Valiant Causeway Limited, March 2013
1. Header Licence Number: P1834 Licence Round: 26th Round Licence Type: Traditional Block Number: 204/21, 22b, 23b & 26a Partners: Valiant 100% (Operator) 2. Synopsis P1834 is a traditional 26 th Round Licence, which commenced on 10 th January 2011. P1834 consists of West of Shetland blocks 204/21, 22b, 23b & 26a, as shown by Figure 1. Valiant held a 100% equity interest. Figure 1. Location of licence P1834 The terms of the licence included: Obtain and reprocess 600km 2 of 3D seismic data which was completed Q1 of 2012 by Geokinetics and comprised reprocessing 3 legacy 3D surveys through comprehensive PSTM sequence. The output area of the reprocessing was 706 km 2 as shown on Figure 2.
Figure 2. Processing Area Drill one well to 1700m TVDSS or 40m into the Basement, whichever is the shallower, or elect to allow the licence to automatically cease on the second anniversary of the award date. The firm licence commitments have been fulfilled. Valiant made the decision not to continue the licence beyond the 2 nd year in accordance with the two year drop commitment. 3. Exploration Activities Initial evaluation of the P1834 area in the 26 th licensing round application identified leads in the Lower Cretaceous, Basement, and Upper Cretaceous/Palaeocene. Seismic interpretation and mapping was carried out over the southern Judd Basin and Judd High area. Analysis of 3D seismic and well data indicate the main potential in the area to be associated with Palaeocene, Lower Cretaceous and Upper Jurassic sands, and fractured basement. Although some Palaeocene potential exists in the licence area, most of the recognised hydrocarbon occurrences are associated with Jurassic and Cretaceous sand pinch-out traps on the flanks of the Judd High. The quality of existing seismic data precludes the confident identification of Palaeocene traps on amplitude response alone. The Trool lead at Palaeocene, T10 level sands was drilled in a down-dip position by well 204/22-2 encountering oil shows. Detailed interpretation was carried out for 3 levels: Basement, BCU, Cromer Knoll. The BCU was used to define the structure of Rona sand reservoir, known to be present in the area. The Cromer Knoll pick was used to delineate the top of the Neptune sand (present in well 204/26A-1). The lateral extent of the BCU and Cromer Knoll horizons was limited to the area of potential traps at Jurassic (Rona sand) and Cretaceous (Neptune sand) levels. Basement was picked over the full application area.
The quality and resolution of the seismic data is insufficient to allow recognition of the Cretaceous and Jurassic sand pinch-out limits which may continue onto the highs or be truncated on the basement high flanks. Evidence from a number of wells show that Mesozoic sand found on the tops of the basement highs cannot be confidently mapped on seismic data. Jurassic age Rona sands are found on the basement structural highs drilled by wells 202/3A-3, 204/29-2, 205/26-1. 4. Prospectivity Analysis The Trieg lead lies on strike to the SW of the Lancaster and Whirlwind fractured basement discoveries. The Lancaster discovery is an analogue to the Trieg lead. The basement play lies within the Rona and Judd ridges and is potentially charged from the Judd Basin to the NW, across the large scale fault terraces towards the Rona ridge high. Also there is potential for thin Jurassic and Lower cretaceous sands over the top of the Rona ridge and Judd high (Figure 3). Figure 3. Structural setting showing licence P1834 Reservoir Presence: The main play in blocks 204/21, 204/26 and 204/28b is the fractured basement cored high with either overlapping or pinch-out of Upper Jurassic Rona sands or Lower Cretaceous, Neptune sands (Figure 3). This play is represented by the leads Tulla and Treig (Figure 4). In addition the Trool lead is recognized in block 204/27b in the form of a Palaeocene T10 sand channel pinch-out. Source, Seal and Migration: A 1-D basin modelling study was carried out by IGI at the request of Valiant Petroleum over the whole of the Faroe-Shetland Basin, focusing on the Judd, Solan, West Shetland and Foula/Flett Basins. The study included a review of 1122 samples with geochemical data from 31 carefully selected wells. The data was either obtained from the CDA or Robertson s database.
Two important oil-prone source rocks were identified: The Upper Jurassic Kimmeridge Clay Formation and the Middle Jurassic Judd Formation. The Kimmeridge Clay source rock is proven by at least 30 well penetrations and represents marine mudstone deposited in anoxic conditions. In comparison, the Judd source rock represents algal prone lacustrine claystones which are likely to have a more localised distribution across the study region. A summary of source rock properties is given in Table 1. Source Rock Type Kerogen TOC % HI mg/g Kimmeridge Clay Judd Formation Algal/bacterial derived Type II <10% <415 Algal derived =waxy Type I <6% <800 Table 1. Source rock properties Faroe-Shetland region The Kimmeridge Clay is generally more organic rich than the Judd Formation but it is the latter that has a higher HI and S2 (pyrolysis yield). As a result, the Judd formation is more oil prone while the Kimmeridge Clay is more gas/condensate to oil/gas prone There are two main potential top seal lithologies in the Judd Basin: claystones of the Late Cretaceous and Palaeocene hemipelagic mudstones which overlay and separate stacked turbidites and channel slope fans. These seal a variety of reservoirs where they drape highs or overlie pinch-outs and also provide intra-formational sealing for Cretaceous and Palaeocene sands. Most of the recognised hydrocarbon pools in the Judd Basin area exhibit gas chimneys and are typically not filled to spill point. The gas chimneys are most probably associated with transient seal failure and degassing during basin inversion but all these features point towards a seal capacity limit particularly for the Vaila Formation shales. Trap Type: Around the Judd High the predominant trap type is a 4-way or 3-way drape of a basement high alongside a fault. The leads identified with this closure geometry lie on the down thrown side of the fault and depend on sealing of the basement in the footwall for entrapment of commercial volumes. Sand-filled, slope channels of the Vaila Fm pinch-out southwards onto the Judd high and set up a second stratigraphic trap type proven by the well 204/23-2, the Foinaven SW discovery.
