TIDMORCA
RNS Number : 8484H
Orcadian Energy PLC
29 November 2022
29 November 2022
Orcadian Energy plc
("Orcadian Energy", "Orcadian" or the "Company")
Memorandum of Understanding with SLB
Highlights
-- Orcadian has entered into a binding Memorandum of
Understanding (MoU) with SLB (formerly Schlumberger) to deliver
core services for the wells on the Company's Pilot project.
-- SLB made a compelling commercial and technical proposal with
a strong focus on decarbonisation.
-- The parties now plan to develop a comprehensive Project
Agreement for provision of the services.
Steve Brown, Orcadian's CEO, commented:
"We are delighted to be working with SLB to deliver the Pilot
wells. Pilot is currently planned to be developed with thirty-four
wells; and delivering those wells for the least cost with the right
completion technologies to maximise sweep of the reservoir is
critical to the success of the Pilot development.
"Pilot is a key UKCS development project which should pave the
way for the industry to unlock up to 3 billion barrels of viscous
oil discoveries on the UKCS. By adopting leading technologies, such
as polymer flooding and floating wind power, we believe we can
deliver these developments with ultra-low emissions that will
restore the UKCS to its rightful place as the leading energy basin
in the world as we deliver a Secure Transition.
"The early involvement of key supply chain partners such as SLB
and Petrofac is essential to ensure that we access the very best
technologies and capabilities that the industry has to offer
enabling us to successfully deliver the Pilot project."
Rob Fox, SLB's MD for UK & Europe, said:
"SLB is committed to supporting Orcadian Energy in securing
accessible and sustainable energy to meet growing energy demand in
the UKCS via the Pilot project. We are excited to have the
opportunity to work with Orcadian and believe our vast portfolio of
energy transition technologies will assist in delivering a highly
innovative and decarbonised development project at Pilot.
"Aligned with SLB's new focus on delivering energy solutions at
the lowest possible emissions footprint, we believe this
prospective project is a tremendous example of how any new North
Sea field should be delivered. We look forward to helping Orcadian
Energy unlock the value of this superb project."
Background
Orcadian and Petrofac, Orcadian's selected well operator,
approached the well services market in July this year to elicit
proposals from well service contractors to support the Pilot field
well construction programme. SLB made an especially compelling
commercial and technical proposal with a strong focus on
decarbonisation. This will ensure alignment of interests between
Orcadian and SLB, and provide a strong foundation for the overall
project financing and development.
In oil and gas development, we believe nothing matters quite as
much as the well-reservoir interface and the well completion
itself. Partnering with SLB, which is a global technology company
that drives energy innovation and has a wide range of capabilities
and technologies, should ensure the successful delivery of the
Pilot project.
Petrofac has supported Orcadian since 2018, having assisted the
Company in the concept select process, and will be appointed as
well operator by Orcadian.
Project Agreement
Orcadian and SLB now plan to develop a comprehensive Project
Agreement to detail the terms and conditions for the provision of
core services. The finalisation of the Project Agreement is subject
to, amongst other items due diligence and drafting of legal
documents, so it is possible that the Project Agreement may not be
executed, but the Directors have every expectation that it will
be.
In the near term, the Company and SLB also intend to progress a
project value optimisation process, SLB will be engaged under a
separate consulting arrangement. The intention of this process is
to deliver a plan for the drilling and completion of the Pilot
wells which will maximise economic recovery and minimise emissions
from both the well construction process and the operation of the
downhole pumps on the wells. The Directors believe that having
access to the full range of technologies which SLB has to offer
will help immeasurably in the process of finalising the Field
Development Plan.
The Company also intends to include an incentive arrangement for
the contracting partners focussed on delivering the optimum number
of wells to maximise efficient sweep of the reservoir, at the least
cost, and with the lowest emissions possible.
Additional Commitments
In recognition of the fact that SLB is committing significant
resources to the finalising of the Project Agreement, Orcadian has
undertaken not to award contracts for the core services to third
parties. Furthermore, if Orcadian elects to transfer the
operatorship of Licence 2244 to a new operator, it is required to
notify SLB and to novate Orcadian's rights and obligations under
this MOU to the new operator.
Investor Meet Company Thursday 1st December
Orcadian Energy would like to invite all interested investors to
attend a Company presentation hosted by Investor Meet Company at
11am GMT on Thursday 1(st) December 2022. After the presentations
there will be a short Q&A session, however participants are
asked to provide questions via the "Investor Meet" platform no
later than 9am on Wednesday the 30(th) November.
Interested parties should register for the event via the
following link:
https://www.investormeetcompany.com/orcadian-energy-plc/register-investor
Investors who already follow Orcadian Energy on the Investor
Meet Company platform will automatically be invited.
Presentation materials will also be uploaded to the Company
website www.orcadian.energy after the event.
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 (Advisory)
Tavistock (PR) + 44 20 7920 3150
Nick Elwes / Simon Hudson orcadian@tavistock.co.uk
Charlesbye (PR) + 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 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.
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END
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