Relinquishment Report. for. Licences: P.1596 (Blocks 205/3, 205/4a) P.1836 (Block 205/2b) P.1837 (Block 205/5b)

Transcription

1 Relinquishment Report for Licences: P.1596 (Blocks 205/3, 205/4a) P.1836 (Block 205/2b) P.1837 (Block 205/5b) November of 9

2 CONTENT 1. Header 2. Synopsis 3. Exploration Activities 4. Prospectivity Analysis 5. Reserves Summary 6. Clearance 7. Figures LIST OF FIGURES Figure 1: Location Map P Figure 2: Location Map P Figure 3: Location Map P Figure 4: Seismic database Figure 5: Vaila Horizon Depth Map Figure 6: Geoseismic Cartoon 2 of 9

3 1. Header Licence Number P.1596 P.1836 P.1837 Round/Award Date 25 th 12/02/ th 10/01/ th 10/01/2011 Licence Type Traditional Traditional Traditional Block(s) 205/3, 205/4a 205/2b 205/5b Equity Holding Nexen Pet. UK Ltd 70% Dana Petroleum 30% Nexen Pet. UK Ltd 70% Dana Petroleum 30% Nexen Pet. UK Ltd 70% Dana Petroleum 30% Work Programme Firm: Firm: Firm: Summary Obtain 720km² of 3D Reprocess 355km² of 3D Reprocess 355km of 3D seismic data seismic data seismic data Drill or Drop: Drill or Drop: Drill or Drop: Drill one well to 3770m Drill one well to 3200m Drill one well to 3200m or into the Palaeocene or 30m below the base or 30m below the base Vaila Formation, Vaila sandstone, Vaila sandstone, whichever is the whichever is the whichever is the shallower, or elect the shallower, or elect the shallower, or elect the licence to automatically licence to automatically licence to automatically cease cease cease Map Figure 1 Figure 2 Figure 3 2. Synopsis Licence P.1596 was awarded to Nexen and Dana Petroleum on 12 February 2009 through the 25 th UK Licensing Round. The Blocks were applied for in a single 25th Round Application on the basis of interpreted leads in deep water basin-floor and channel sands of the Paleocene (T32-36) Vaila Formation. Licences P.1836 and 1837 captured additional acreage in the 26 th Round over the full extent of the leads identified in the early evaluation of the P.1596 licence. The licence work programmes were carried out as committed in each of the P.1596, P.1836 and P.1837 licences and a technical determination of the low resource potential in the identified prospects lead to a no drill decision by the partnership. The P.1596 licence will not be advanced beyond the natural expiry of the Initial Phase on 12 February 2012 and the P.1836 and P.1837 licences will be relinquished early before the culmination of their Initial Phases on 10 January 2015 with relinquishment effective 10 December Exploration Activities Firm Commitment Obligations The partnership has met and exceeded the firm commitment to obtain and reprocess a total of 1430 km2 3D seismic data on the three licences through the purchase of a total 3 of 9

4 of 2400km sq of the reprocessed PGS FSB MC3D Phase 2 MegaSurvey Plus PSTM data (Figure 4). Additional Studies Reservoir Distribution Model All regional wells as were publically available were tied to the regional seismic grid to derive a reservoir distribution model. Reservoir Quality Analysis Petrophysical data (and core data when available) from Seventeen wells were analysed in the region to understand Paleocene reservoir quality. Fault Seal Analysis Models to determine necessary throw with assumed shale gouge ratios were generated for the prospects requiring lateral fault seal. Source Rock Geochemistry and Basin Modelling A regional study of available geochemical analyses from wells was undertaken to help determine source rock quality. Five wells provided 1D calibration to basin models. Seismic Inversion A work programme of rock physics modelling and a coloured and an elastic inversion of a subset of the seismic data were undertaken to predict the presence of sand lithology and hydrocarbon fluid within the leads and prospects. Risking and Volumetrics Prospect Whitehorse was re-risked post above analyses, resource determination indicated sub-commercial accumulations. No wells were drilled in the licence area 4. Prospectivity Analysis The Quad 205 blocks are located in the Faroe-Shetland Basin 95km north-west of the Shetland Islands and lie in water depths ranging from 2000 to 3000 ft (610 to 920 m). The blocks are located within the Flett sub-basin between the Flett Ridge and the Corona Ridge and between the Clair and Westray Transfer Zones. The area is covered by a thin package of Eocene Faroe Lavas. The area was deemed prospective as it contains mature and rich source rocks, reservoir quality sands and is adjacent to a number of hydrocarbon discoveries. The evaluated prospect was identified as a potential Vaila equivalent south to north trending channel with notable high maximum negative amplitude on the Full Stack PGS reprocessed PSTM data. Faults down throwing to the north cut the channel and provide fault closure and separation from the up-dip water wet 205/9-1 well (Figure 5). Reservoir The main play reservoir is the Vaila sandstone, the sand fairways are mappable on seismic. 4 of 9

5 Source Seal Trap Major discoveries include Foinaven, Schiehallion, Laggan and Tormore, These are largely amplitude related stratigraphic traps, however, AVO anomalies have proven to be not always related to HC content. Reservoirs are deep water base of slope and basin floor fans. Average reservoir porosities up to 25% are observed and deteriorate with depth of burial. Chlorite coating is observed in the Laggan Tormore trend and is proven to preserve good reservoir properties even at greater depths. HC charge is complex because of the difficulty to properly map the source and lack of constraints in the basinal areas, most likely along deep seated faults. Late Tertiary expulsion, secondary migration pulses from deeper targets has also been suggested by different operators. Good quality Kimmeridge source rock, gas prone to post mature present day with an earlier phase of liquids leading to light oil in Laggan Tormore wells. Top seal is provided by the Kettla formation and the inter-bedded shales of the Lamba formation. Lateral / cross fault containment main risk identified. The Kettla Tuff and T36 Shale Top Seal is proven in the area and evident from the pressure/depth plots. Faulting is required to separate the targeted interval from an updip water wet well. Impedance responses indicate small amounts of HC liquids are trapped in limited 3-way dip/fault configurations. Risking and Remaining prospectivity Prospect was risked with DHI consideration based on the proven play types in the basin leading to a Pg of 0.8 but recoverable resource volumes were well below commercial thresholds. No further prospectivity was assessed. 5 of 9

6 5. Reserves Summary On the basis of the post-award assessment of prospectivity on the Licences, recoverable reserves potential is considered small and uneconomic: P90 (11.6 bcf), Pmean (17.5 bcf), P10 (24.4 bcf). Partners agreed to determine the P.1596 Licence on 12 February 2012 and the P and 1837 Licences will be determined two years ahead of the end of the first term. 6. Clearance Nexen Petroleum U.K. Limited confirms that DECC is free to publish this document, and that any relevant third party ownership rights have been cleared for publication purposes. 7. Figures Figure 1. Licence P.1596 Location Map. 6 of 9

7 Figure 2. Licence P.1596 Location Map. Figure 3. Licence P.1596 Location Map. 7 of 9

8 Figure 4. Seismic Database. Red polygon covers 2400km sq PGS FSB Mega Survey Plus. Figure 5. Target Horizon Depth Map. 8 of 9

9 Figure 6. Geoseismic Cartoon. Location of section shown by orange line on Figure 5. 9 of 9