Relinquishment report P.1190 & P.1262 Blocks: 204/13, 204/14b
CONTENTS 1: LICENCE DETAILS... 2 2: LICENCE SYNOPSIS... 2 3: WORK PROGRAMME SUMMARY... 3 4. DATABASE... 5 5: PROSPECTIVITY UPDATE... 6 6. RESERVE AND RESOURCE SUMMARY... 11 7. CONCLUSIONS... 11 8. CLEARANCE... 11 LIST OF FIGURES Figure 1: Location map showing UKCS Licences P.1190 and P.1262 and the outline of the Tornado Gas Discovery.... 4 Figure 2: Map showing location and extent of primary seismic data, utilised in the evaluation of Licence P.1190 and P.1262.... 6 Figure 3: Geological Model for Tornado discovery. Red line indicates line of section (inset).... 7 Figure 4: Surface Attribute Map showing Tornado anomaly (negative amplitude below T38c pick (SF96, reprocessed by CGG)).... 8 Figure 5: Northwest to Southeast Arbitrary Seismic TWT through Tornado (SF96, reprocessed by CGG, 2009). 3D Reprocessed +ve = reduction in acoustic impedance.... 8 Figure 6: Wireline elastic logs from 204/13-1.... 9 Figure 7: LWD elastic logs from 204/13-1z.... 9 Figure 8: a. S - N seismic section (VE x5) through the Tornado discovery at T38 level (PGS Geostreamer FSB 11-12). The Tornado reservoir is evident by the high amplitude 'soft' (red trough). b. Top Tornado depth structure map, indicating the 3-way dip closed nature of the Tornado discovery, with the stratigraphic pinch out of the T38 sands to the south.... 10 Figure 9: Tornado hydrocarbon contacts derived from MDT pressure gradients (in line with logging results): GOC -2563.5m and OWC -2573.25m.... 11 LIST OF TABLES Table 1: Volumetric summary of Tornado in-place volumes (gas) 11 Table 2: Volumetric summary of Tornado un-risked recoverable volumes (gas) 11 2017-07-04 1
1: LICENCE DETAILS P.1190/P.1262 Relinquishment. Blocks 204/13a, 14b SPEL (Op) 100% Licence Number: P.1190 and P.1262 Location: West of Shetland Licence Round: o P.1190: 22 nd Seaward Licensing Round 1 st Dec 2004 o P.1262: 23 rd Seaward Licensing Round 22 nd Dec 2005 Licence Type: Traditional Blocks: 204/13a, 204/14b Partners: Siccar Point Energy Ltd (100%) Area: o P.1190: 79.70 km 2 o P.1262: 20.36 km 2 Relinquishment: 10 th March 2017 All permissions to publish have been obtained. 2: LICENCE SYNOPSIS LICENCE P.1190 UK offshore Licence P.1190 (Figure 1) was awarded to OMV (UK) Ltd (80% op) in partnership with Faroe Petroleum (20%) as part of the 22 nd Seaward Licensing Round in December 2004. The Licence application was primarily to investigate the exploration potential of a T38 Lamba (Uppermost Palaeocene) aged seismic amplitude anomaly (Tornado Prospect). OMV acquired and processed 220km of long offset 2D seismic data, in addition to Controlled Source Electromagnetic (CSEM) data in 2005 and 2006 respectively, prior to a drilling decision being taken in 2007. A one year Licence extension was granted by DECC in 2008 to facilitate the drilling of the Tornado exploration well. Exploration well 204/13-1(1z) was drilled in 2009 in a water depth of 1047m, confirming Tornado as a gas discovery with a 36.25m hydrocarbon column. New multiclient 3D geostreamer seismic reflection data was acquired in 2011 and 2012 to facilitate an update of the reservoir model. A further 2-year licence extension was granted in 2012 to allow progression towards FDP and another 3-year extension granted in 2014 (expiry in November 2017) to allow a development consideration with a Cambo Hub Concept. Operatorship of the Licence transferred to Siccar Point Energy Ltd on the 13 th January 2017, as part of the sale of OMV (UK) Ltd. 2017-07-04 2
