REG - Orcadian Energy PLC - Two Year Pilot Licence Extension

Orcadian EnergyAnnouncement

25/10/2023 07:00

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RNS Number : 1682R  Orcadian Energy PLC  25 October 2023

 

 

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(EU) NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

25 October 2023

Orcadian Energy plc

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

 

Two Year Pilot Licence Extension

 

Orcadian is pleased to announce that the North Sea Transition Authority (NSTA)
has confirmed to the Company that, on the basis of the work that Orcadian and
the Proposed Operator intend to undertake on Seaward Production Licence P2244
("P2244"), NSTA is prepared to agree an extension to the Second Term of
Licence P2244, subject to certain conditions detailed below (the "Extension").

The Extension would change the expiry date of the Second Term of P2244 from 30
November 2023 to 30 November 2025.

As announced on 18 September 2023, Orcadian entered into a non-binding heads
of agreement with a North Sea operator (the "Proposed Operator"), which
provided a period of exclusivity to undertake due diligence on P2244, and
execute definitive documentation for a farm out, by 30 November 2023. The work
programme included in the P2244 extension request, submitted by Orcadian, was
prepared jointly with the Proposed Operator and the preparation of
documentation is proceeding to plan.

The Extension is conditional on the following:

·    Orcadian's submission, before 30 November 2023, of an application for
NSTA consent to:

o  assignment of an interest in P2244 to the Proposed Operator; and

o  appointment of the Proposed Operator as operator of P2244.

·    If NSTA consents are granted, the assignment of the interest in P2244
to the Proposed Operator must be completed by 31 March 2024.

At this stage there can be no guarantee that the final agreements will be
entered into, or that the farm out will complete but the Directors are
progressing on the basis that the agreements will be concluded and that the
necessary consents will be forthcoming. Completion of the transaction would be
subject to shareholder approval, pursuant to Rule 15 of the AIM Rules for
Companies, and the consent of Shell and TGS to the assignment.

NSTA have advised Orcadian that should the above conditions not be met, then
P2244 would automatically cease and determine 30 days thereafter.

Steve Brown, Orcadian's CEO, said:

 

"We are delighted that the NSTA provided such a prompt response to our licence
extension request, and we are working diligently on the necessary
documentation so that we can progress this deal as quickly as possible."

 

 

 

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 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. 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 the North Sea Operator.

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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