RCS - Orcadian Energy PLC - Serica’s acquisition of Parkmead (E&P) Ltd

Orcadian EnergyAnnouncement

13/12/2024 09:00

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RNS Number : 0331Q  Orcadian Energy PLC  13 December 2024

13 December 2024

This is a Reach announcement and the information contained is not considered
to be material or to have a significant impact on management's expectations of
the Company's performance. Reach is an investor communication service aimed at
AIM quoted companies to distribute non-regulatory news releases into the
public domain.

Orcadian Energy plc

("Orcadian" or the "Company")

Serica's acquisition of Parkmead (E&P) Ltd

Orcadian Energy (AIM: ORCA) is pleased to note yesterday's announcements from
both Serica and The Parkmead Group plc.

Steve Brown CEO of Orcadian Energy said:

"We are really pleased to hear that Serica will acquire Parkmead (E&P) Ltd
and will become operator of licence P2634. Orcadian holds a 50% interest in
this licence, and we welcome Serica's purchase of this very significant
opportunity, which has the potential to be one of the largest remaining oil
developments in the North Sea."

Fynn Licence P2634

The licence contains a very substantial viscous and heavy oil discovery which
has a gross P50 contingent recoverable resource of 292 MMbbl, based upon the
latest operator estimates.

The Fynn licence is situated in the Outer Moray Firth and comprises blocks
14/15a, 14/20d and 15/11a. Orcadian (50% interest) together with the licence
operator Parkmead (50% interest), will leverage expertise gained in developing
viscous crudes to work towards commercialisation of Fynn Beauly, which is one
of the UK's largest undeveloped discoveries. This oil accumulation has been
proven by three wells and is estimated to contain most likely (P50) gross
contingent resources of 292 MMbbl, 257 MMbbl of which is on the licence; a
resource of the same scale as Rosebank.

The approved three-year work programme will progress towards a technically and
economically viable development, that can be delivered within the context of
the NSTA's Net Zero Strategy. By undertaking geophysical, geochemical and
reservoir modelling studies the work will assess the feasibility of
implementing polymer flooding with geothermal heat uplift to improve recovery.

Why Viscous Oil Matters

The oil within the Fynn reservoir is viscous and made up of long chain
hydrocarbons, which means that when refined it contributes little to gasoline
supplies, but is a good feedstock for lubricants, asphalt and anode grade
petroleum coke (an essential component for fast charge EV batteries). Orcadian
believes that gas and viscous oils will be the post-transition hydrocarbons
essential to the prosperity of every economy.

Why Domestic Production is Best

Producing heavy oil domestically, under the stewardship of the NSTA, is a
considerably  better option than importing these oils from Venezuela or
Canada. Both these countries produce most of their heavy oil using thermal
means - steam assisted gravity drainage, cyclic steam stimulation or steam
flood. The measure of efficiency of all these techniques is the steam-oil
ratio, which is the number of barrels of cold-water equivalent of steam
required to recover a barrel of oil. An outstanding steam oil ratio is two,
but steam-oil ratios of four or five are common. The CO(2) emissions from
burning gas to generate the steam are approximately 30 kgCO(2)/bbl of water.
So, emissions per barrel from imports from Canada or Venezuela are typically
60 to 150 kgCO(2)/bbl, even before the transportation emissions are accounted
for. It is these high emission levels, and the strip mining and chemical
processing often used for extra-heavy oil extraction that have given heavy
oils such an undeserved reputation.

With a polymer flood approach, by incorporating heat from geothermal sources
to reduce reservoir oil viscosity, and by electrifying production systems
using green energy, the emissions per barrel in the production process can be
reduced to single figures, better than most UK light oil fields. The UK and
her allies need viscous oils both for strategic security of energy and for the
petroleum-derived products that support both the transition and the
post-transition economy.

Buying these products made from imported petroleum rather than our own oil
also damages the balance of payments, eliminates great jobs, and increases
actual greenhouse emissions.

In summary we are delighted to have the Fynn licence in hand and we are
committed to finding a way to produce this essential oil with the least
emissions possible.

