Orcadian Energy has announced its intention to list on the London Stock Exchange’s Alternative Investment Market (AIM), seeking to raise gross proceeds of around £5m.
The oil and gas development company is seeking admission to support progress towards the commercialisation of its assets in the North Sea.
Its key asset is the 100% interest in the Pilot oilfield, with proven and probable reserves of 78.8 million barrels.
The directors believe that no other company has undertaken an initial public offering (IPO) with more proven and probable reserves since 2006.
Orcadian plans to develop, in phases, the Pilot oilfield and its other key discoveries Elke, Narwhal and Blakeney, using a polymer flood approach.
There is also potential for other prospects within the group’s licence areas to be developed using the same method if future drilling confirms their suitability.
Polymer flooding is a technique for viscous oil assets which has been proven offshore on the Captain field in the Central North Sea by Chevron and Ithaca.
The company expects to pursue, in parallel, potential development farm-out and contractor alliances as options for financing the development of its assets.
It also noted a low emission development plan, which the directors’ believe is in line with the Oil and Gas Authority’s net zero goals, which is projected to deliver an emissions performance which lies in the lowest 5% of the world’s oilfields.
Previous initial funding was received by Orcadian from Shell Trading International Limited in 2019.
Chief executive Steve Brown commented: “Orcadian was founded in 2014 to find the best way to develop the Pilot discovery.
“Since then, we have added to our resource base, but most importantly we have created a technically mature, feasible development plan for Pilot, based upon the injection of polymerised water right from the start of production.
“Admission to AIM will give the company access to some of the capital we need to transform our plans into actionable projects – we look forward to welcoming new investors as we progress this next phase of development of our North Sea oilfields.”
The estimated cost to achieve first production from the Pilot fields is $1bn.
One of the key activities for the company after admission will be to source and secure the finance for the project.
While it plans to will explore all avenues for funding, it is anticipated that the main potential sources of funding will be: vessel leases and deferred payment agreements with contractors; debt; further equity; or the farm-out of an interest in the licences to a well-financed oil and gas company.
The directors anticipate that the final financing package for Pilot will incorporate most, or even all, of the above-mentioned options.
The stock exchange note explained that while the objective is be to retain as large an interest in the Pilot field as possible for the benefit of its shareholders, it will be necessary to share some of the profit from the development with financing partners. “It is possible that such proportion could be substantial,” it added.
Orcadian’s three licences are clustered together, approximately 150km east of Aberdeen in a part of the North Sea known as the Western Platform.
The group was also recently awarded a 50% share in licence P2516, controlled by the Parkmead Group, which lies in the Outer Moray Firth, and which contains the Fynn Beauly and Andrew discoveries.
The new group was formed in April and it acquired Orcadian (CNS) via a share for share exchange in May, in order to facilitate this IPO.
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