2 August 2023
Orcadian Energy plc
(“Orcadian Energy”, “Orcadian” or the “Company”)
Orcadian notes the significant rise in the Company’s share price today. The Board confirms that it is not aware of any specific reason for this increase.
The Directors are aware of the positive support given by the UK Government on 31 July 2023 to the future of the oil and gas industry focussed on the UK Continental Shelf. The UK Government has confirmed that it intends to proceed with awards of licences in the 33rd Round. As announced on the 19 January 2023, the Company applied for three licences in the 33rd Round. The Company has completed its NSTA interviews and remains optimistic that licences may be offered in due course, but there can be no guarantee that any licences will be offered to the Company. In addition, the Government’s clear support for further development of oil and gas in the UK is very welcome, and provides a supportive background to the Company’s discussions with potential partners.
The Company’s focus is as documented in the Company’s interim results announcement dated 30 March 2023. The Company is looking to find a farm-in partner or a new owner for Pilot and the Directors intention is to elicit offers during 3Q of 2023 so that a new operator can take the project forward. The Company is continuing discussions with a number of oil and gas operators interested in partnering in the development of Pilot, or acquiring the Pilot Licence, and/or partnering with Orcadian to re-apply for the area covered by the former P2320 licence. As set out in the announcement of 30 March 2023, whilst the Company is considering all options at this stage, any disposal of Licence P2244 and the Pilot project would likely be a fundamental change of business for Orcadian pursuant to Rule 15 of the AIM Rules for Companies. Such a disposal would therefore be conditional on the consent of shareholders; and require both an announcement and the publication of a shareholder circular detailing the potential disposal. However, there can be no guarantee that any transaction will occur. Further updates will be provided as required.
As also previously indicated to the market, the Company needs to raise new finance in the short term for working capital and to repay the loan facility with Shell of c. £1m due for repayment at the end of August 2023. In the meantime, the Company’s working capital remains severely constrained. Cash at the end of July 2023 was £97k. A number of conversations are progressing with potential providers of finance but there can be no guarantee that any financing arrangements will be entered into.
For further information on the Company please visit the Company’s website: https://orcadian.energy
Contact:
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Orcadian Energy plc |
+ 44 20 7920 3150 |
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Steve Brown, CEO Alan Hume, CFO |
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| WH Ireland (Nomad and Joint Broker) | +44 20 7220 1666 |
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Katy Mitchell / Andrew de Andrade (Nomad) Harry Ansell / Fraser Marshall (Corporate Broking)
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| Tavistock (PR) | + 44 20 7920 3150 |
| Nick Elwes / Simon Hudson | [email protected] |
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.
