Orcadian Energy has completed a further share issue, raising funds to progress a proposed farm-out deal and pay off debts.
In a stock market announcement on Monday Orcadian (AIM:ORCA) said it had raised £350,000 through the issue of 2.9 million new ordinary shares at a price of £0.12 each.
This represents a discount of approximately 14% to the closing mid-price of an ordinary share in the company on 29 September 2023, it noted.
It follows news last month that the company had entered a provisional agreement with an operator on a potential farm-in to its £1bn Pilot project in the North Sea.
The unnamed operator has been granted exclusivity until November 30 to complete the deal.
Under the agreement, the new firm would take control of the Pilot project- a 97 million-barrel project in the Central North Sea – with an 81.25% stake.
The partner would pay 100% of the pre-first oil scope, with Orcadian then paying its working interest share of expenditure (18.75%).
Commenting, CEO Steve Brown said: “We are delighted to welcome our new investors on board. Though more funding was made available to the company from other groups, we are continuing to minimise company overheads whilst seeking to add value per share.”
“We look forward to providing updates on the proposed farm-in to the Pilot Project and the outcome of our applications in the 33rd Offshore Licensing Round.”
Orcadian has made three licence applications as part of the Licensing Round – two in partnership with other companies and one on its own.
One application refers would cover a “viscous oil” prospect, whilst the other two applications are focused on gas opportunities, including a potential “gas-to-wire project” on an appraised discovery, with integrated carbon capture, which could deliver baseload electricity with minimal emissions, te company reported.
It said that assessments suggest P50 sales gas resources across the two gas prospects could amount to 114 billion cubic feet in a discovery, 153 bcf in a near drill-ready prospect and 377 bcf in “leads and less mature prospects.”
An update on these application are expected some time Q4 2023
Orcadian said further funds would be required in the near term to continue to progress its activities and that it would provide further updates “in due course.”
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