15 November 2022
Orcadian Energy plc
(“Orcadian Energy”, “Orcadian” or the “Company”)
Pilot Licence Extension
Orcadian Energy (AIM: ORCA), the low-emissions North Sea oil and gas development company, is delighted to announce the North Sea Transition Authority (NSTA) has granted Orcadian a one-year extension to licence P2244, which contains the Pilot field.
The Second Term of licence P2244 was due to expire at the end of November this year but will now expire at the end of November 2023. During 2023 Orcadian will be working towards a potential development decision on the Pilot field, which has audited proven and probable reserves of 79 million barrels (MMbbl) (see Company’s Admission Document). This extension to the licence will enable the Company to continue to progress this work.
The Directors believe that development of the Pilot field is an essential aspect of a “Secure Transition” to net zero for the UK and, due to the development concept that the Company has adopted, we expect the Pilot field to be amongst the lowest carbon emitting oil production facilities in the world. The selected development concept for Pilot is expected to produce just 2.6 kgCO2e/bbl of carbon-equivalent emissions. That is approximately a tenth of the emissions intensity of North Sea production in 2021. By developing Pilot, the emissions associated with the UK’s consumption of oil and gas will be significantly reduced. The Pilot development should achieve this exceptionally high environmental standard because of the pioneering techniques proposed by Orcadian, combined with the rigorous process the regulator imposes upon the industry, here in the United Kingdom.
See this link for an internally produced chart, using data sourced from the NSTA, comparing forecasted Pilot emissions to those from currently producing oil and gas platforms in the CNS, NNS and West of Shetland during 2021: https://bit.ly/Pilot_emissions
Steve Brown, Orcadian’s CEO, said:
“ We see extending the licence as a real vote of confidence from the NSTA in the North Sea. We look forward to progressing the Pilot project during 2023, and we believe that when production commences at Pilot it will contribute greatly to the UK’s energy security.
“We believe the UK North Sea is blazing a trail for the global oil and gas industry. It is time to ‘Back British Energy’ and we are confident that the Pilot development has the potential to be a flagship project demonstrating how to reduce global emissions and making a contribution to the transition to net zero.
“We would like to thank the regulator, and everyone working there, for their continued support for this project.”
For further information on the Company please visit the Company’s website: https://orcadian.energy
|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
Toby Gibbs (Advisory)
|+ 44 20 7920 3150
|+ 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 an 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.