Tesorillo Project Presentation Spain June 2013
Highlights Two contiguous license areas total 38,000ha (94,000 acres), Cadiz province, southern Spain License contains 1956 Almarchal-1, which flowed gas from stacked porous & permeable conventional sandstones at shallow depths Large seismically defined structure Access to 40 gas pipeline with excess capacity 3km from well location ~USD14 spot gas price Thinly populated rural area, good relationship with local authorities & land owners Frac stimulation not required
Exploration History Exploration commenced early 1900 s First discoveries Cantabrian Basin Armentia gas (1959) and Ayoluengo oil & gas (1964) Offshore discoveries Cantabrian, Gulf of Valencia & Gulf of Cadiz basins in 1970 s Onshore gas discoveries in 1980 s in Guadalquivir Basin, the foredeep of the Betic Fold Belt; location of Almarchal-1 Guadalquivir Basin / Betic Fold Belt analogous to oil & gas productive Pannonian Basin / Carpathian Fold Belt, Romania Viura 2009 conventional gas discovery AAPG 2007
Almarchal-1 Drilled 1956/57 by Valdebro, 12 months to drill, many hole problems due to swelling shales, 4 sidetracks, gas flared from leaky surface casing for most of well duration Miocene Aljibe SS Gross interval 1180m (1030-2210m) Net reservoir >500m 39 DST s, most recovered small amounts of gas (max 93% CH4), little to no water 61 cores, 41 good quality porosity permeability measurements by IFP (Paris), good reservoir quality indicated Why such poor DST recoveries when reservoir quality is good? Core permeability max 10mD MW 10ppg MW 11ppg Core porosity max 26% DST13: flowed 7Mscf/d Gas DST5: rec 793m gas & mud DST6: rec 1055m gas & mud DST7: rec gas cut mud DST8: rec gas cut mud & fm water DST14, 19: swabbed mud & fm water DST21: rec 114m slightly gas cut mud DST12: rec 366m gas cut mud Reservoirs probably damaged by fresh water drilling fluids reacting with swelling shales in combination with heavy mud weights in excess of 11ppg DST23: rec 274m gas cut mud DST27: rec 76m gas cut mud Twin of Almarchal-1 to be drilled & tested with inhibited mud system to protect reservoirs & ensure best quality gas rates MW 13ppg TD 3462m DST36: flowed 5Mscf/d Gas
DST Results Almarchal-1 Miocene Aljibe SS Gross interval 1180m (1030-2210m) Net reservoir >500m Flowed gas DST13: flowed 7Mscf/d Gas Recovered gas-cut mud Recovered gas-cut mud & fm water DST5: rec 793m gas & mud DST6: rec 1055m gas & mud DST7: rec gas cut mud DST8: rec gas cut mud & fm water DST14, 19: swabbed mud & fm water DST21: rec 114m slightly gas cut mud DST12: rec 366m gas cut mud Recovered gas-cut mud DST23: rec 274m gas cut mud DST27: rec 76m gas cut mud Flowed gas DST36: flowed 5Mscf/d Gas
Thick Gas Columns Almarchal-1 Miocene Aljibe SS Gross interval 1180m (1030-2210m) Net reservoir >500m DST13: flowed 7Mscf/d Gas DST5: rec 793m gas & mud DST6: rec 1055m gas & mud DST7: rec gas cut mud DST8: rec gas cut mud & fm water DST14, 19: swabbed mud & fm water DST21: rec 114m slightly gas cut mud DST12: rec 366m gas cut mud DST23: rec 274m gas cut mud High gas shut-in pressures indicative of >400m gas columns DST27: rec 76m gas cut mud DST36: flowed 5Mscf/d Gas
Structure Almarchal-1 well location selected on basis of field geology and gravimetry, no seismic Valdebro also drilled Puerto de Ojen-1 (1957), Tarifa-1 (1966) & Tarifa-2 (1966) Puerto de Ojen-1, like Almarchal-1, encountered good gas shows in >1000m gross Aljibe SS section but could not be tested due to mechanical problems 1978 one poor quality 2D regional line (not available) 1991 Repsol / CGG 2D seismic acquisition, 4 lines, 61 line km, poor quality Massive structure, multi TCF GIIP indicated
Next Steps Prepare to permit Tesorillo-1 Well Design drilling & completion to minimise reservoir damage, evaluate drilling expertise in-country to achieve this Seek expressions of interest from parties with local knowledge and/or drilling / completion / commercialisation expertise Thinly populated rural area, existing wind farm developments, good relationship with local authorities & land owners
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