North Sea-focused Deltic Energy has held out the prospect it could complete a “ long-term programme of exploration wells” after being awarded extensive acreage in the latest licensing round.

The company hopes to buck the trend which has seen exploration drilling slump in the North Sea.

On Monday industry body Oil and Gas UK (OGUK) lamented that drilling has fallen to record lows this year amid the coronavirus crisis. Firms have slashed investment in the North Sea in response to the resulting plunge in commodity prices.

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OGUK said it would be essential for there to be a revival in exploration activity if the potential of the North Sea’s reserves was to be maximised.

It noted the slump in drilling has caused big problems for the supply chain and could result in infrastructure being decommissioned prematurely.

Welcoming confirmation of the formal award of six more North Sea licences Deltic said the acreage concerned was “highly prospective”.

The company told investors: “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.”

Deltic said discoveries could support the longevity of existing infrastructure and the development of new gas production hubs.

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Formerly known as Cluff Natural Resources, Deltic has helped to stimulate exploration interest in the North Sea amid challenging sector conditions.

Last year, the company persuaded Shell to buy into licences containing the Pensacola and Selence prospects.

In November Deltic said Shell had reiterated to the company and the regulator that it plans to drill a well on Pensacola. This is due to be drilled in the last quarter of 2021.

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Shell also plans to drill a well on Selene with Deltic, which has spurned takeover approaches from Reabold Resources and Independent Oil and Gas in recent months.