REG - Orcadian Energy PLC - Pilot Technical Resource Upgrade

Orcadian EnergyAnnouncement

10/01/2023 07:00

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RNS Number : 1578M  Orcadian Energy PLC  10 January 2023

 

 

 

10 January 2023

Orcadian Energy plc

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

 

Pilot Technical Resource Upgrade

 

Highlights

·    Management has completed an update of their estimate of technically
recoverable resources for the Pilot field

·    Technically recoverable resources have increased 18% to 97 MMbbl for
a P50 case based upon a polymer flood development scheme

·  Comprehensive geophysical interpretation and geological and dynamic
reservoir modelling work completed with support from Axis and TRACS

·    Upside resource estimate for Pilot alone is now 131 MMbbl.

Summary

Orcadian's estimate of Pilot field resources was audited in a CPR by Sproule
in  2021 and was included in the Company's  Admission Document. Sproule
assigned 78.8 MMbbl of 2P reserves to the project, 1P reserves were 58.5 MMbbl
and 3P reserves were 110.5 MMbbl.

Since listing Orcadian has licensed and, with support from Axis, interpreted
newly reprocessed seismic data over Pilot, which resulted in an uplift to the
developed area oil-in-place. TRACS  then constructed a range of geological
realisations and the Orcadian team ran multiple dynamic reservoir simulations
to establish a new range of technically recoverable resources.

The multiple geological models were designed to incorporate the full range of
heterogeneity that we see as possible across the Pilot field, and the new
full-field reservoir models were then calibrated to the results of our polymer
core flood experimental results. These models have been tested with a range of
possibilities for multiple parameters and from that work the team have derived
a statistical range of developed area recovery factors which is highly
consistent with the range of recovery factors adopted by Sproule in the CPR.
This convergence provides great confidence in the latest range of resource
estimates as the estimates of recovery factor have been arrived at from two
entirely different routes: a stochastic reservoir simulation approach
(Orcadian management) and by comparison with analogue fields (Sproule).

 

The table below outlines the Management updated estimate of technically
recoverable resources for the Pilot field:

 Technically recoverable resources (i.e. before an economic cut-off) MMbbl  Sproule CPR  Orcadian management estimates  Uplift

Table 2
 Proven or P90                                                              61.5         65.3                           6.2%
 Proven plus probable or P50                                                82.0         97.1                           18.4%
 Proven, probable plus possible or P10                                      112.8        131.0                          16.1%

These new estimates incorporate the impact of optimised polymer dosages and
can be directly compared with the technical recoverable resources noted in
Table 2 of the Sproule CPR (see page 159 of the Company's Admission Document,
available on the Company's website).

For clarity, these are management estimates, represent gross production from
the field, and have not been audited by Orcadian's Competent Person. This
resource update is SPE PRMS 2018 system compliant. The figures quoted are
technically recoverable resources before the application of an economic
cut-off which is required for the classification of these resources as
reserves.

Steve Brown, Orcadian's CEO, commented:

"We are very pleased with the results of this updated resource estimate. This
is the culmination of eighteen months of work, which started with the
interpretation of the newly reprocessed seismic from TGS. Since then, working
with TRACS, we have constructed multiple geological realisations and tested
our development plan taking into account both downside scenarios as well as
the exciting upside possibilities.

"A thorough understanding of the reservoir and how it will perform is the
foundation of any sound development plan. We are confident that this work has
not only given us that understanding, but will also provide an excellent basis
for potential farm-in partners to evaluate the Pilot development in the coming
months."

 

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 Petroleum Exploration 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 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)
 Charlesbye (PR)                                      + 44 7403 050525
 Lee Cain / Lucia Hodgson

 

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 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 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.

 

 

Glossary

 1P        Proven reserves
 2P        Proven plus probable reserves
 3P        Proven, probable and possible reserves
 bbls/day  Barrels per day
 2C        Mid case estimate of contingent resources
 CPR       Competent Person's Report
 FPSO      Floating Production, Storage and Offloading vessel
 MMbbl     Million barrels
 P10       10% probability of being exceeded, determined using probabilistic methods
 P50       50% probability of being exceeded, determined using probabilistic methods
 P90       90% probability of being exceeded, determined using probabilistic methods
 PRMS      Petroleum Resources Management System
 SPE       Society of Petroleum Engineers
 UKCS      United Kingdom Continental Shelf

 

 

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