Relinquishment Report Licence P421 Block 21/20b Centrica North Sea Oil Ltd Shell UK Ltd May 2013 Disclaimer No liability whatsoever is accepted and no representation, warranty or undertaking, express or implied, is or will be made by Centrica plc or any of Centrica plc's subsidiaries, or any of their respective agents, being their directors, officers, employees, advisers, representatives or other agents, for any information, projections or any of the opinions contained in this report or for any errors, omissions or misstatements in this report. Neither Centrica plc nor any of Centrica plc's subsidiaries, nor any of their respective agents makes or has authorised to be made any representations or warranties (express or implied) in relation to any of the matters described herein or as to the truth, accuracy or completeness of this report, or any other written or oral statement provided. This report shall not be deemed to be an offer to sell or invitation to invest in Centrica plc or any of its assets and no information set out in this report is intended to form the basis of any contract, investment decision or any decision to purchase or invest in any such assets. Neither Centrica plc nor any of Centrica plc's subsidiaries nor any of their respective agents undertakes any obligation to provide any recipient with access to any additional information or to update or correct any inaccuracies in or omissions from this report. This report should not be considered as a recommendation by Centrica plc or any of Centrica plc's subsidiaries or any of their respective agents to invest in any securities (including, without limitation, those issued by Centrica plc) or any other assets. Recipients should rely solely on their own judgement, review and analysis in evaluating the information set out herein.
Table of Contents 1. Licence Information... 1 2. Synopsis... 1 3. Exploration Activities... 2 3.1 Seismic... 2 3.2 Wells... 2 3.3 Studies... 3 4. Prospectivity Analysis... 3 4.1 Christian... 3 4.1.1 Trap type... 3 4.1.2 Reservoir... 3 4.1.3 Seal... 4 4.1.4 Remaining risks/chance of success... 4 4.2 Christian Deep... 4 4.2.1 Trap type... 4 4.2.2 Reservoir... 4 4.2.3 Seal... 4 4.2.4 Remaining risks/chance of success... 5 5. Reserves Summary... 5 6. Maps and Figures... 6 7. Clearance... 12 i
Table of Figures Figure 1: Location map showing Christian P421; outline of block 21/20b in red.... 6 Figure 2: A map showing interpreted Top Christian Sandstone in depth (TVDSS) with key faults. Block outline of 21/20b overlain. Approximate lines of section shown.... 7 Figure 3: A map showing interpreted Top Puffin Sandstone in depth (TVDSS). Block outline of 21/20b overlain. Approximate lines of section shown.... 8 Figure 4: An example West-East seismic section through 21/20b illustrated using the relative acoustic impedance volume.... 9 Figure 5: An example North-South seismic section through 21/20b illustrated using the relative acoustic impedance volume.... 9 Figure 6: An illustrative West-East section through 21/20b... 10 Figure 7: An illustrative North-South section through 21/20b... 10 Figure 8: A map showing Base Christian sands in TWT. Maximum amplitude surface attribute of Relative Acoustic Impedance volume overlain to show distribution of Christian sands (reds and yellow indicate possible sand presence, 30 ms TWT window above surface)... 11 ii
1. Licence Information Licence Number P421 Licence Type Traditional, 8 th Round Single block licence awarded on 23rd Jan 1983 (6+30 year terms; expiry January 2019) Block Number 21/20b Licensees Centrica North Sea Oil Ltd 50% (Operator) Shell UK Ltd 50% Licence Determined 1 st April 2013 by letter from Secretary of State 2. Synopsis Licence P421 comprising block 21/20b was awarded in the 8 th Round of licensing to a 50%- 50% partnership of Shell-Esso. Many changes occurred in the structure of the licenceholding partnership, ultimately leading to Centrica and Shell each holding 50% equity in 2012. Three wells were drilled on the licence (21/20b-3, 4Y and 6Z). At the time of relinquishment, the licensed area included only one of these, the Christian discovery well 21/20b-4Y (drilled in 1990). The licence was declared fallow in September 2003 and partial relinquishments were made, reducing the licence area to its final shape which included only the Christian discovery. Coordinates of the licence area at the time of relinquishment are provided in Figure 1. Christian was declared a Fallow Discovery in January 2009 and a rescue plan was agreed, allowing the licence to be retained pending results of Bligh well 21/20d-8. It was hoped that this well would provide insight about untested upside on the Christian structure within a deeper Puffin Sandstone target (Christian Deep). Following the Bligh appraisal well, the Partnership decided that insufficient information had been gained to allow the commitment to a Christian FDP that would be required to retain licence P421. All work commitments on the licence having been met, the decision was taken, with approval by partners, to relinquish the licence. 1
