Licence P1368: Relinquishment Report (end of 2 nd term) Hurricane Exploration PLC

Transcription

1 Licence P1368: Relinquishment Report (end of 2 nd term) Hurricane Exploration PLC March 2012

2 1. Header Licence Number: P1368 Licence Round: 23 rd Licence Type: Frontier Block Numbers: 202/4, 202/5, 204/30, 205/21a, 205/22, 205/23, 205/24, 205/26b, 205/28 Award date: 22/12/ 2005 End of Initial Term: 22/12/2007 End of Second Term: 22/12/2011 Equity: Hurricane (100%) Work Programme Summary: Shoot 450km of 2D seismic data Acquire 600km 2 of 3D seismic data Reprocess 400km of existing 2D seismic data Drill one well to a depth of 1100m or to the Pre-Jurassic, whichever is the shallower 2. Licence History Frontier Licence P1368 was awarded as part of the 23 rd Round on December 22 nd The original Licence was operated by Hurricane Exploration PLC with 50% equity, with Sunshine Oil PLC holding the remaining 50% interest. In June 2008 Hurricane obtained Sunshine s share in the licence and became 100% licence holder and operator. A map showing the blocks awarded under this Licence can be seen in Figure 1. At the end of the Initial Term a relinquishment area was agreed with DECC (the mandatory relinquishment required after the first two years). The blocks retained for the Second Term were 204/30a, 205/21a, 205/22a and 205/26b, as shown in Figure 2. In order to proceed into the Third Term, a further relinquishment has been made. Figure 3 shows an outline of the blocks retained into the Third Term, effective December 22 nd This relinquishment report covers the areas surrendered up to the end of the Second Term.

3 3. Exploration Activities Seismic Hurricane acquired over 1400km 2 of existing 3D seismic data over the Licence area. This formed part of the PGS megamerge dataset. In addition, TGS shot 1520km of long offset 2D on behalf of Hurricane. It was not considered necessary to reprocess the existing 2D data, so it was agreed with DECC that the additional 2D data that had been shot would substitute the reprocessing commitment made on application. Wells Hurricane had one drill-or-drop commitment on Licence P1368. The decision was made to drill well 205/24-1 in August 2006 which met this commitment. In addition, Hurricane have drilled another three wells on the Licence which were not part of the original work commitment. The wells drilled by Hurricane on Licence P1368 are as follows: 205/24-1 was drilled in 2006 on the Wellington Prospect. It targeted a 3-way dip, fault bounded closure on the southern flank of the Rona Ridge. The primary reservoir target was the Jurassic Rona Sandstone Formation. The well reached a TD of 1235m MD in Triassic sands. Only very minor oil shows were encountered in the Rona Sandstone so the well was plugged and abandoned. 205/21a-4 was drilled in 2009 on the Lancaster Prospect, a large 4-way dip closure at basement level located at the crest of the Rona Ridge. The primary reservoir target was the fractured Lewisian Basement. Oil shows were seen in both the basement and the overlying Upper Cretaceous Commodore Sandstone. The well was tested and flowed light oil (38 o API) at a maximum rate of 1,3607 bopd from the fractured basement. However flow rates were restricted due to a combination of tubing restriction, limited drawdown and drilling mud reducing fracture permeability. 205/21a-4z was drilled as a sidetrack to 205/21a-4 in The purpose of the sidetrack was to determine a more accurate flow rate for the basement and to further evaluate the permeability distribution within the basement. 113m of oil-bearing fractured basement was drilled and a maximum flow rate of 2,885bopd of 38 o API oil was recorded. The well is currently suspended. 205/21a-5 was also drilled in 2010 on the Whirlwind Prospect, another fractured basement target. Whirlwind is a large 4-way dip closure (some 30km 2 ) located north of the Rona Ridge in a deeper structural setting. Oil shows were encountered in the thick Lower Cretaceous Valhall Limestone sequence overlying the basement and evidence for the presence of hydrocarbons within the basement was also noted. However due to the onset of winter weather the well was suspended before testing could be carried out. The well was re-entered in 2011 and a light volatile oil / condensate was successfully flowed to surface from the open hole section over the Valahall and basement. The well has been left suspended with the intention of drilling a future sidetrack Technical Studies G&G studies pertinent to the Licence area that were undertaken over the Initial and Second Terms included:

