ENDEAVOUR ENERGY UK LIMITED UK P2060, Block 29/06b Licence Relinquishment ISSUE RECORD SUMMARY Dec 2015 Final Graham Tegerdine Rev Date Description Document Owner Review Required By
Table of Contents 1 Licence Information 2 2 Licence Synopsis 2 3 Work Programme Summary 3 4 Database 4 5 Prospectively Update 6 6 Further Technical Work Undertaken 10 7 Resource and Risk Summary 10 8 Conclusions 10 9 Clearance 10 LIST OF FIGURES Figure 1 P2060 License, regional framework, BCU depth Figure 2 3D seismic, example final re-processing Figure 3 Coloured Inversion arbitrary line Figure 4 Extent of Fugro Terracube 3D data across P2060 license and area of final reprocessing Figure 5 2D seismic database Figure 6 P2060 License Application Prospects and Leads Figure 7 Edgecombe Prospect depth structure and trap configuration at Top Fulmar Formation Figure 8 North-south seismic line through Edgecombe Prospect interpod illustrating lateral / updip seal risk Figure 9 Combined dip and strike seismic line from 29/11-1 high through Edgecombe Prospect interpod into West Central Graben illustrating lateral / updip seal risk Figure 10 Basin modelling results Upside Case open faults / high temperature source kitchen Figure 11 C1 Chalk prospect Figure 12 Ekofisk Chalk prospect seismic interpretation Page 1 of 11
1 Licence Information Licence Number: P2060 Licence Round: 27th Round Licence Type: Traditional Block Number: 29/06b Operator: Endeavour Energy Work Programme: Part I - Firm Commitment The Licensee shall: (a) Obtain and reprocess 500km of 2D seismic (b) Reprocess 100km 2 of 3D seismic data (c) Carry out Basin Modelling Studies; and (d) Undertake Seismic Inversion and Rock Physics Modelling Part II - Drill-or-drop The Licensee shall either: (a) Drill one well to 2500m or 30m into the Fulmar Formation, whichever is the shallower, or: (b) Elect to allow the licence to automatically cease and determine pursuant to clauses 3 and 6. It is hereby confirmed that DECC is free to publish the Report and that all third party ownership rights (on any contained data and/or interpretations) have been considered and appropriately cleared for publication purposes. 2 Licence Synopsis Licence P2060 is located at the eastern edge of the Western Platform of the Central North Sea (Figure 1). It was awarded as a traditional licence to Endeavour Energy UK Ltd. (Operator and 100%) in the UK 27 th Licensing Round, with a start date of 1 st January 2013. The application was made for block 29/06b (113km 2 ) and contained a number of Fulmar prospects / leads. The licence was awarded with a 4 year Initial Term and a firm work commitment of reprocessing 2D and 3D seismic data, rock physics modelling, seismic inversion and basin modelling. A drill or drop decision was required before 1 st January 2015. The drilling commitment was to test the Fulmar Formation at 2500m or 30m into the formation, whichever is shallower. The primary prospectivity identified at the time of the application was Edgecombe. A number of Fulmar leads were identified in the northern part of the licence. The work programme has confirmed the Edgecombe prospect and other leads identified in the 27th Round application. However, basin modelling demonstrates that Edgecombe lies within a migration shadow. Fulmar leads are either very small, or exhibit a similar very low chance of success. All firm commitments have been fulfilled, and as a result of the very high migration risk, Endeavour has decided to relinquish the license prior to the expiry date for the Initial Term. Page 2 of 11
P2060 License P2060 License Figure 1 P2060 License, regional framework, BCU depth 3 Work Programme Summary The Firm work programme was to : Obtain and reprocess 500km of 2D seismic Reprocess 100km 2 of 3D seismic data Carry out Basin Modelling Studies Undertake Seismic Inversion and Rock Physics Modelling 100m 2 of the Terracube 3D seismic data was re-processed to fulfil the work commitment and map the Edgecombe prospect. Re-processing improved data quality by removing multiples and improving reflector continuity, although it remains difficult to separate the Smith Bank Formation and Zechstein Salt (Figure 2). Figure 2 3D seismic, example final re-processing Page 3 of 11
Improved structural definition has resulted in a revised trap configuration for Edgecombe and an increase in recoverable resources. The reprocessing of the 2D seismic data gave a marginal uplift in seismic quality. Coloured Inversion was undertaken to aid Fulmar sand mapping and definition of potential migration pathways to Fulmar structures on the Western Platform (Figure 3). Unfortunately subsequent basin modelling studies concluded that Edgecombe is located within a migration shadow behind the main Western Platform bounding fault. Figure 3 Coloured Inversion arbitrary line 4 Database The main seismic data set used for the prospectivity evaluation was the full stack reprocessed Fugro Terracube (Figure 4) and Elf 1992 EC923F0003 datasets (both twt) and associated angle stacks (near, mid and far). These volumes were used for interpretation and seismic inversion. In the southwest of the block there is no 3D seismic coverage (Figure 4). 2D lines covering this area were obtained from DEAL, reprocessed and incorporated into the 3D interpretation (Figure 5). All released well data in the area of interest and beyond were incorporated into the evaluation, with a focus on the Jurassic section. For the geophysical studies the following wells were used: 29/07-4 29/11a-1 For the biostratigraphic study a total of 24 wells were analysed in blocks immediately adjacent to the license, including all wells in blocks 29/6 and 29/7 and key wells in blocks 29/1, 29/8, 29/11, 29/12 and 29/14. Page 4 of 11