3. Exploration Activities 3.1 Seismic The Christian discovery is fully covered by the following datasets licenced by the operator: PGS Megasurvey Regional dataset purchased after Senergy 2008 work Fugro2005 PSTM 3D regional coverage 2005 Greater Kittiwake 3D merge/reprocessing Christian covered by merge of EO1990 3D & Shell E91100 3D 40ms bulk shift required Used as the basis for an AVO inversion carried out by Fugro Jason in 2007/2008. Final products were P-Impedance, S-Impedance, Density, and VpVs, together with bandlimited equivalents. The bandlimited P-Impedance was used for interpretation of the Christian Sand, for insights into sand thickness and distribution not apparent from the previous reflectivity data. VeritasDGC 2000 PSDM TWT & depth volumes 2000 reprocessing of EO 1990 3D 70 o phase rotation applied Judged to have superior resolution to the 2005 Fugro data reflectivity data 2003 HFI 3D 3.2 Wells Three wells were drilled on licence P421 (21/20b-3, 4Y and 6Z). At the time of relinquishment, the licensed area included only the Christian discovery well 21/20b-4Y, drilled by Shell in 1990-91. Oil was encountered in the HPHT Upper Jurassic Christian turbidite sandstones (137ft gross, 46 ft net) and a test produced oil at a rate of 6,200stb/d. Reservoir pressure was 11,200 psi and temperature 320 F. The well failed to reach the deeper Puffin sandstone owing to losing the BHA. The suite of well logs includes sonic and density from approximately 3000 ft MD to TD (the lowest 375 ft could not be logged owing to leaving the BHA in the hole). 2
3.3 Studies Between 2008 and 2009 Senergy performed a full re-evaluation of the Christian discovery which included thorough re-mapping following reprocessing of the 2005 Fugro 3D merge/prestm carried out over the Greater Kittiwake Area. Evaluation of the 21/20b-4y Christian Discovery; J06VEN01A, September 2007 Christian Field Geophysical Review of the Pimpedance dataset, and model rebuild; J06VEN01A, April 2008 Christian Field Integrated Evaluation; J06VEN01A, December 2008 4. Prospectivity Analysis Prospectivity in the area has been established in four intervals by drilling: Palaeocene Forties Sands (21/20a-1 Morgan Prospect) Kimmeridgian Turbidites (Christian Sands, in 21/20b-4Y Christian discovery) Late Jurassic Ryton Sands (Fulmar Sand equivalent, in 21/20a-2 Cook Field, and 21/20b-4Y) Base Late Jurassic Puffin sands (21/20a-5 Bligh discovery). The drilling of the 21/20b-4Y and 21/20a-5 wells discounted the likelihood of commercial hydrocarbon in Forties and Maureen equivalent sands; thus prospectivity in 21/20b is limited to Late Jurassic sediments the Kimmeridgian Christian turbidites, Fulmar/Ryton Sands and the deeper Puffin/Pentland Sands. 4.1 Christian The Christian oil discovery is an HPHT oil accumulation discovered by well 21/20b-4Y drilled in 1990. The well encountered 137 ft gross of oil bearing Kimmeridgian turbiditic sands, referred to as the Christian Sand Unit. These Kimmeridge sands are over-pressured and tested 6,200 stb/d of 42 API oil. No oil water contact was encountered. Reservoir conditions are estimated to be 11,220psia and 320 F at 13,475ft TVDSS. Typical shallow marine shoreface Fulmar sands were encountered below the Christian Sand unit. The accumulation also extends into Block 21/20d. 4.1.1 Trap type The trapping style is a salt induced structural four-way dip closure in the base case. There remains the potential for an upside case of off-structure stratigraphic trapping in the Christian Sand reservoir. Significant faulting has been mapped in the northern part of the structure. 4.1.2 Reservoir Analysis of the well logs show the Christian Sand unit to be interbedded sands and clays, with sand beds typically less than 20 ft thick abruptly intercalated with clay beds less than 8 ft in thickness. This signature is interpreted to be the result of sedimentation by mass transport, either debris flows or more classic turbidites. Mapping suggests that the sands appear to have entered the system from the northwest then fanned out east and south into the basin. 3
The age of the Christian Sands is Early Kimmeridgian, between the Baylei and Eudoxus MFS (J62). Significant sands of this age are not seen in the other block 21/20 wells. Average reservoir properties are 34% Net:Gross and 13.1% porosity. 4.1.3 Seal The seal is interpreted to be the overlying and underlying Kimmeridge Clays. 4.1.4 Remaining risks/chance of success The 21/20b-4Y well has proven and tested a modest hydrocarbon volume in Christian Sands in a 4-way closure. The remaining risk for on-structure Christian Sands is variability in reservoir thickness and quality. The main risks for the Christian Sand stratigraphic upside case are trap integrity, sand distribution and reservoir quality. Mapping based on a relative acoustic impedance seismic volume has been used to infer the possible extent of the Christian Sands stratigraphic trap, however this is not definitive. There is also uncertainty in the depth of the Christian Sands oil-water contact; 21/20b-4Y encountered an oil-down-to at 13,497 ft TVDSS. 