North Sea operator cheers licence extension, enabling execution of field development plan
Oilfield development company Orcadian Energy has been granted an extension for Phase ‘A’ of licence P2320 – located in the UK North Sea – by the North Sea Transition Authority (NSTA). This bolstered the firm’s hopes of putting into action a development plan for the Pilot field, which it believes will set new standards for curbing emissions.
Orcadian Energy announced an extension to Phase A of licence P2320, which has been extended to 14 May 2023 with the initial term also being moved to 14 November 2024.
Steve Brown, Orcadian’s CEO, commented: “We are delighted to have received this extension from the North Sea Transition Authority (previously known as the OGA), which brings the date by which we are required to commit to drill a well on P2320 into line with our Pilot project FDP approval plans.”
Prior to the extension, Phase A of licence P2320 was due to end on 14 May 2022, however, after extensive discussions with the North Sea Transition Authority, the regulator has agreed to extend Phase ‘A’ of this licence, according to Orcadian.
“The license extension enables us to implement a development plan for Pilot which will set a new standard for low emissions in the North Sea. The Feugh discovery, located on P2320, allows us to efficiently manage excess gas production; and we are grateful to the North Sea Transition Authority for their support, and agreement to our request for an extension to Phase ‘A’ of the P2320 licence,” added Brown.
The company further explains that this licence makes an important contribution to the reduction in emissions from the planned development of the Pilot field. Based on the firm’s statement, its preferred means of managing excess gas during the Pilot production phase is to be able to inject it into the gas cap on the Feugh reservoir, which lies within P2320.
Orcadian claims that the injection eliminates any inessential flaring, meaning that there will always be gas available to power the gas engines, which will provide reserve power capacity when the wind does not blow. In addition, the company elaborates that a reliable backup system is a key to maximising the utility of wind power for offshore operations.
The company further adds that it will need to present to NSTA a fully financed proposal for a well to be drilled to the Tay reservoir to enable the licence P2320 to proceed into Phase C, which is known as the drilling phase. The well could be a Bowhead exploration well, a production/injection well on Feugh, an exploration well on the Carra prospect, or potentially an updip appraisal well on the Pilot channels, which are a contiguous part of the Pilot field not included in the current quoted oil-in-place.
Estimates for Pilot area to get a boost
Meanwhile, Orcadian has also completed its new interpretation of the recently reprocessed seismic data – licensed from TGS in July 2021 – over the Pilot, Feugh, and Blakeney discoveries as well as the Bowhead prospect.
The firm estimates that the development area oil-in-place, for Pilot, will increase by about 10 to 15 per cent compared to the previously estimated and audited volume, which was based on an older seismic survey. The firm’s directors believe that this increase in development area oil-in-place will likely result in an upgrade to recoverable reserves, when the Pilot field reserves are next audited.
Moreover, Orcadian says that the Bowhead prospect remains “a very exciting opportunity” with the P90-P50-P10 range for recoverable oil being revised to 8-44-201 MMbbls while the previously estimated range of prospective resources was 12-43-105 MMbbls, respectively. According to Orcadian, extensive geophysical modelling has shown the seismic response to be consistent with other offset discoveries in the prolific Tay reservoir unit and the firm’s management now estimate the geological chance of success for Bowhead to be 65 per cent instead of the previous 49 per cent.
Orcadian also explains that it is now finalising the terms of the previously announced farm-out of a 50 per cent interest in the Carra prospect – located within a sub-area of licence P2320 – to Carrick Resources.
To remind, the company reached a non-binding agreement with Carrick Resources regarding this farm-out back in October 2021. At the time, the two players were working on the execution of a formal agreement, which was to be completed prior to 31 December 2021.