Deltic Energy keeps 2020 cash outflow stable

North Sea-focussed natural resources investing company Deltic Energy reported a net cash outflow from operations and investing activity of £1.8m in its final results on Monday, in line with the £1.8m it reported a year earlier.

The AIM-traded firm, which remains pre-revenue, said its cash position on 31 December stood at £12m, down from £13.8m at the end of 2019. with no debt.

As at 31 March, the company had cash on hand of £11.52m on an unaudited basis.

Operationally, it completed a “rigorous” technical programme on Pensacola, resulting in the post-year-end announcement that the Deltic-Shell joint venture would drill a well on the prospect in May 2022.

Technical work on Selene was ongoing, having delivered a resource update including an increase in gas initially in place, and a “significantly enhanced” geological chance of success.

An exploration well was expected there in 2022.

Deltic said “significant” progress had been made on the Cupertino Area, following the reprocessing of seismic data to deliver a material resource update with a combined P50 prospective gas resource of close to one trillion cubic feet.

A farm-out process was underway, with “significant interest” reported from potential partners.

Reprocessing of legacy seismic on the Cortez prospects was undertaken, with the primary Cortez South prospect identified with estimated P50 prospective resources of more than 300 billion cubic feet.

Deltic was awarded six new licences in the UK's 32nd licensing round, including the previously-held Cadence prospect.

It also further expanded its partnership with Shell, with the award of an additional new joint licence to the north of Pensacola.

“Over the last year, we have continued to make significant progress in advancing our existing licence portfolio and both materially expanding and diversifying the overall asset base of the company,” said chief executive officer Graham Swindells.

“We have continued to work closely with our partner Shell on our two most advanced projects resulting in the recent firm well investment decision on the Pensacola prospect while continuing to move closer to a well investment decision on Selene.

“The company continues to execute its natural gas focussed exploration strategy, strengthening its strategic position in the southern North Sea following another successful outcome in the UK's latest licensing round which doubled the number of licences the company holds.”

Swindells said that, with its “attractive” portfolio of gas-focussed prospects located close to existing infrastructure, as well as an improved outlook in the form of commodity prices and increased levels of activity, the company was in a “strong position” to deliver growth.

“We look forward to further progressing our prospects towards drilling and continuing to develop our partnership with Shell as we move closer to drilling our first well at Pensacola.”

At 1518 BST, shares in Deltic Energy were up 2.05% at 1.86p.