4 1. Regional interpretation of gravity and magnetic data this was carried out with the aim of creating a top basement depth surface by performing a 3D inversion of gravity data. Constraints were provided from well data with depth estimates obtained from 2D gravity and magnetic modelling. In addition, structural / tectonic lineaments were identified as well as potential field gradients overlying the basement surface. 2. Regional geochemistry study in order to improve the overall understanding of the petroleum system in the area eighteen wells were included in a geochemical study with selective geohistory analysis also being completed. The aim of this study was to characterise source rock distribution and to evaluate maturity, hydrocarbon occurrence, timing of charge and oil composition. The wells included in the study were: 202/3a-3 204/ / / / /29a-2 205/ / /21-1a 205/21a-4 205/21a-4z 205/21a-5 205/22-1a 205/ / / / / Petroleum System Geological setting of the original Licence area Licence P1368 is located in the West of Shetlands area to the southeast of the Foinaven and Schiehallion Fields and southwest of the Clair Field. Water depths are relatively shallow, in the region of 100m 200m. The prominent NE-SW trending Rona Ridge is a Lewisian Basement high that runs through the centre of the Licence area (see Figure 4). A top basement structure map showing the major fault trends can be seen in Figure 5. The Faroe-Shetland Basin lies to the north of the Rona Ridge, and the East Solan Basin and West Shetland Basin are located to the south. Source and charge There have been multiple phases of charge throughout the West of Shetlands region dating from the Upper Cretaceous to the present day. The main source rock is the Kimmeridge Clay Formation although Middle Jurassic Judd Group shales could also have locally generated hydrocarbons. The Faroe-Shetland Basin, West Shetland Basin, West Solan Basin and East Solan Basin have all been demonstrated to have generated hydrocarbons.

5 Reservoirs Hurricane s main objective when applying for Licence P1368 was to evaluate the hydrocarbon potential of the fractured Lewisian Basement. However, there was other potential identified in the Triassic sands as proven in the stranded Strathmore oil discovery. In the Jurassic, the Rona Sandstone has variable reservoir properties but numerous oil shows and a number of leads were identified. Also of Jurassic age is the Solan Sandstone, which is the reservoir of the Solan Field in block 205/26a. Within the Lower Cretaceous there is reservoir potential within both sandstones and limestones, whilst Upper Cretaceous sands, if present, may also represent a viable target. Traps and Seals The Lewisian Basement of the Rona Ridge has a number of 4-way dip closures along its length, although there is also the potential to find oil trapped unconventionally in the basement below structural closure along the ridge. Frequently overlying the basement there is a thin section of either Jurassic or Cretaceous sandstones that share an oil column with the basement. Above this is a thick sequence of Upper Cretaceous shales which act as the regional top seal. Other targets, such as Cretaceous sandstones and the Solan Sandstone, may have a strong stratigraphic component to the trapping mechanism, with sealing provided by the Kimmeridge Clay Formation or Lower/Upper Cretaceous shales. 5. Remaining Prospectivity A map of the remaining prospectivity for Licence P1368 can be seen in Figure 6. This figure also shows the leads identified at the point of bid submission - these have now all been discounted due to risks associated with reservoir quality and/or trap integrity. Three prospects (Wellington, Lancaster and Whirlwind) have been drilled within the six year period covering the Initial and Second Terms. Wellington has now been relinquished whilst Lancaster and Whirlwind have both been retained for further appraisal. An additional basement prospect, Lincoln, is yet to be drilled but has been retained into the Third Term. Strathmore, the stranded Triassic discovery has also been retained. Within the relinquished area, three viable leads remain (one in the Lower Cretaceous and two in the basement). The leads are summarised as follows: Lower Cretaceous Fan Lead A Lower Cretaceous submarine fan lead of probable Aptian age is present in the relinquished part of Block 205/26b. This lead has previously been identified by DECC. The fan is seen on seismic as a thickening package within the Lower Cretaceous sequence on the northern margin of the East Solan Basin (Figure 7). The trapping mechanism involves up-dip stratigraphic pinch out onto the edge of the Rona Ridge with sealing provided by Lower and Upper Cretaceous shales. Some fault control on the fan distribution and sealing is also suggested. The Kimmeridge Clay Formation in the central (downdip) part of the East Solan Basin provides the main source kitchen. Figure 8 illustrates the limit of the lead based on the interpreted limit of sand deposition, pinch-out and spill point/ closure, the lead extending eastwards into Block 205/27. Geological risks for the lead include sand fairway presence, seal integrity and updip seal.

