REG - Orcadian Energy PLC - Determination of Licence P2320

Orcadian EnergyAnnouncement

15/05/2023 07:00

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RNS Number : 3423Z  Orcadian Energy PLC  15 May 2023

 

 

 

15 May 2023

Orcadian Energy plc

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

 

Determination of Licence P2320

 

Orcadian announces that following extensive discussions with the North Sea
Transition Authority ("NSTA") that the NSTA has declined Orcadian's request to
extend Phase A of Licence P2320 (the "Licence" or "P2320"). As a consequence
the Licence determined (expired) on 14 May 2023. In addition, the potential
disposals of interests in sub-areas of the licence to Rapid Oil (see
announcement dated 11 January 2023) and Carrick Resources (see announcement
dated 3 August 2022) will not now proceed.

Orcadian has been in farm-out discussions with multiple counterparties
regarding the drilling of an exploration well within the former P2320 licence
area. A number of those companies have agreed non-compete arrangements with
Orcadian which should ensure that any reapplication for a licence over the
same area, by any of those companies, would be made in partnership with
Orcadian.

The P2320 licence contained the Blakeney discovery which had 2C Resources of
25 MMbbl and which represented only about 0.5% of the combined Pilot, Elke,
Narwhal and Blakeney development project NPV evaluated in the Competent
Person's Report (set out in the Company's Admission Document), assuming a
$60/bbl oil price. The Licence also contained the Feugh, Dandy and Crinan
discoveries, and the Bowhead and Carra prospects.

Orcadian intends to make an out-of-round application for a new licence
covering the extensions of the Pilot field into the P2320 area, the Blakeney
and Feugh discoveries, and the prospects identified using the TGS seismic data
and Quantitative Interpretation products. Further updates on this will be
provided in due course, but it is anticipated that this process could take up
to six months.

Licence P2244 (the Pilot field) remains the Company's key asset and key focus;
and the Company's  interest in this licence is unaffected by the NSTA
decision on Licence P2320.

As previously announced to the market, the Company needs to raise new funds in
the short term for working capital and to repay the loan facility with Shell
of c. £1m. However, the Company has initiated a series of cost cutting
measures and is continuing positive discussions with potential investors in
the Company. Further updates will be provided in due course.

Steve Brown, Orcadian's CEO, commented:

"Whilst we obviously would have preferred that NSTA had extended Phase A of
P2320, we are pleased to have progressed discussions on the prospects we had
identified in the area with multiple potential partners, who have been willing
to agree non-compete arrangements with us. We are determined to catalyse the
drilling of the prospects we have identified and to deliver on our Central
Obligation to Maximise Economic Recovery from the UKCS whilst continuing to
minimise the potential emissions from any future development."

 

 

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
 WH Ireland (Nomad and Joint 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 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 P2482, which contain a further
52.7 MMbbl of 2C Contingent Resources in the Elke and Narwhal discoveries (as
audited by Sproule, see the CPR in the Company's Admission Document for more
details). Within these licences there are also 119 MMbbl of unrisked
Prospective Resources. These licences are in blocks 21/27a, 28/2a and 28/3a,
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 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 through a pair of well head platforms and provision of power from
a floating wind turbine.

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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