Market's view on Deltic Energy
Published on April 2024
- Deltic Energy Plc focuses primarily on gas, though there are oil resources present as well.
- Canaccord Genuity maintains a speculative buy rating with a target of 160.00.
- The company has no income currently and just sufficient funds to reach its goals, with expectations of a gradual recovery.
- Pensacola is a significant project requiring funding or partnership, as current cash reserves are £5-6m without drilling commitments.
- Deltic has completed a farmout of the Selene prospect to Dana Petroleum, ensuring Deltic is fully financed for the estimated cost of the successful case well.
- The company’s cash is depleting, and it needs additional capital in 2024 to sustain operations, likely through farm downs, asset disposals, or issuing new equity.
- The Pensacola discovery in the Southern North Sea is one of the largest in the past decade, with Deltic preparing for an appraisal well in Q4 2024 and another well at the Selene gas prospect.
- Two consecutive wells will be drilled in the second half of the year with Shell and Dana Petroleum, using the Valaris 123 rig.
- Deltic’s cash position as of 31 December 2023 was £5.6 million, with a net cash outflow of £14.8 million mainly for funding exploration drilling.