REG - Orcadian Energy PLC - 33rd Licensing Round Offer of Awards

Orcadian EnergyAnnouncement

01/02/2024 07:00

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RNS Number : 6055B  Orcadian Energy PLC  01 February 2024

 

 

01 February 2024

Orcadian Energy plc

("Orcadian Energy", "Orcadian" or the "Company")

 

33(rd) Licensing Round Offer of Awards

 

Highlights

Orcadian Energy is delighted to report that NSTA has announced the offer of a
further tranche of licence awards in the 33(rd) Round.

NSTA has confirmed, in an announcement dated 31 January 2024, that Orcadian
Energy will be offered two licences in the Central North Sea ("CNS") one in
partnership with Parkmead Group, and the other in partnership with Triangle
Energy. Orcadian anticipates that these licences will be formally issued
within the next three months.

Mid-North Sea High Licence

 

The Mid-North Sea High ("MNSH") licence contains shallow gas prospects and
leads which contain up to 336 bcf of gross prospective recoverable resource on
a P50 basis, this estimate is an Orcadian management estimate, which is
provided for guidance only, and was submitted in the licence application. The
two largest prospects - Glenlough and Breckagh - are estimated to account for
about 80% of the identified resource potential. Orcadian applied in
partnership with Triangle Energy, an Australian listed energy company.
Orcadian would be licence administrator and would hold 50% of the offered
licence.

The Mid-North Sea licence covers blocks 29/16, 29/17, 29/18, 29/19, 29/21,
29/22, 29/23, 29/27 and 29/28.

Fynn Licence

The Fynn licence contains a very substantial heavy oil discovery which has a
gross P50 contingent recoverable resource of 292 MMbbl, based upon the latest
internal estimates as presented to NSTA by Parkmead (E&P) Limited, the
proposed operator. About 88% of the resource on a best technical case is
estimated to lie within the area of the offered licence.

Orcadian has been offered a 50% working interest in the Fynn licence to be
operated by the Parkmead Group. The Fynn licence covers blocks 14/15a, 14/20d
and 15/11a.

 

As announced on 19 January 2023, the Company made three licence applications,
two of which are described above. The third area applied for, which was in the
Southern North Sea, has not been offered for award in this tranche but it is
anticipated it will be considered in a future tranche, and further
announcements will be made as appropriate.

Resource Update

As a result of the above licence awards and based upon the assumption that the
planned disposal of an 81.25% interest in P2244 completes before 31 March
2024, Orcadian management's latest view of the Company's resources is set out
below.

 

Resource estimates comprise the current Sproule CPR for Pilot, Elke, Narwhal
and the Elke satellites; and for the remainder the estimates are management or
operator estimates as submitted to NSTA in the licence applications.
Prospective resources are only included for the high-graded leads and
prospects: Clover, Breckagh, Glenlough and QI (quantitative interpretation)
geophysically supported Elke satellites.

 

1.    Orcadian's Current Resource Estimate (adjusted for the proposed
disposal of Pilot and the TGS royalty).

 

                                                                                    Gross                                                                                                                                     Net Attributable
 Licence                  Operator   Key Discoveries or Prospects                   Gross 2P   Gross 2C Contingent Resources (On hold)  Gross 2C Contingent Resources (Technical)  Gross 2U Prospective Resources (Unrisked)  Net 2P     Net 2C Contingent Resources (On hold)  Net 2C Contingent Resources (Technical)  Net 2U Prospective Resources (Unrisked)

Reserves

Reserves

          MMboe                                    MMboe                                      MMboe
          MMboe                                  MMboe                                    MMboe
                                                                                    MMboe                                                                                                                                     MMboe
 Oil & Liquids reserves per asset
 P2244                    Ping       Pilot Main and Pilot South                     78.8       -                                        13.0                                       -                                                                                                                                     -

                                                                                                                                                                                                                              14.6*      -                                      2.4*
 P2482                    Orcadian   Narwhal, Elke, & selected Elke satellites      -          52.7                                     2.0                                        52.6                                       -          52.2                                   2.0                                      52.1

 Total for Oil and Liquids                                                          78.8       52.7                                     15.0                                       52.6                                       14.6       52.2                                   4.4                                      52.1

 

Source: Sproule

*assuming completion of the proposed disposal of the Pilot project so that
Orcadian's interest is reduced to 18.75%.

 

2.    Management Internal Estimates of resources contained in the new
licences offered for award by the NSTA today

 

The below is compiled using the estimates submitted to the NSTA, but the
numbers have not been independently audited and accordingly are provided for
guidance purposes only and should not be relied upon.

