Orcadian Energy, a North Sea focused oil-and-gas company, has recently revealed that it has entered into non-binding heads of terms with an undisclosed North Sea operator. The agreement is aimed at exploring a potential farm-out of Orcadian Energy's pilot development project in the Central North Sea.
If the deal is successfully completed under the agreed terms, the operator will acquire an 81.25% interest in the P2244 license and assume the role of operator for the pilot development. This marks a significant step forward for Orcadian Energy's project.
According to a report prepared by Sproule in 2021, the operator stands to gain 63.4 million barrels of net reserves or resources through this transaction. In comparison, Orcadian Energy will retain 14.6 million barrels of proven and probable reserves.
To further enhance the project, both parties will collaborate on an updated field development plan. Orcadian Energy believes that this endeavor will result in a 5% to 10% increase in the field's reserves or resources.
Upon completion of the transaction, as well as the extension of the license and an award over the former P2320 license, Orcadian Energy will receive up to $200,000 in cash consideration. An additional $3 million will be received upon approval of the field development plan.