be like Pensacola.The analogy was incorrect. Pensacola needed appraisal in order to firm up - they were unable to partner for that during the dropoff in investment and couldn't get a fundraiser away for it too.Selene needs no appraisal, so no further chunky exploration/appraisal cost - it goes to FID and is effectively a monetisable asset now, at lower values or later at higher values. I think they'll pulloff something with Shell/Viaro or Dana.Cash |
But they have no money, apparently they can't raise any, so they are totally at the mercy of Shell. Anybody disagree? |
£6 million market cap and a gas discovery with Shell, enough said. |
Certainly looks good enough for Shell to forge ahead with development.Once the day traders are done this should rise |
Not worried about this morning's selling. Some were always going to sell no matter what. A gift for the wise. |
Gilts are falling [as yields rise] and the equity market looks generally weak this morning [so not the best day to release + news] |
I think today’s news is worth much more than £6 million ( the current market cap given the share price response this morning). Crazy market reaction |
Way overdone. It's a potential 33bcf of gas to be sold to a partner. No further appraisal costs etc.Cash |
Andrew Nunn, CEO, commented:
"Subsurface expertise lies at the heart of the Deltic equity story and remains central to the strategic approach we recently laid out for the Company. In this context, the outcome of the Selene well is a good result overall and extends Deltic's exploration success record to two from two. Although we are predicting recoverable volumes at the lower end of pre-drill estimates, the improved quality of the B-Sand and increased resource concentration should support a simpler development with enhanced economics due to reduced CAPEX and OPEX requirements.
We are looking forward to engaging with Shell and Dana as we work through the customary post-well analysis and preparation of a plan which will move the Selene discovery towards development over the coming year. We continue to believe that the asset can create material value for our shareholders." |
"the resources are in a high quality sand that should support a simpler and cheaper development option with greater gas production per well than was envisaged pre-discovery."
So, this translates to...better than expected.
It's not always about quantity. |
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