TIDMORCA
RNS Number : 8882O
Orcadian Energy PLC
15 June 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the
publication of this announcement via Regulatory Information Service
(RIS), this inside information is now considered to be in the
public domain.
15 June 2022
Orcadian Energy plc
("Orcadian Energy", "Orcadian" or the "Company")
Seismic acquisition and licensing agreement
Orcadian Energy (AIM:ORCA), the low-emissions North Sea oil and
gas development company, is pleased to announce a seismic licensing
deal with the energy data company TGS. The agreement will provide
Orcadian with high quality seismic data, revealing the reservoir
structures and even the likely fluid type. The deal with TGS
ensures that Orcadian will be able to use the best data available
to evaluate the multitude of development opportunities and
prospects within its North Sea portfolio.
Highlights
-- Orcadian will gain access to 2,070 sq km of newly reprocessed
and interpreted, high quality 3D seismic data covering the bulk of
its licences and enabling evaluation of nearby open acreage in the
upcoming 33(rd) round;
-- Near term costs have been deferred and future payments to TGS
will largely derive from a 1% royalty on production;
-- TGS will, subject to Pilot FDP approval, acquire 100 sq km of
new seismic over the important Elke and Narwhal discoveries;
-- The North Sea Transistion Authority ("NSTA") has confirmed
that acquisition of this data will satisfy the Phase B work
commitment on P2482, Orcadian has requested that NSTA allows P2482
to continue into Phase B.
Orcadian has 79MMbbls of 2P reserves in the Pilot field,
78MMbbls of 2C Resources in Elke, Narwhal and Blakeney discoveries,
and 191MMbbls of Prospective Resources across its Western Platform
licences. Orcadian's understanding of Pilot and Blakeney has
already been much improved from interpretation of the data already
licensed from TGS. This deal will enable Orcadian to improve its
understanding of the full potential of its licences and the
surrounding areas to the same level, in advance of the forthcoming
33(rd) Licensing Round.
TGS seismic data
TGS owns three surveys over Orcadian's licences on the Western
Platform:
-- the "Blakeney" survey which covers all of blocks 21/22a,
21/26a, 21/27a, and 21/27b. Orcadian has already licensed 205 sq km
to enable interpretation of Pilot, Blakeney, Bowhead, and Feugh.
This survey was shot in 2012 and was reprocessed in 2019/2020 to
benefit from ongoing advances in processing technology as well as
to focus on the Tay hydrocarbon bearing horizons;
-- the "Catcher North" survey covering all of 21/28 which was shot in 20112/13; and
-- the "Catcher" survey covering all of 28/3a which was shot in 2011.
A map of these surveys and their relationship to Orcadian's
acreage holdings can be downloaded at this link:
https://bit.ly/TGS-Orcadian-seismic
Detais of the Transaction
Under the terms of the transaction TGS has agreed:
-- to defer, until Pilot FDP approval, a significant portion of
the seismic licensing fees due under the existing licence
arrangements;
-- to reprocess the "Catcher" and "Catcher North" surveys using
the same processing sequence as successfully deployed on the
"Blakeney" dataset;
-- to licence a further 1,865 sq km of seismic data to Orcadian,
under a two-company group licence;
-- subject to Pilot FDP approval, to acquire at least 100 sq km
of new seismic over Narwhal and Elke; and
-- to deliver QI (Quantative Interpretation) products, to carry
out seismic modelling and interpret the seismic over the entire
area.
In return, Orcadian will grant TGS a 1% royalty on proceeds from
future production from its Western Platform licences. On Pilot FDP
approval, and concurrent with TGS's commitment to acquire seismic
over Elke and Narwhal, Orcadian will pay the outstanding prior
financial commitment to TGS. The royalty terms are designed to
afford Orcadian maximum flexibility in future fund-raising to
stimulate development of this key future hub for UK energy.
The Directors believe this innovative licensing arrangement will
enable Orcadian to meet future licence commitments, enhance its
understanding of the regional geological setting, and to quantify
prospectivity across the entire Western Platform project area; and
to do so using the very best available data, reprocessed using the
most appropriate parameters to image the Tay reservoirs. This
arrangement is intended to create a long-term alignment of
interests as well as a close technical working relationship between
Orcadian and TGS.
Phase B of P2482
NSTA has agreed to amend the Phase B work programme for Licence
P2484, such that new seismic acquired by TGS and licenced by
Orcadian under this arrangement will satisfy the amended work
commitment. Accordingly, Orcadian has formally requested that P2484
continue into Phase B.
Farm Out of Carra
As announced on 11 October 2021, Orcadian has entered into
non-binding heads of agreement with Carrick Resources Limited on
the announced farm-out of the Carra prospect. Orcadian confirms it
is working with Carrick to progress the farm out agreement and
further updates will be available in due course.
Steve Brown, Orcadian's CEO, said:
"We are delighted to have reached this agreement with TGS and
look forward to further cementing our close working
relationship.
The agreement enables us to use the very best subsurface data
whilst giving us access to recent advances in seismic processing to
extract understanding from that data. A good subsurface
understanding is the foundation upon which we will build our
success and securing access to the best data available is
essential. We are delighted that TGS have the confidence in our
project to enter into this deal under which the vast majority of
their return will depend on us successfully taking the project into
production. We now have licensed, what we believe is the highest
quality data across all of our Western Platform licences, whilst
minimising value dilution to our shareholders. This deal ensures a
long term alignment between TGS and Orcadian as we seek to make the
most of the development and exploration potential of our
acreage."
For further information on the Company please visit the
Company's website: 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)
Shore Capital (Joint Broker) +44 20 7408 4090
Toby Gibbs / Liam Zabludowicz (Advisory)
Tavistock (PR) + 44 20 7920 3150
Nick Elwes / Simon Hudson orcadian@tavistock.co.uk
Charlesbye (PR) + 44 7403 050525
Lee Cain / Lucia Hodgson
Notes to editors
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 eighth
of the 2020 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.
About TGS
TGS provides scientific data and intelligence to companies
active in the energy sector. In addition to a global, extensive and
diverse energy data library, TGS offers specialized services such
as advanced processing and analytics alongside cloud-based data
applications and solutions.
About Carrick Resources Limited
Carrick recently completed the sale of its 50% operated interest
in the adjacent Block 21/28b (Licence P2451) containing the Fyne
Field.
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