Orcadian Energy (CNS) Ltd. announced that it has executed a conditional Sale and Purchase Agreement with Ping Petroleum UK plc, which details the farm-out of the Pilot development project. Orcadian has now requested NSTA approval for the assignment of an 81.25% interest in the P2244 license to Ping, and the appointment of Ping as operator of the P2244 license, as required by the NSTA. The Pilot field is one of the undeveloped discoveries in the Central North Sea, with significant upside potential in the surrounding area.

Following completion, Ping and Orcadian will work to deliver a FDP to the N STA for a polymer flood development of the Pilot field, with industry leading emissions performance. Orcadian management believe this updated development plan could increase ultimate Pilot field recovery by 5-10% relative to the 2021 CPR scenario audited by Sproule. Under the terms of a proposed Joint Operating Agreement ("JOA"), which is a condition of the SPA, Orcadian will retain an 18.75% carried interest in the Pilot development with Ping paying 100% of the pre-first oil scope of work.

As announced on 25 October 2023, Orcadian and Ping previously requested that NSTA extend the second term of license P2244 and were granted a two-year extension to the second term of the license. This extension remains conditional upon completion of the farm-out prior to the end of March 2024. Orcadian and Ping are also negotiating a Joint Bidding Agreement ("JBA") in respect of, and requested an out-of-round application for, the area of former License P2320 (which Orcadian had to relinquish earlier this year), in support of the Pilot development and the area plan.

The development plan under discussion with Ping is designed to phase the project to maximize opportunities for learning and to minimize the initial cost of the development. The Pilot field has 2P Reserves of 78.8 MMbbl, as audited by Sproule in April 2021, a copy of the Sproule report is contained in the Company's Admission document, which can be found on the Company's website. The proposed revised plan could, based on Orcadian management's internal estimates, result in an uplift to this resource estimate; but the overall outcome will be dependent on the precise plan adopted by the partnership.

The Company intends to update the Competent Person's Report for Pilot once the FDP has been finalized. The SPA includes a number of conditions precedent including, but not limited to, Orcadian shareholder approval; completion of commercial and legal due diligence by Ping; execution of the JOA referred to above; approval of the transaction (and variations to the existing agreements in place, where appropriate) from the NSTA, Shell, TGS ASA, and Ping's parent company board and, if required, shareholders. Orcadian may be a small operator, but it is also nimble, and the Directors believe it has grasped opportunities that have eluded some of the much bigger companies.

As strike a balance between Net Zero and a sustainable energy supply, Orcadian intends to play its part to minimise the cost of Net Zero and to deliver reliable energy to the UK. Orcadian intends to play its part To minimize the cost of Net zero and to deliver reliable energy to The UK. Orcadian Energy (CNS), was founded in 2014 and is the sole licensee of P2244, which contains 78.0 MMbbl of 2P Reserves in the Pilot discovery, and of P2482, which contain a further 52.2 MMbbl of 2C Contingent.