(Sharecast News) - North Sea-focussed oil and gas developer Orcadian Energy announced a seismic licensing deal with energy data company TGS on Wednesday.
The AIM-traded firm said the agreement would provide it with high-quality seismic data, revealing the reservoir structures and even the likely fluid type.
It said the deal with TGS would ensure that Orcadian would be able to use "the best data available" to evaluate the multitude of development opportunities and prospects within its North Sea portfolio.
Under the agreement, the company said it would gain access to 2,070 square kilometres of newly-reprocessed and interpreted 3D seismic data covering the bulk of its licences, enabling the evaluation of nearby open acreage in the upcoming 33rd round.
Near-term costs had been deferred, and future payments to TGS would largely derive from a 1% royalty on production, the board said.
TGS would also acquire 100 square kilometres of new seismic over the Elke and Narwhal discoveries, it added, subject to approval.
The North Sea Transition Authority (NSTA) had meanwhile confirmed that acquisition of the data would satisfy the phase B work commitment on P2482, with Orcadian requesting that the NSTA thus allows P2482 to continue into phase B.
Orcadian said it has 79 million barrels of 2P reserves in the Pilot field, 78 million barrels of 2C Resources in Elke, Narwhal and Blakeney discoveries, and 191 million barrels of prospective resources across its Western Platform licences.
Its understanding of Pilot and Blakeney was already "much improved" from the interpretation of data already licensed from TGS.
The new deal, the board said, would enable it to improve its understanding of the full potential of its licences and the surrounding areas to the same level, in advance of the upcoming 33rd licensing round.
"The agreement enables us to use the very best subsurface data whilst giving us access to recent advances in seismic processing to extract understanding from that data," said chief executive officer Steve Brown.
"A good subsurface understanding is the foundation upon which we will build our success and securing access to the best data available is essential.
"We are delighted that TGS have the confidence in our project to enter into this deal under which the vast majority of their return will depend on us successfully taking the project into production."
Brown said the company had licensed what it believed was "the highest quality data" across all of its Western Platform licences, while minimising value dilution to shareholders.
"This deal ensures a long-term alignment between TGS and Orcadian as we seek to make the most of the development and exploration potential of our acreage."
At 0947 BST, shares in Orcadian Energy were up 4.51% at 44.94p.
Reporting by Josh White at Sharecast.com.