Orcadian Energy has announced the North Sea Transition Authority (NSTA) is prepared to grant a two-year extension on its P2244 licence in the Pilot field, subject to certain conditions.
The extension would change the expiry date of the Second Term of P2244 from November 30, 2023 to November 30, 2025.
Orcadian announced on September 18 this year it had entered into a non-binding heads of agreement with an unnamed North Sea operator on a potential farm-in to its £1bn Pilot project.
Under the agreement, the new firm would take control of the Pilot project- a 97 million-barrel project in the Central North Sea – with an 81.25% stake.
The company would pay 100% of the pre-first oil scope, with Orcadian then paying its working interest share of expenditure (18.75%).
It comes after Orcadian previously estimated the cost to first oil being around £1bn, with some scope for reductions.
On completion of the deal, extension over P2244 and award of licence P2320, Orcadian would receive cash of up to $200,000 from the operator, with a further $3m upon Pilot FDP approval.
The NSTA granted the extension on the condition that Orcadian submit an application before November 30, 2023, for assignment of an interest in P2244 to the Proposed Operator; and for the appointment of the Proposed Operator as operator of P2244.
If NSTA consents are granted, the assignment of the interest in P2244 to the Proposed Operator must be completed by 31 March 2024.
Orcadian chief executive officer 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.”
Orcadian was awarded the P2244 licence in 2014 in the 28th licensing round, containing the Pilot Main, Pilot South and Harbour discoveries.