REG - Orcadian Energy PLC - Annual Licensing Rounds

Orcadian EnergyAnnouncement

07/11/2023 07:30

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RNS Number : 6234S  Orcadian Energy PLC  07 November 2023

 

 

 

 

7 November 2023

Orcadian Energy plc

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

 

Annual Licensing Rounds

 

Orcadian is pleased to note the recent press release from the Government of
the United Kingdom that they intend to legislate to require the North Sea
Transition Authority (NSTA) to invite applications for new oil and gas
production licenses on an annual basis, subject to certain key conditions
being met 1 .  The key conditions relate to the balance of trade in
hydrocarbons and emissions intensity of gas production relative to LNG
imports.

 

As announced on 19 January 2023, the Company made three licence applications
in the 33(rd) Oil and Gas Licensing Round, two in partnership with other
companies and one on its own. The NSTA announced the award of 27 licences in a
first batch of awards, from 115 applications, with 6 more blocks, which were
ready to be offered, merged into five existing licences 2 . NSTA notes that
all applications have been through the initial Habitat Regulation Assessment
and the blocks awarded to date have been identified as not requiring further
assessment. A decision on the other blocks will be made once the Habitat
Regulation Assessment Further Appropriate Assessment process has been
completed. Orcadian can confirm that no other company was awarded the blocks
applied for by Orcadian, and that the Directors remain optimistic that the
Company's applications will be successful.

Steve Brown, Orcadian's CEO, said:

 

"We are delighted to hear that the Government intends to legislate for annual
oil and gas licensing rounds. We believe this puts a lid on the tired argument
that domestic oil and gas production is inconsistent with our climate
commitments.

 

"We believe new projects are the key to reducing the UK's emissions from
producing the oil and gas that is needed for a secure transition. The NSTA
sets industry stringent hurdles to be cleared before new projects can
progress.

 

"In a world of flattening oil and gas demand, we believe it is imperative that
we refresh the global oil supply with low emission barrels rather than
prolonging the life of tired reservoirs with high emissions.

 

"Those who call for no new oil are calling for higher emissions, fewer jobs
for UK workers, energy insecurity and seek to hammer ordinary folk with higher
energy prices."

 

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
                                   +44 207 220 1666

 WH Ireland Limited

 Katy Mitchell/Andrew de Andrade

 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 non-binding heads of terms with a North Sea
Operator which details the terms under which the Operator will farm-in to the
Pilot development project. If this deal was to complete Orcadian would have an
18.75% stake in the Pilot development with all pre-first oil development costs
paid by the North Sea Operator (see announcement dated 18 September 2023 for
more details).

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.

 1  (#_ftnref1)
www.gov.uk/government/news/new-opportunities-for-north-sea-oil-and-gas
(http://www.gov.uk/government/news/new-opportunities-for-north-sea-oil-and-gas)

 

 2  (#_ftnref2)
www.nstauthority.co.uk/news-publications/27-licences-offered-in-first-batch-of-33rd-oil-and-gas-licensing-round/
(http://www.nstauthority.co.uk/news-publications/27-licences-offered-in-first-batch-of-33rd-oil-and-gas-licensing-round/)

 

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