Orcadian Energy plc has provisionally agreed to a 50% farm-out for $2.2 million of a sub-area of the licence P2680, including the Earlham and Orwell prospects, in the southern North Sea.
DEBT
Purchaser Marine Low Carbon Power Company Ltd, owned by IPCNWE and Richmond Offshore Energy Ltd, will become the operator on regulatory approval of a field development plan.
MLCP plans to develop Earlham and Orwell to supply the first of MLCP’s mobile offshore generating units to supply carbon free energy.
As part of the agreement, IPC will acquire Orcadian’s 2019 debt to Shell International Trading and Shipping Company Ltd, which now stands at US $1.5m, of which $1.4m will fund part of the 50% licence acquisition.
The balance of US $100,000 will be exchanged for an Orcadian loan note, dated 30 June 2026.
The loan will be converted into 312,500 ordinary shares in Orcadian at a conversion price of 25 pence per share.
MLCP will carry Orcadian’s 50% share of expenditure through to first gas on the development of Earlham and Orwell by having an enhanced revenue interest of 80% until the carry is repaid.
The provisional agreement is expected to complete during Q1 2025.
Orcadian said that Earlham had a methane resource of 114 bcf and believes that Orwell could deliver a further 31 bcf.
Chief executive Steve Brown added that Earlham would be MLCP’s first project to integrate gas-to-wire and carbon capture and storage technologies to provide zero carbon balancing power.
“Earlham will be the first gas field on the UKCS to be dedicated to a facility that will capture practically all the emitted carbon dioxide for storage underground.
“Scope 3 emissions will be less than 5% of a conventional gas development which supplies an unabated power station.
“This project is one which we believe supports the Government’s vision of a clean UK power system in 2030 whilst crucially also delivering on the Government’s energy security goals.”
IPCNWE is part of the Independent Power Corporation plc group, the largest developer of consented battery projects in the UK with 5.5 GW of capacity under development.
Orcadian said that MLCP, GE Vernova and Capsol Technologies of Norway had designed a 300 MW offshore power facility, with carbon dioxide capture and distributed carbon dioxide storage offshore, in a reservoir “most likely” within the licence sub-area.