REG - Orcadian Energy PLC - Concept Select Study for the Pilot Field

Orcadian EnergyAnnouncement

01/12/2021 07:00

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RNS Number : 1023U  Orcadian Energy PLC  01 December 2021

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 (MAR). Upon the publication of this announcement via
Regulatory Information Service (RIS), this inside information is now
considered to be in the public domain.

 

 

 

 

1 December 2021

 

Orcadian Energy plc

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

 

Concept Select Study for the Pilot Field

 

Orcadian Energy (AIM: ORCA), the North Sea focused oil and gas development
company, is delighted to announce that it has received a "Letter of no
objection" from the Oil and Gas Authority ("OGA") in respect of the
development concept for the Pilot field.  This letter signals the
finalisation of the "Assessment phase" and the entry into the "Authorisation
phase" of development planning for the Pilot Field.

The letter acknowledges receipt of the Concept Select Report and subsequent
Addendum (the "Concept Select Documents"), which were submitted in accordance
with the OGA's Requirements for the planning of, and consent to, UKCS field
developments guidance:

https://www.ogauthority.co.uk/media/7803/fdp_guidance_111021.pdf
(https://www.ogauthority.co.uk/media/7803/fdp_guidance_111021.pdf) .

The development concept for the Pilot field is based upon the use of polymer
flooding to maximise economic recovery, implemented using an FPSO, two
wellhead platforms and over thirty production and injection wells. Energy
requirements for the development are to be largely supplied by a floating wind
turbine unit supplemented by associated gas. This is as detailed in the
Company's Admission Document, and as amended by the submission of the CSR
Addendum in July 2021, described in the announcement dated 15 July 2021.

The letter states that, based on the information provided to date and the
OGA's current understanding of that information, the OGA has no objection to
Orcadian preparing a Field Development Plan (FDP) for the Pilot Field as
described in the Concept Select Documents.

The facilities concept delivers a well optimised process heat management
scheme and includes a local wind power system, with highly efficient backup
gas engines, to significantly reduce emissions. Scope 1 and Scope 2 emissions
over the life of field have been estimated, by the Company's client engineers
Crondall Energy, to be 2.6 kgCO2e per barrel, about an eighth of the North Sea
average emissions in 2020: 20.0 kgCO2e/boe, and less than half of the lowest
emitting oil facility currently operating on the UKCS:

https://www.ogauthority.co.uk/the-move-to-net-zero/net-zero-benchmarking-and-analysis/carbon-emissions-intensity-analysis/
(https://www.ogauthority.co.uk/the-move-to-net-zero/net-zero-benchmarking-and-analysis/carbon-emissions-intensity-analysis/)

 

The Company is preparing a plan to advance the FDP and progress the project
through the Authorisation phase, with a particular focus on securing a
contract for the provision of a FPSO (a floating production, storage and
offloading vessel). As already announced the Company has engaged Crondall to
assist with this and a short list of three providers have been identified (see
announcement dated 28 October 2021). The Directors believe this vessel
selection to be a crucial step in the process of finalising the basis of
design for the rest of the development at Pilot and the commercial terms
offered by the contractors will fundamentally define the capital requirements
of the project. Further updates will be provided as appropriate.

 

Steve Brown, Orcadian's CEO, said:

"The letter of no objection for the concept select study from the OGA is a
really important step in the progress towards the development of the Pilot
Field.

"This is also particularly pleasing for us given the extensive work that the
team have done to address the net zero aspects of the development.  We
believe the plan that we have developed, once executed, will ensure that the
Pilot Field emissions will lie in the lowest 5% of global oil production, an
incredible achievement and one in keeping with the drive to net zero whilst
continuing to ensure energy security in the UK.

"We look forward to continuing to work with the OGA and our other partners in
taking this development forward."

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

Contact:

 

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

 Alan Hume, CFO
 WH Ireland (Nomad and Joint Broker)                 +44 20 7220 1666
 Harry Ansell / Fraser Marshall (Corporate Broking)

 Katy Mitchell /  Andrew de Andrade (Nomad)
 Shore Capital (Joint Broker)                        +44 20 7408 4090
 Jerry Keen (Corporate Broking)

 Toby Gibbs / James O'Neill (Advisory)
 Tavistock (PR)                                      + 44 20 7920 3150
 Nick Elwes / Simon Hudson / Matthew Taylor          orcadian@tavistock.co.uk

 

 

About Orcadian Energy

Orcadian is a North Sea oil and gas operator with a difference. 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 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 deliver reliable organic energy.

Orcadian Energy (CNS) Ltd ("CNS"), Orcadian's operating subsidiary, was
founded in 2014 and is the sole licensee of P2244, which contains 78.8 MMbbl
of 2P Reserves in the Pilot discovery, and of P2320 and P2482, which contain a
further 77.8 MMbbl of 2C Contingent Resources in the Elke, Narwhal and
Blakeney discoveries (as audited by Sproule, see the CPR in the Company's
Admission Document for more details). Within these licences there are also 191
MMbbl of unrisked Prospective Resources. These licences are in blocks 21/27,
21/28, 28/2 and 28/3, and lie 150 kms due East of Aberdeen.  The Company also
has a 50% working interest in P2516, which contains the Fynn discoveries.
P2516 is administered by the Parkmead Group and covers blocks 14/20g and
15/16g, which lie midway between the Piper and Claymore fields, 180 kms due
East of Wick.

Pilot, which is the largest oilfield in Orcadian's portfolio was discovered by
Fina 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 development
plan for Pilot is based upon a Floating Production Storage and Offloading
vessel, with over thirty wells to be drilled by a Jack-up rig through a pair
of well head platforms and will include a floating wind turbine to provide
much of the energy used in the production process. Emissions per barrel
produced are expected to be about an eighth of the 2020 North Sea average and
to lie in the lowest 5% of global oil production.

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