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:
- assignment of an interest in P2244 to the Proposed Operator; and
- 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
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||[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 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.