 

                                                     Gross (On blocks)                                                                                                                         Net Attributable
 Licence    Operator   Key Discoveries or Prospects  Gross 2P   Gross 2C Contingent Resources (On hold)  Gross 2C Contingent Resources (Technical)  Gross 2U Prospective Resources (Unrisked)  Net 2P     Net 2C Contingent Resources (On hold)  Net 2C Contingent Resources (Technical)  Net 2U Prospective Resources (Unrisked)

Reserves

Reserves

          MMboe                                    MMboe                                      MMboe
          MMboe                                  MMboe                                    MMboe
                                                     MMboe                                                                                                                                     MMboe
 Oil & Liquids resources per asset
 Fynn       Parkmead   Fynn (Beauly)                 -          -                                        257.2                                      -                                                                                                                                     -

                                                                                                                                                                                               -          -                                      128.6
 Total for Oil and Liquids                           -          -                                        257.2                                      -                                                     -                                      128.6                                    -
 Gas resources per asset (each bcf of gas is converted to MMboe by dividing by
 6)
 MNSH       Orcadian   Glenlough & Breckagh                     -                                        -                                          44.8                                       -          -                                      -                                        22.4
 Total                                               -          -                                        257.2                                      44.8                                       -          -                                      128.6                                    22.4

 

Source: Estimates. Not independently audited.

 

 

Steve Brown, Orcadian's CEO, said:

 

"We are delighted that NSTA has announced these offers of licence awards. Our
strategy has been to licence or acquire discoveries and compelling prospects,
and then to farm-out an interest in the licence to finance exploration
drilling or, best of all, development. We will build upon that strategy which
has been validated by the signing of a sale and purchase agreement for the
Pilot field with Ping Petroleum, a deal which we are on track to complete by
the end of March 2024*.

 

"We are excited to work with our partners Parkmead and Triangle. With
Parkmead, our focus will be on designing a work programme to unlock the
potentially very significant resource base in Fynn; and with Triangle we will
be working to transform the leads on the Mid North Sea High licence into
prospects which can be drilled, likely at a relatively low cost as the gas
prospects are so shallow."

 

* completion is subject to satisfaction of the conditions precedent set out in
the announcement dated 7 December 2023

 

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

 

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 33 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.

 

 

 

 

Contact:

 

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

 Alan Hume, CFO
 WH Ireland (Nomad and Broker)                        +44 20 7220 1666
 Katy Mitchell / Andrew de Andrade (Nomad)

 Harry Ansell / Fraser Marshall (Corporate Broking)

 Tavistock (PR)                                       + 44 20 7920 3150
 Nick Elwes / Simon Hudson                            orcadian@tavistock.co.uk (mailto:orcadian@tavistock.co.uk)

 

About Orcadian Energy

Orcadian is a North Sea focused, low emissions, oil and gas development
company. In planning its Pilot development, Orcadian has selected wind power
to transform oil production into a cleaner and greener process. The Pilot
project is moving towards approval and will be amongst the lowest carbon
emitting oil production facilities in the world, despite being a viscous
crude. 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 Energy (CNS) Ltd, Orcadian's operating subsidiary, was founded in
2014 and is the sole licensee of P2244, which contains 78.0 MMbbl of 2P
Reserves in the Pilot discovery, and of P2482, which contain a further 52.2
MMbbl of 2C Contingent Resources in the Elke and Narwhal discoveries (as
audited by Sproule, with both numbers modified to take into account the TGS
royalty, see the CPR in the Company's Admission Document for more details).
Within these licences there are also 118 MMbbl of unrisked Prospective
Resources (modified for TGS royalty). These licences are in blocks 21/27a,
28/2a and 28/3a, and lie 150 kms due East of Aberdeen.

Pilot, which is the field with the largest reserves in Orcadian's portfolio,
was discovered by PetroFina in 1989 and has been well appraised. In total five
wells and two sidetracks were drilled on Pilot, including a relatively short
horizontal well which produced over 1,800 bbls/day on test. Orcadian's
proposed low emissions, field development plan for Pilot is based upon a
Floating Production Storage and Offloading vessel (FPSO), with over thirty
wells to be drilled by a Jack-up rig and provision of power from a floating
wind turbine.

Orcadian has entered into a conditional sale and purchase agreement with Ping
Petroleum UK plc ("Ping") which details the terms under which Ping will
farm-in to the Pilot development project. Upon conclusion of this deal
Orcadian would have an 18.75% stake in the Pilot development with all
pre-first oil development costs paid by Ping.

Emissions per barrel produced are expected to be about a tenth of the 2021
North Sea average, and less than half of the lowest emitting oil facility
currently operating on the UKCS. On a global basis this places the Pilot field
emissions at the low end of the lowest 5% of global oil production.

 

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