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magazineShares in Orcadian Energy pick up speed as they gain more than 200% in two weeks
North Sea oil and gas minnow Orcadian Energy (ORCA:AIM) has seen its share price increase more than four-fold to 14.5p since mid-September.
The big driver is a proposed farm-out deal on its Pilot project in the central North Sea (18 September). Orcadian has granted exclusivity on a provisional agreement with an unnamed operator until 30 November to allow all the details to be finalised, including licence expansion and extensions.
Assuming the deal goes through, Orcadian would maintain an 18.75% stake in the project with the operator covering all the costs until first oil is produced. This is an endorsement of the development’s potential but also of the North Sea as an oil province after several operators have seen profit (though not cash flow) wiped out as they factor in the impact of windfall taxes.
Orcadian could receive $200,000 if and when the transaction completes and a further $3 million once the field receives development approval. Stakes are high with the business acknowledging it has cash of just £90,000 with a monthly cash
burn rate of a little less than £20,000.
Important information:
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Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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