6 Basement Leads Figure 9 shows the location of two basement leads identified in Block 204/30b. The more northerly lead is a 4-way dip closure at basement level with regional top seal provided by Upper Cretaceous shales. Given that the closure is directly up-dip from the Faroe-Shetland Basin, charging the structure should be straightforward. Seismic data reveals that faulting is present over the structure, so the assumption can be made that a fracture network exists. However, there are no recorded oil shows on structure to date. Well 204/30-1 has been drilled on the southern side of the closure and did not record any shows in the Lower Cretaceous, Jurassic of basement, so could represent a limit to the volume of hydrocarbons found on structure. A second basement lead has also been identified in block 204/30b, being mapped as a westerly extension to the Lincoln Prospect which has been retained by Hurricane Exploration for future drilling in Block 205/26b. The lead is loosely defined and largely comprises an upside case for the Lincoln prospect that requires oil to be trapped in the basement below conventional structural closure, the conjectural upside limit on Figure 9 being based on the depth of the oil shows observed in the Upper Jurassic Rona Sand and possibly also the top of the underlying basement in neighbouring well 205/26-1. Both leads in Block 204/30b are anticipated to contain oil of similar quality ( ie 38 o API) to that found in Hurricane s Lancaster discovery. 6. Resource Potential Lower Cretaceous Fan Lead The following prospective resource potential (mmbo recoverable, unrisked) has been estimated for the Lower Cretaceous fan lead as mapped across the relinquished part of 205/26b and adjoining block 205/27: P90 P50 P10 Mean Basement Leads The following prospective resource potential (mmbo recoverable, unrisked) has been estimated for the northerly basement lead in Block 204/30b: P90 P50 P10 Mean The resource potential of the Lincoln extension area has not been estimated owing to the poorly constrained nature of the upside /unconventional trapping potential within the basement.

7 7. Maps and Figures Figure 1: Blocks operated by Hurricane during the Initial Term of Licence P1368 Figure 2: Blocks operated by Hurricane during the Second Term of Licence P1368

8 Figure 3: Blocks retained by Hurricane into the Third Term of Licence P1368 Figure 4: Geological setting of the original Licence area.

9 Figure 5: Top basement TWT map (contour interval 0.2s) for the P1368 area Figure 6: Remaining prospectivity in the retained part of Licence P1368 and relinquished areas. The leads / prospects that have been discounted are shown in blue.

10 SW NE Hidra Aptian Fan KCF Relinquished part of 205/26b Figure 7: NW-SE 3D arbitrary seismic line across the East Solan Basin showing interpreted presence and pinch-out of the Aptian Fan within the relinquished part of 205/26b. The southwestern part of the line ties to the Solan Field area (Seismic data courtesy of PGS) 205/26b (retained) 205/27 205/26b relinquished 205/26a Figure 8: TWT map of the Aptian fan (contour interval 0.5s) showing interpreted closure (blue outline) extending into Block 205/27. The downdip limit of the closure avoids potential leakage along the major bounding fault on the southern side of the East Solan Basin.

11 204/ /26-1 Structural closure Upside closure Figure 9: Top basement structure map showing location of Basement Leads in Block 204/30b (contour interval 50m). 8. Clearance Hurricane confirms that DECC is free to publish the above information and that all 3rd party ownership rights (on any contained data and/or interpretations) have been considered and appropriately cleared for publication purposes.