LICENCE P.1262 P.1190/P.1262 Relinquishment. Blocks 204/13a, 14b SPEL (Op) 100% UK offshore Licence P.1262 (Figure 1) was awarded on 22 nd December 2005 to a Joint Venture Partnership comprising OMV UK (70% op) and Dana Petroleum (30%), as part of the 23 rd Seaward Licensing Round. Dong Energy farmed into the Licence in 2009, taking 20% equity from OMV UK Ltd. Operatorship of the P.1262 Licence transferred to Siccar Point Energy Ltd on the 13 th January 2017, as part of the sale of OMV (UK) Ltd, by OMV AG to Siccar Point Energy Ltd. The round bid secured an extension of Tornado into the licence (30% within the 204/14b block). OMV UK Ltd acquired 43km Long offset 2D seismic data (2005) in addition to 167 km 2 of CSEM modelling (2006) and 138 km 2 of 3D seismic reprocessing (CGG, 2009) to fulfil the initial work programme. Following the successful drilling of well 204/13-z/1z, an agreement was made with DECC to align P.1262 with the P.1190, and forthwith carry no further obligation other than the submission of an approved FDP by November 2010. Extensions were granted in line with the P.1190 Licence (detailed above) prior to submission of relinquishment notification. Siccar Point Energy formally submitted notification of intent to relinquish Licences P.1190 and P.1262 in March 2017, due to a lack of a commercially viable gas export infrastructure. 3: WORK PROGRAMME SUMMARY LICENCE P.1190 Firm: Within two years of the beginning of the Initial Term, the Licensee shall obtain 200km of 2D seismic data. o Completed: 288-line km of 2D seismic acquired 2005. The Licensee shall reprocess 129 km 2 of 3D seismic data. o Completed: Data reprocessed in 2009. Drill or Drop commitments: The Licensee shall drill one well on the Tornado Lead to a depth of 2700m or to the Base Tertiary, whichever is shallower. o Completed: Well 204/13-1(1z) drilled September November 2009. 2017-07-04 3
Figure 1: Location map showing UKCS Licences P.1190 and P.1262 and the outline of the Tornado Gas Discovery. 2017-07-04 4
LICENCE P.1262 Firm: Within two years of the beginning of the Initial Term, the Licensee shall obtain 43 km of 2D seismic data. o Completed: Acquired 2D seismic in 2005 as part of P.1190 survey The Licensee shall reprocess 138 km 2 of 3D seismic data. o Completed: Data reprocessed in 2009. The Licensee shall conduct 167 km 2 of CSEM modelling. o Completed: Acquired in 2006 as part of P.1190 work programme. Drill or Drop commitments: The Licensee shall drill either: - Drill one well to 3000m or to the Base Tertiary, whichever is shallower, or - Elect to allow the Licence to automatically cease and determine pursuant to Clause 3. o Completed: Well 204/13-1(1z) drilled September November 2009 as part of P.1190 All Licence work obligations for P.1190 and P.1262 have been fulfilled with none outstanding. 4. DATABASE The seismic database (Figure 2) used in the evaluation of Licence P.1190 and P.1262 is as follows: 2D Survey OM052D Acquired by Spectrum for OMV, 2005. 3D Survey SF96, reprocessed by CGG for OMV, 2009 3D FSB11-12, Multiclient dataset, shot by TGS and PGS, Licenced by OMV in 2012 2017-07-04 5
Figure 2: Map showing location and extent of primary seismic data, utilised in the evaluation of Licence P.1190 and P.1262. 5: PROSPECTIVITY UPDATE P.1190 and P.1262 were licensed to explore the potential of a T38 Lamba age lead, which comprised a combination 3-way dip closure with and up-dip pinch out. The reservoir is associated with a seismic amplitude anomaly which has been attributed to the presence of hydrocarbon bearing sands of Upper Palaeocene age (T38). These sandstones are thought to have been deposited in a marine setting at the front of a progradational wedge during the Late Palaeocene basin fill (Figure 3) The Tornado amplitude (Figure 4) straddles two blocks, with 75% in 204/13 and 25% in 204/14b. The Cambo discovery, now operated by Siccar Point Energy lies directly to the north of Tornado in blocks 204/9 and 10. In this area, slightly younger Palaeocene sands (T45) deposited over an underlying granodiorite high were found to be hydrocarbon bearing (24 degree API oil). Directly to the south-east in block 204/14a, the Suilven discovery encountered 32 degree API oil with a significant gas cap in slightly older Palaeocene sands (T35). The main area of production lies to the south of Tornado at BP s Schiehallion, Foinavon and Loyal fields where deep water sands within the Palaeocene (T22-T35) produce 24-27 degree API oil. The reservoir has been recognised as a base of slope fan deposited at the toe of a series of clinoforms of T38 age. These clinoforms, which have prograded northwards into the basin, have been penetrated by the 204/18-1 (Assynt) well where an earlier toe of slope fan has been identified. To the east the anomaly pinches over the Nave High, and does not closely conform to structure. 2017-07-04 6
