Orcadian Energy plc’s proposed sale and farm-out of interests in sub-areas of licence P2320 have terminated after the industry regulator refused a second extension.
NSTA
The company said that following extensive discussions, the North Sea Transition Authority (NSTA) had refused to extend Phase A of P2320, causing the licence to expire on 14 May 2023.
The decision ends Orcadian’s planned sale of its interests in the Crinan and Dandy discoveries to Rapid Oil Production Ltd and farm-out for the Carra prospect to Carrick Resources.
NSTA granted the first extension in April 2022.
POSSIBLE PARTNERSHIPS
Licence P2320 contained the Blakeney discovery; the combined Pilot, Elke, Narwhal and Blakeney development; the Feugh, Dandy and Crinan discoveries; and the Bowhead and Carra prospects.
The company has held farm-out discussions with “multiple counterparties” on drilling an exploration well, in partnership with Orcadian, within the licence should it make a new application over the same area.
Licence P2244 (Pilot field) which remains the company’s key asset and focus is unaffected by the NSTA’s decision on P2320.
NEW APPLICATION
Orcadian intends to submit 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.
The application process is expected to take up to six months.
Orcadian previously announced it intended to raise new funds in the short term for working capital and to repay the loan facility with Shell of approximately £1 million.
The company has also started a series of cost-cutting measures and continues “positive discussions with potential investors”.
“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,” added chief executive Steve Brown.