4.2 Christian Deep The 21/20b-4Y well was terminated due to mechanical problems before the deeper target, the Puffin Formation sand, was reached. Hence, this reservoir remains as untested upside potential, particularly in the light of the discovery of retrograde gas-condensate in the Puffin sand in the 21/20a-5 Bligh well, 5 km to the southeast. 4.2.1 Trap type The trap at Christian Deep is mapped as a four way dip closure spilling to the west. 4.2.2 Reservoir The main reservoir potential lies in the Puffin Sands. These are shallow marine shoreface sandstones which have a strong diagenetic overprint. The sands are Middle Oxfordian age. In 21/20a-5 they rest discordantly on Middle Jurassic Pentland Formation. The Puffin Sands are believed to be developed in a confined, elongate north-northwest to south-southeast trending trough coincident with today s West Central Graben, bounded by the Western Platform to the west and the Forties-Montrose High to the east. The depositional model suggests that the Puffin should thicken towards the east and south, thus the Puffin character should be similar or slightly poorer than seen at Bligh. The sands of the Pentland section are generally thin, low NTG deposits of fluvio-deltaic character. The coal bearing sequences are assigned to the Middle Jurassic. Again, the facies are considered to thicken and develop more marine influence towards the southeast. 4.2.3 Seal The seal is inferred to be the overlying Puffin and Heather shale sequences. They are inferred to be sealing and pressure independent of the shallower Fulmar shoreface unit encountered within 21/20b-4Y. 4
4.2.4 Remaining risks/chance of success The presence of Puffin Sand reservoir in Christian, deeper than the TD of 21/20b-4Y, may be inferred by analogy with offset Bligh wells. However its presence is not proven, and reservoir thickness and quality are uncertainties. The key risks for the Puffin Sand prospect are seal failure due to overpressure, and the reservoir quality and extent. The geological model predicts thinner and poorer quality reservoir rock at Christian Deep than in Bligh. 5. Reserves Summary The Christian discovery has the following recoverable hydrocarbons figures attributed to it: Liquids (mmbo) Associated gas (bcfg) Total (MMboe) P90 3.1 5.0 4.0 P50 3.9 6.2 5.0 P10 7.7 12.2 9.8 R:\CNNS\Assets\Q21\21_20 Christian Bligh Cook\0 Christian\01 Meetings\1.4 Other Internal\2013\1) Subsurface review and recommendation 1Mar13\Christian Subsurface Review_1Mar13.pptx The above table refers to volumes in the Christian Sandstone turbidites within the 4 way dip closure only, however includes the entire prospect volume which extends from 21/20b (P421 Christian) into 21/20d (P185 Bligh). It should be noted that approximately 38% of volumes lie within 21/20b; 62% lies in 21/20d. Although it is acknowledged that the potential exists for an upside stratigraphic trap, this was not carried forward for base case economics. Therefore, no recovery has been assigned to the Christian sandstones in a potential stratigraphic trap. No volumes from the untested Puffin interval have been assumed. 5
6. Maps and Figures Figure 1: Location map showing Christian P421; outline of block 21/20b in red. The licence area at the time of relinquishment was defined by the following coordinates (ED50 datum latitude/longitude): 1) 57 deg 26 min 0 sec N, 0 deg 51 min 0 sec E 2) 57 deg 24 min 0 sec N, 0 deg 51 min 0 sec E 3) 57 deg 24 min 0 sec N, 0 deg 55 min 0 sec E 4) 57 deg 26 min 0 sec N, 0 deg 55 min 0 sec E 1) 57 deg 26 min 0 sec N, 0 deg 51 min 0 sec E 6
Outside mapped sand fairway B A A B Figure 2: A map showing interpreted Top Christian Sandstone in depth (TVDSS) with key faults. Block outline of 21/20b overlain. Approximate lines of section shown. 7
B A A B Figure 3: A map showing interpreted Top Puffin Sandstone in depth (TVDSS). Block outline of 21/20b overlain. Approximate lines of section shown. 8
Figure 4: An example West-East seismic section through 21/20b illustrated using the relative acoustic impedance volume. Figure 5: An example North-South seismic section through 21/20b illustrated using the relative acoustic impedance volume. 9
Figure 6: An illustrative West-East section through 21/20b Figure 7: An illustrative North-South section through 21/20b 10
Outside mapped sand fairway Figure 8: A map showing Base Christian sands in TWT. Maximum amplitude surface attribute of Relative Acoustic Impedance volume overlain to show distribution of Christian sands (reds and yellow indicate possible sand presence, 30 ms TWT window above surface) 11
7. Clearance Partners have reviewed this document and verified that DECC is free to publish it. All 3rd party ownership rights (on any contained data and/or interpretations) have been considered and appropriately cleared for publication purposes. Seismic figures are based on TerraCube PSTM data supplied courtesy of Robertson GeoSpec International Limited ( TerraCube is a registered trademark of Robertson, a CGG company). 12