The amplitude anomaly associated with the Tornado prospect allowed a well position and design that included a significant appraisal opportunity in the event of a discovery (Figure 5); by drilling on the flank of the prospect near the expected hydrocarbon-water contact. The logic was that assuming the initial well was targeted at a strong part of the anomaly, if the anomaly was not driven by hydrocarbons there was no likelihood of hydrocarbons up-dip. The Tornado prospect was drilled by OMV in 2009. The discovery well (204/13-1) encountered 73ft (22m) net reservoir sandstone with average porosity and permeabilities of 25% and 1300 md respectively. A total gas column of 82 ft. (25m) was intercepted at the crest, with a down-dip oil rim of 36ft (11m) and a GOC at 8410 ft. (2563m). The oil was similar to Suilven and had an API of 32 degrees, while the gas was wet, with associated condensate (48 degrees API). No hydrocarbon contacts were detected in the discovery well hence the sidetrack 204/13-1z was drilled (incorporated into the original drilling programme) to test the downdip extension of the prospect and to search for an oil/water contact (OWC). The sidetrack successfully found the OWC at 8442 TVDSS and encountered 15 (4.6m) of gas and 37 (11m) oil in 114 (35m) of highly permeable (averaging 1000mD) and 25 degree average porosity sandstones. The gas effect can be observed clearly on wireline and LWD elastic logs for wells 203/13-1 and 204/13-1z (Figures 6 and 7). A static model was refined by OMV UK in 2015, based on the interpretation of the more recently acquired and higher quality FSB11-12 geostreamer 3D seismic data (Figure 8). Modelling indicated an estimated P50 gas in place volume of 560 bcf (Table 1), and unrisked recoverable P50 volume of 458 bcf. Figure 3: Geological Model for Tornado discovery. Red line indicates line of section (inset). 2017-07-04 7
Figure 4: Surface Attribute Map showing Tornado anomaly (negative amplitude below T38c pick (SF96, reprocessed by CGG)). TWT (ms) Wells 204/13-1 and 204/13-1Z Figure 5: Northwest to Southeast Arbitrary Seismic TWT through Tornado (SF96, reprocessed by CGG, 2009). 3D Reprocessed +ve = reduction in acoustic impedance. 2017-07-04 8
Figure 6: Wireline elastic logs from 204/13-1. Figure 7: LWD elastic logs from 204/13-1z. 2017-07-04 9
Figure 8: a. S - N seismic section (VE x5) through the Tornado discovery at T38 level (PGS Geostreamer FSB 11-12). The Tornado reservoir is evident by the high amplitude 'soft' (red trough). b. Top Tornado depth structure map, indicating the 3-way dip closed nature of the Tornado discovery, with the stratigraphic pinch out of the T38 sands to the south. 2017-07-04 10
Figure 9: Tornado hydrocarbon contacts derived from MDT pressure gradients (in line with logging results): GOC -2563.5m and OWC -2573.25m. 6. RESERVE AND RESOURCE SUMMARY Tornado GIIP (BCF) OIIP (mmbbls) Estimated In-place Volumes (Gas/Oil) P90 P50 P10 417 553 704 36 41 43 Table 1: Volumetric summary of Tornado in-place volumes based on static modelling. Tornado Unrisked recoverable reserves (Gas/Oil) P90 P50 P10 BCF 335 458 597 Mmbbls 1.8 2.4 3.2 Table 2: Volumetric summary of Tornado un-risked recoverable volumes. 7. CONCLUSIONS Following the results of the subsurface work as detailed above, Siccar Point Energy conclude, due to the lack gas export infrastructure, the moderate size of estimated recoverable gas reserves and thin oil rim; that the Tornado discovery does not represent a commercially viable development at the current time and hence has relinquished the P.1190 and P.1262 Licences. 8. CLEARANCE Siccar Point Energy Limited confirms that OGA are free to publish this document, and that any third-party ownership rights have been cleared for publication. 2017-07-04 11