NORTH Sea minnow Deltic Energy has underlined the value of the endorsements it has won from bigger fish as it aims to develop a ‘conveyor belt’ of gas assets.

In August the company concluded what it called a transformational deal with Cairn Energy, which bought into acreage containing a number of prospects.

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The deal came two years after Royal Dutch Shell took stakes in other prospects, the potential of which had been spotted by Deltic.

As the company announced interim results yesterday, chairman Mark Lappin said the deals with Cairn and Shell could pave the way to Deltic becoming a significant producer.

“Our recently announced multi-licence deal with Cairn over multiple gas prospects in addition to our existing partnership with Shell is an example of the repeatability of our business model and will allow us to accelerate the development of our conveyor belt of UK gas assets,” said Mr Lappin.

Deltic has made progress amid the challenges posed for sector players by the fallout from the coronavirus crisis.

Oil and gas prices plunged last year following the imposition of lockdowns around the world, leaving small players facing a struggle to win support among investors. The rollout of coronavirus vaccines has sparked a rally which has seen gas prices surge to record levels.

Aim market-listed Deltic looks set to be rewarded for its decision to invest in exploration work in areas of the North Sea whose promise it decided had been overlooked by bigger fish.

READ MORE: Deltic bucks gloomy trend with plan to step up exploration

Cairn and Shell appear ready to make the investment required to progress work on Deltic’s acreage.

In March Shell confirmed its commitment to drill a well on the Pensacola prospect with Deltic. This is scheduled for the second quarter of next year.

Deltic’s chief executive, Graham Swindells, noted the partnership formed with Edinburgh-based Cairn has already started seismic survey work on a licence.

Deltic was formed by a pioneer of North Sea exploration work, Algy Cluff. The company was formerly known as Cluff Natural Resources. It acquired North Sea exploration acreage amid the last downturn in the industry, after facing opposition to plans to produce gas by burning coal held under the Forth.

READ MORE: Oil firm highlights potential of undeveloped finds off Shetland

Last year, Deltic spurned takeover approaches from Reabold Resources and Independent Oil and Gas. Directors reckoned they undervalued the business.

Shares in the company closed down 0.05p at 2.28p, leaving it with a stock market capitalisation of around £32 million.