Orcadian Energy plc announced the completion of the previously announced farm-out of an 81.25% interest in licence P2244, which contains the Pilot field, to Ping Petroleum UK plc. Ping is focused on shallow water offshore production and development opportunities and has a significant acreage holding to the East of Pilot. This means that Orcadian Energy retains an 18.75% interest in the Pilot field development, fully carried to the first offload of oil produced from the field.

Orcadian has no requirement to fund the pre-production development project work programme. The commercial terms of the transaction are summarised: Ping has acquired an 81.25% interest in licence P2244, which contains the Pilot field; Ping has been appointed operator of the licence; Orcadian will retain an 18.75% fully carried interest in the Licence; The carry will apply to all pre-first offload expenditure up to a cap which will be based upon the field development plan budget, as submitted to NSTA, inclusive of contingencies and will be repaid by a combination of a reduced revenue interest of 10% and any cash tax benefits enjoyed by Ping related to the carry expenditure; On repayment of the carry the revenue interest will revert to 18.75%; Orcadian will now receive a $100,000 cash payment and reimbursement of certain past costs capped at £250,000; Orcadian will also receive a $3m payment on FDP approval.