(Alliance News) - Orcadian Energy PLC on Monday said its licence P2320 expired after the North Sea Transition Authority declined its request to extend Phase A of the licence.
Shares in Orcadian were down 25% at 4.66 pence each in London on Monday afternoon.
The North Sea-focused oil and gas development company said the potential disposals of interests in sub-areas of the licence to Rapid Oil Production Ltd and Carrick Resources Ltd will no longer proceed as a result.
In August last year, Orcadian had signed a formal agreement with Carrick over a sub-area of licence P2320, which contains the Carra prospect. Under the deal, Orcadian assigned a 50% interest in the sub-area to Carrick. In January this year, Orcadian agreed to dispose of its interests in the Crinan and Dandy discoveries in the UK central North Sea to Rapid Oil.
The P2320 licence area contains the Blakeney, Feugh, Dandy and Crinan oil fields and contributed to the managment of excess gas production
Orcadian said it is now in farm-out discussions with "multiple counterparties" regarding drilling an exploration well within the former P2320 licence area, with some agreeing to a non-compete arrangement with Orcadian. This would mean any reapplication for a licence across the same area by the companies would be done in partnership with Orcadian. The company expects the process to take up to six months.
Chief Executive Officer Steve Brown said: "Whilst we obviously would have preferred that NSTA had extended Phase A of P2320, we are pleased to have progressed discussions on the prospects we had identified in the area with multiple potential partners, who have been willing to agree non-compete arrangements with us."
By Sabrina Penty; Alliance News reporter
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Orcadian Engy (ORCA)