P1125 Relinquishment Report for Blocks 30/23a, 30/27a and 30/28a

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1 P1125 Relinquishment Report for Blocks 30/23a, 30/27a and 30/28a Header Licence Number P1125 Licence Round 21st Round Licence Type Traditional Production Licence Block Numbers 30/23a, 30/27a and 30/28a Operator Lundin Britain Ltd Partners Lundin Britain Ltd 25% Wintershall 65% Challenger Minerals International (North Sea) Ltd 10% Work Status No outstanding commitments remain on any of the constituent blocks Synopsis Licence P1125 was originally awarded to Walter E & P as a Promote licence in October 2003 (21 st Round) and subsequently converted to a Traditional licence after the initial 2 year term. During this period, an exploration well, 30/28-2, was drilled (2004). Half the area was surrendered with effect from 1st October 2007 for the second term (to 1st October 2011), prior to Lundin acquiring an interest and operatorship by farm-in arrangement on 27th December The final licence outline is shown in Figure 1. Licence P1125 was originally acquired to evaluate Jurassic, Zechstein and Rotliegendes prospectivity. A full technical review carried out in 2009 identified a number of small Jurassic prospects only with no potential seen in the deeper horizons. As a result, the partnership has elected to relinquish all remaining areas of the licence mid way through the second term so that no further blocks will be licensed within P1125. This report is to support the full relinquishment. There are no remaining commitments on any of the constituent blocks.

2 Exploration Activities Exploration activities included the drilling of exploration well 30/28-2 in September 2004 (drilled by Walter E & P prior to Lundin entry into the licence) and the acquisition by Lundin of 220 sq km of 3D seismic in For the purposes of the 2009 technical evaluation, this survey was merged with the 440 sq km D survey shot by Agip and used in the technical evaluation carried out in Additional use was made of older CGG speculative 3D data and the PGS MegaMerge (Figure 2). The blocks are located on an elevated platform situated along the south-western margin of the Central Graben. Nearby Ardmore and Dalmore fields, together with the Iris discovery (30/29a-1), suggested hydrocarbon potential to occur within the Jurassic, Zechstein and Rotliegendes intervals The 2009 evaluation, however, confirmed limited potential to occur within the Jurassic only. The karst characteristics necessary for a Zechstein play are missing and the Rotliegendes penetrations made on viable looking structures are dry. Only the Upper Jurassic Duncan sand was considered to be prospective. Mapping shows an area that is intensely faulted (Figure 3) and, though well evidence suggests widespread sand distribution across the area, the occurrence of a small oil accumulation at Iris (30/29a-1) and its close proximity to an up dip dry well (30/29a-3), points strongly to an area broken up into isolated faulted compartments. The map shows a number of identifiable closures, including Iris (30/29a-1), an inferred accumulation associated with 30/28-1 (good oil shows) and additional closures identified as being prospective. All prospects and culminations are summarized in Figure 4. The key risk was considered to be hydrocarbon charge due to migration issues and quantity. Dry wells 30/23-1 and 30/23a-3 preclude any migration into the blocks from the northwest, whilst the Iris oil accumulation and weak oil shows seen in 30/29a-2 suggest a charge scenario, albeit limited in quantity, from Dalmore field to the northeast as a possible overspill. Charging 30/28-1 is likely to have occurred along the structural trend as marked on the map, necessitating the filling of Prospect A to spill along the way. Prospects B and C are small closures, though upside potential may occur. Prospect C upside relies on a stratigraphic sand pinch out in the vicinity of 30/28-2 (well did not penetrate to the base of the Jurassic). Prospect C upside relies on a down faulted seal against pre-zechstein stratigraphy, either Rotliegendes or Devonian.

3 All volumes are summarized in Table 1. Maps and Sections P /28-2 Figure 1 Location Map showing License area and Exploration Well Dalmore (Duncan Ardmore (Argyll) PGS MegaMerge Agip 3D 480sqkms Iris Lundin D 220sqkms Merged dataset combines Lundin 2008 and Agip Iris 3D datasets on same grid spacing and orientation as the Lundin 3D Figure 2 Seismic Database CGG Spec 3D Lundin P1125 Licence Blocks

4 Dalmore Ardmore 30/23a-3 30/ / /29a-2 30/29a-1(Iris) Iris 30/29a-3 30/ / Km Figure 3 Duncan Sand Depth Structure 30/23a Dalmore 30/23a- 30/23- D Ardmore 30/27-30/28a A 30/29a-2 30/29a- 30/29a- Iris 30/27a C B 30/28-30/28-1 Accumulation Proven oil Dip closed faulted structural Stratigraphic/Downfaulted closure Oil well / Strong oil shows C upside Figure 4 B upside Optimistic and Pessimistic 30/28- P1125 Prospects and Culminations Weak oil shows Dry wells

5 Line 2 Line 1 Figure 5: Lines 1 & 2 Line 1 Prospect A BCU Top Chalk Top Triassic Top Rotliegendes SW NE Figure 6: Prospect A Line 1

6 Line 2 Prospect A Top Chalk BCU Top Triassic Top Rotliegendes NW SE Figure 7 Prospect A Line 2 Table 1 Prospect Summary Prospect / Lead STOIIP (mmbbls) Trap Type CoS Prospect A Whole In block Faulted 4 way dip closure 0.35 Lead B Tilted fault block 0.22 Lead B Upside Stratigraphic pinch out 0.08 Lead C Lead C Upside Lead D Tilted fault block Down-faulted against pre- Zechstein Fault and dip bounded closure

7 P Relinquishment Block 30/23a (as at 24/11/2007) is bounded by the following co-ordinates - (1) " N " E (2) " N " E (3) " N " E (4) " N " E (5) " N " E Block 30/27a (as at 01/10/2003) is bounded by the following co-ordinates - (1) " N " E (2) " N " E (3) " N " E (4) " N " E (5) " N " E Block 30/28a (as at 24/11/2007) is bounded by the following co-ordinates - (1) " N " E (2) " N " E (3) " N " E (4) " N " E (5) " N " E (6) " N " E (7) " N " E (8) " N " E (9) " N " E These co-ordinates were specified using "European Datum 1950" (see Figure 1 for location). Lundin gives permission to publish information in this report.