Shell plc SHEL, in association with Deltic Energy and Dana Petroleum, has confirmed the discovery of good-quality gas at the Selene prospect in the U.K. Southern North Sea. The gas discovery, which is in its initial stages, hints at promising dry gas reserves that will contribute to the regional energy supply.

SHEL’s Gas Discovery Insights

Recently, the SHEL operated 48/8b-3Z discovery well, which is part of the P2437 license area, reached a total depth of 3,540 meters and discovered a 160-meter-thick section of Leman Sandstone, confirming the presence of gas within the sandstone. Subsequent wireline logging and fluid sampling verified the presence of a live gas column above the gas-water contact in the key B-Sand section. The updated post-discovery map indicates a gas column height of about 100 meters with high-quality dry gas, comparable to the quality of the nearby gas fields.

The well readings verified that the gas reserves in the B-Sand section were at higher levels than the pre-drill predictions. The B-Sand section discovered in the well also had a higher-than-predicted thickness and porosity level.

SHEL’s Plans to Develop Gas Discovery

SHEL, the operator of the Selene prospect holding a 50% stake, plans to demobilize the rig by the end of next week, which will be followed by an in-depth study of core samples, fluid samples and pressure data to improve their geological and volumetric models. The data collected from the study will be used to chalk out a cost-effective and higher-yielding development plan.

Based on the initial information, Dana Petroleum and Deltic Energy (holding a 25% stake each) have created a volumetric model to estimate that Selene contains gross P50 recoverable resources of 131 billion cubic feet (bcf). The company also confirmed that the majority of the discovered resources are concentrated at the B-Sand section, which will support a simpler and cheaper development option, increasing the gas production per well.

SHEL’s Zacks Rank & Key Picks

London-based Shell is one of the primary oil supermajors — a group of the U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Archrock, Inc. AROC, Kosmos Energy Ltd. KOS and Talos Energy Inc. TALO. Archrock currently sports a Zacks Rank #1 (Strong Buy), and Kosmos Energy and Talos Energy each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.