(Sharecast News) - North Sea-focussed oil and gas developer Orcadian Energy has executed a formal agreement with Carrick Resources for a sub-area of licence P2320, it announced on Wednesday, which covers the Carra prospect.
The AIM-traded firm said that under the deal, the consideration for the transfer of the Carra interest would be satisfied through certain work milestones, with no cash consideration.
Carrick would review existing data, acquire a licence to, and reinterpret, the seismic data currently being reprocessed by TGS relating to the Carra prospect, and remap the prospect.
In return, on completion of the updated mapping, Orcadian would, subject to North Sea Transition Authority approval, assign a 50% interest in the sub-area of licence P2320, which contains the bulk of the Carra prospect, to Carrick.
Carrick could withdraw from the agreement before the remapping was completed, with the work expected to take four months.
Orcadian said Carrick agreed that after the transfer, it would then work up the Carra prospect to drill-ready status and manage a further farm-out process on the prospect.
By entering into the agreement, Orcadian said it was building on the "long experience" of the Carrick team in the area, and "maximising the potential" of the undrilled prospect.
The Carra prospect lies to the east of the Crinan and Dandy discoveries and to the south of Fyne.
Orcadian said it was contained in Tay and Cromarty sandstones, which lie on trend with Guillemot West, and was a stratigraphic trap associated with a clear amplitude anomaly defined by 3D seismic.
The prospect was undrilled and unexplored, but early internal estimates from Carrick indicated there was potential for it to contain P50 recoverable prospective resources of 30 million barrels of medium gravity oil.
Carra was a prospect on which Orcadian had undertaken no exploration activities, and so there were no turnover or profits attributable to the Carra sub-area.
"We are delighted to have signed the sale and purchase agreement with Carrick," said chief executive officer Steve Brown.
"This agreement enables us to further de-risk and maximise value from our assets in a very cost-effective way while developing a drill ready prospect on Carra.
"Progressing Pilot and the prospects close to it remains our core focus whilst we continue to extract the maximum value on all our assets."
At 0906 BST, shares in Orcadian Energy were up 6.35% at 33.5p.
Reporting by Josh White at Sharecast.com.