Figure 4 Extent of Fugro Terracube 3D data across P2060 license (left) and area of final reprocessing across Edgecombe prospect (right) Figure 5 2D seismic database Page 5 of 11
5 Prospectivity Update The primary prospectivity identified at the time of the license application comprised the Upper Jurassic, Fulmar sand, Edgecombe prospect in the south of the block, and a number of small Fulmar leads in the northern part of the license (Figure 6). The key risk identified was migration from mature source areas in the West Central Graben onto the Western Platform. Figure 6 P2060 License Application Prospects and Leads Following remapping, Edgecombe, is now defined as a downthrown Fulmar Sand interpod prospect, top / base sealed by Kimmeridge Clay and Smith Bank mudstones. Fault seal is mapped to the north and south, but interpretation confidence is limited by the presence of salt within fault zones (Figures 7-8). The western bounding fault is poorly imaged due to a location on the edge of the 3D data and poor quality 2D datasets. Presence of thin, sub-seismic Fulmar and / or Skagerrak sands are now recognised as a potential thief zones updip to the west across this fault (Figure 9). Page 6 of 11
Figure 7 Edgecombe Prospect depth structure and trap configuration at Top Fulmar Formation 29/11-1 high Figure 8 North-south seismic line through Edgecombe Prospect interpod illustrating lateral / updip seal risk Page 7 of 11
Figure 9 Combined dip and strike seismic line from 29/11-1 high through Edgecombe Prospect interpod into West Central Graben illustrating lateral / updip seal risk There are no oil shows in nearby key wells and basin modelling studies indicate that only a very unlikely set of criteria could charge this part of the West Central Platform. Results indicate the most favourable Fulmar carrier bed geometries and migration pathway would charge the dry 29/11a-1 structure immediately south and updip of Edgecombe (Figure 10). Mapping of the Coloured Inversion dataset suggests structural and / or erosional isolation of carrier beds across the Curlew relay ramp between the West Central Graben and Edgecombe as the most likely cause of the migration shadow identified around the prospect. Figure 10 Basin modelling results Upside Case open faults / high temperature source kitchen Page 8 of 11
Remaining Fulmar leads identified within the northern part of the block at the time of license application were also evaluated as part of the work programme. Results indicate the presence of thin Fulmar in this area of the Western Platform and all identified structures are either very small and / or high risk (Figure 6). For all other leads and prospects, HIIP remains small and the chance of success did not improve with the work programme. A weak injected sand lead identified in the license application at the Early Tertiary level is similar to the dry 29/6-7z Odin prospect. There are no Tertiary shows in the license. A small dip closed Ekofisk Chalk prospect was identified in the north of the license above a salt high (Figures 11-12), but recoverable resources are small (~3MMbbls). Figure 11 C1 Chalk prospect Figure 12 Ekofisk Chalk prospect seismic interpretation Page 9 of 11
6 Further Technical Work Undertaken A detailed biostratigraphic evaluation of 24 wells within and immediately adjacent to the license was undertaken as part of the work programme, the interval studied extending from the Early Cretaceous to Middle Jurassic. Objectives of this project were to provide an integrated stratigraphic framework for well correlation and to derive a palaeo-environmental interpretation. In addition to the primary prospectivity identified at the Fulmar Sand level and the minor prospectivity outlined above in Section 5, a review of Palaeocene, Early Cretaceous, Triassic and Permian intervals was undertaken within the license, but no further prospectivity was identified. 7 Resource and Risk Summary The table below summarises the resource range and risks for all prospects identified in the P2060 Licence following the Firm work programme : Prospect Lead Discovery Name P Stratigraphic L Level D Resource and Risk Summary Unrisked Recoverable Resources Oil MMbls Gas BCF Low Central High Low Central High Edgecombe P Jurassic 5 20 75 0 4 16 8 2 C1 Chalk P Cretaceous - 3 - - 4-34 1 Table 1 P2060 Resource and Risk Summary Geological Chance of Success % Risked P50 Mmboe 8 Conclusions The prospectivity identified at the time of the license application has now been fully reviewed based on the commitment work programme. The primary Fulmar prospect (Edgecombe) has been re-evaluated, with the result that Mid and High Case recoverable resources have increased (currently 20-75 MMboe versus 10-26 MMboe at the time of the application). However, basin modelling now provides a comprehensive evaluation of the source maturity and migration history in this part of the Central North Sea and indicates there is no charge to the Edgecombe prospect, or leads in the northern part of the block. As a result of the significant increase in migration risk, P50 risked resources remain unchanged relative to the license application at 2 MMboe. No significant additional prospectivity is recognised within the P2060 License and in consideration of high migration risk, Endeavour has now elected to relinquish the license prior to the expiry date on the Initial Term. 9 Clearance It is hereby confirmed that DECC is free to publish the Report and that all third party ownership rights (on any contained data and/or interpretations) have been considered and appropriately cleared for publication purposes. Page 10 of 11