 

For further information on the Company please visit the Company's website:
https://orcadian.energy (https://orcadian.energy)

Contact:

 Orcadian Energy plc          + 44 20 7920 3150
 Steve Brown, CEO

 Alan Hume, CFO
 Novum (Joint Broker)         +44 207 399 9425
 Colin Rowbury / Jon Belliss
 Tavistock (PR)               + 44 20 7920 3150
 Nick Elwes / Simon Hudson    orcadian@tavistock.co.uk (mailto:orcadian@tavistock.co.uk)

 

 

Qualified Person's Statement

Pursuant to the requirements of the AIM Rules and in particular, the AIM Note
for Mining and Oil and Gas Companies, Maurice Bamford has reviewed and
approved the technical information and resource reporting contained in this
announcement.

Maurice has more than 35 years' experience in the oil & gas industry and 3
years in academia. He holds a BSc in Geology from Queens University Belfast
and a PhD in Geology from the National University of Ireland. Maurice is a
Fellow of the Geological Society, London, and a member of the Geoscience
Energy Society of Great Britain. He is Exploration and Geoscience Manager at
Orcadian Energy.

About Orcadian Energy

Orcadian is a North Sea focused, low emissions, oil and gas exploration and
development company. Orcadian may be a small operator, but it is also nimble,
and the Directors believe it has grasped opportunities that have eluded some
of the much bigger companies. As we strike a balance between Net Zero and a
sustainable energy supply, Orcadian intends to play its part to minimise the
cost of Net Zero and to deliver reliable energy to the UK.

Orcadian's key asset is the Pilot oilfield, Pilot was discovered by PetroFina
in 1989 and has been well appraised. The field has excellent quality reservoir
and contains 263MMbbl of a viscous oil ranging in gravity from 17º API in the
South of the reservoir to 12º API in the North. In planning the Pilot
development, Orcadian has selected polymer flooding and wind power to
transform the production of viscous oil into a cleaner and greener process.
Polymer significantly reduces fluid handling requirements and hence energy
consumption as well as boosting recovery. Ithaca Energy, operator of the
Captain field in the Inner Moray Firth, has enjoyed consistent success in
applying polymer flood to the highly analogous Captain field. Following the
recent farm-down of Pilot, the project is now under the stewardship of Ping
Petroleum UK PLC ("Ping") and is intended to be amongst the lowest carbon
emitting oil production facilities in the world.

Ping is progressing a low-emissions, phased, field development plan for Pilot
based upon a polymer flood of the reservoir, a Floating Production Storage and
Offloading vessel (FPSO) and provision of power from a floating wind turbine
or a local wind farm.

Orcadian has an 18.75% fully carried interest in licence P2244 (block 21/27a)
and a 100% interest in licence P2482 (blocks 28/2a and 28/3a). Ping is
operator of P2244 and the Pilot development project.

Orcadian was awarded three licences in the 33(rd) round. The Mid-North Sea
High licence, P2650, contains shallow gas leads. Orcadian applied in
partnership with Triangle Energy, an Australian listed energy company.
Orcadian is licence administrator and holds 50% of the offered licence. The
Mid-North Sea High licence covers blocks 29/16, 29/17, 29/18, 29/19, 29/21,
29/22, 29/23, 29/27 and 29/28.

The Fynn licence, P2634, contains a very substantial heavy oil discovery.
About 88% of the resource on a best technical case is estimated to lie within
the area of the offered licence. Orcadian has a 50% working interest in the
Fynn licence which is operated by the Parkmead Group. The Fynn licence covers
blocks 14/15a, 14/20d and 15/11a.

The SNS licence, P2680, 50% Orcadian on completion of a proposed transaction,
contains the Earlham discovery, a low-calorie gas discovery with 114bcf of
methane resources on a P50 basis, the Clover prospect which has P50
prospective resources of 153bcf, and the decommissioned Orwell field which has
redevelopment potential, alongside a number of smaller prospects. The Marine
Low Carbon Power Company Ltd, an affiliate of IPC is intended to own the other
50% of P2680 and will carry Orcadian to first gas.

 

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