Orcadian granted conditional further two years for Pilot

Orcadian Energy plc has been granted a conditional two-year extension to the second term of production licence P2244 containing the Pilot oil field.

FARM-OUT

Based on Orcadian’s and the proposed operator’s intended work, the North Sea Transition Authority will change the licence’s expiry date from 30 November 2023 to 30 November 2025.

The company last month signed a non-binding agreement with an unnamed North Sea operator to undertake due diligence for a farm-out by the end of November.

The work programme included in Orcadian’s request to extend P2244, was prepared with the proposed operator while preparation of documentation continues.

NSTA’s conditions include that Orcadian must before 30 November 2023 submit an application to assign an interest in P2244 to the proposed operator and to appoint the operator.

Following approval, assignment of the interest in P2244 to the proposed operator must complete by 31 March 2024.

The transaction is also subject to shareholder support and approval to the assignment of Shell, which is owed £1 million, and energy data company TGS with which Orcadian has a seismic licensing deal.

Should Orcadian fail to meet the conditions, P2244 would automatically cease.

Chief executive Steve Brown said: “We are delighted that the NSTA provided such a prompt response to our licence extension request, and we are working diligently on the necessary documentation so that we can progress this deal as quickly as possible.”