Orcadian announces that following extensive discussions with the North Sea Transition Authority (“NSTA”) that the NSTA has declined Orcadian’s request to extend Phase A of Licence P2320. As a consequence the Licence expired on 14 May 2023. In addition, the potential disposals of interests in sub-areas of the licence to Rapid Oil and Carrick Resources will not now proceed.

Orcadian has been in farm-out discussions with multiple counterparties regarding the drilling of an exploration well within the former P2320 licence area. A number of those companies have agreed non-compete arrangements with Orcadian which should ensure that any reapplication for a licence over the same area, by any of those companies, would be made in partnership with Orcadian.

The P2320 licence contained the Blakeney discovery which had 2C Resources of 25 MMbbl and which represented only about 0.5% of the combined Pilot, Elke, Narwhal and Blakeney development project NPV evaluated in the Competent Person’s Report, assuming a $60/bbl oil price. The Licence also contained the Feugh, Dandy and Crinan discoveries, and the Bowhead and Carra prospects.

Orcadian intends to make an out-of-round application for a new licence covering the extensions of the Pilot field into the P2320 area, the Blakeney and Feugh discoveries, and the prospects identified using the TGS seismic data and Quantitative Interpretation products. Further updates on this will be provided in due course, but it is anticipated that this process could take up to six months.

Licence P2244 (the Pilot field) remains the Company’s key asset and key focus; and the Company’s  interest in this licence is unaffected by the NSTA decision on Licence P2320.

As previously announced to the market, the Company needs to raise new funds in the short term for working capital and to repay the loan facility with Shell of c. £1m. However, the Company has initiated a series of cost cutting measures and is continuing positive discussions with potential investors in the Company.

Steve Brown, Orcadian’s CEO, commented:
“Whilst we obviously would have preferred that NSTA had extended Phase A of P2320, we are pleased to have progressed discussions on the prospects we had identified in the area with multiple potential partners, who have been willing to agree non-compete arrangements with us. We are determined to catalyse the drilling of the prospects we have identified and to deliver on our Central Obligation to Maximise Economic Recovery from the UKCS whilst continuing to minimise the potential emissions from any future development.”

KeyFacts Energy: Orcadian Energy UK country profile