Orcadian Energy plc has completed the sale of 50% of the ordinary shares of HALO Offshore UK Ltd to power plant developer and operator Independent Power Corporation plc.
FUNDING
IPC founder-chief executive officer Peter Earl and Mark Preece have joined Orcadian’s CEO Steve Brown and chief financial officer Alan Hume on HALO’s board.
Mr Preece is a director of Oil Gas & Marine Ltd which is expected to own 50% of Orcadian’s southern North Sea licence P2680 containing the Earlham gas discovery, the Clover prospect and the decommissioned Orwell field.
Orcadian and IPC aim to acquire production opportunities for HALO on “low-emissions, non-operated, gas producing licences”.
Orcadian said that since 2013 HALO had incurred around £50 million of pre-trading capital expenditure.
On the start of a ring-fence trade, the company expects the figure to generate tax allowances of some £115m when the ring fence expenditure supplement is applied.
IPC has also agreed to loan HALO up to £539,000 for HALO to evaluate and negotiate gas producing licence interests.
Orcadian added it had pledged its share of HALO as security for its 50% share of the loan.
IPC has also agreed to provide or procure non-dilutive funding of at least £5m and further “funding lines” to finance acquisitions.
HALO was previously known under various names, most recently as Third Energy Offshore Ltd until 2018.
Orcadian’s flagship project is the Pilot heavy oil development located in the UK central North Sea.