Figure 4. Lead location map for Blocks 204/21, 204/26, 204/27b and 204/28b 5. Prospect and Lead Inventory Trieg Lead This lead is located on the Northern, downthrown flank of the major E-W trending basement fault (Figure 4, and 5). A well, 204/26-1a, was drilled on the southwest flank of this lead in 1995 and although dry, encountered 30m of sandstone in the Cromer Knoll. Charge: Hydrocarbon charge for the lead has been supplied from the Judd Basin immediately to the North, where Upper Jurassic Kimmeridge Clay is buried to sufficient depth and a second source middle Jurassic rock is also mature. This is confirmed by the number of hydrocarbon discoveries along the southern basin margin and confirmed by the recent basin modelling study undertaken by Valiant Petroleum.
Trap and seal: The lead is identified both on Cromer Knoll and basement level as a 3-way dip closure sealed from the south by a major basement fault (Figure 5). Within this 3-way dip closure there is a substantial 4-way dip element. The top seal is formed by thick mudstones of Lower Palaeocene. Risk: The main risk for the Treig lead is associated with the presence of Cretaceous reservoir over the structural high. This is very thin on seismic and is potentially absent over the Treig high. Apart from the sands in the 204/26-1a well the Cromer Knoll is largely mud prone in other nearby wells and there is therefore a risk any sands may be of poor quality or absent. The COS of Treig lead is placed as 17% Reserves: The Treig lead straddles the boundary of 2 blocks, 204/21 and 204/26. Basement reservoir GRV is calculated using the OWC established for the Cromer Knoll level. The GRV is very small and no commercially viable reserves are identified in the basement. STOIIP and reserves for the Treig lead are summarized in Table 4. Prospect Treig (Cretaceous) P10 P50 P90 Mean GRV (acre feet) 495301 388200 189921 N:G % 45.0 35.0 25.0 Porosity % 22.0 19.0 15.0 Sw % 35.0 25.0 15.0 FVF Bo 1.32 1.17 1.10 GOR scf/bbl 650.0 325.0 150.0 RF % 45.0 35.0 25.0 STOIIP mmstb 150 112 79.6 114 Recoverable Reserves mmstb 54.2 39 26.8 39.9 Associated Gas bcf 22.9 14.1 8.2 15.0 Table 4 Treig Lead - STOIIP and reserves.
Figure 5. Top Basement depth structure Tulla Lead The Tulla lead is located on the up-thrown, south-western flank of a major basement fault block (Figure 5). Although this is an interesting lead only 4% (Figure 4) of the lead lies in the relinquished acreage. Reservoir Characterisation: The primary reservoir in the lead is formed by Upper Jurassic Rona sand, which is penetrated in the vicinity of the lead area by Well 204/28-1. This well found mobile hydrocarbons in Rona sands at the depth of 1870mSS. The hydrocarbon column continues to the well TD in the basement at 1949mSS. The fractured basement forms a secondary reservoir in the Tulla lead. Both Rona sand and Basement reservoirs were tested, with heavy oil (13 degree API) reported in Rona sand and lighter oil (24 o API) reported in the basement reservoir. However, the basement and Jurassic reservoirs are most likely connected.
Charge: Hydrocarbon charge for the lead has been supplied from the Judd Basin immediately to the North, where Upper Jurassic Kimmeridge Clay is buried to sufficient depth and a second source middle Jurassic rock is also mature. This is confirmed by the number of hydrocarbon discoveries along the southern basin margin and confirmed by the recent basin modelling study undertaken by Valiant Petroleum. Trap and Seal: The Tulla Lead is formed by the laterally extensive structural high at the basement and BCU levels. The lead is 3-way dip closed and fault sealed from the North-East. Fault seal is robust, because Palaeocene units juxtaposing Jurassic and basement in the lead are dipping to the North-East. The top seal is formed by a thick pile of Lower Palaeocene mudstones. Risk The main risk for Tulla is the potential for oil biodegradation making the oil field development technically challenging and recovery factors highly uncertain. Additional risk is associated with the extent and thickness of Upper Jurassic Rona sands over the laterally extensive prospect area. The uncertainty in sand distribution over this area is due to limited seismic quality. The COS of Tulla lead is estimated at 12-13% Reserves: The reserves calculation has been based on oil-water contact defined by the BCU map spill point at ~2010m to the North-East along the fault. This spill point lies above the WUT at 2027mSS in the Rona sand in Well 204/27A-1. Although Rona sand in 204/28-1 has high N:G at ~60%, substantial uncertainty exists over the distribution of sand over the laterally extensive Tulla closure. Therefore, for reserves calculation the Mid case N:G was reduced to 30% and the N:G for the Min and Max cases were set at 20% and 40% respectively. An OWC of 2000m was used for the maximum case, 1950m for medium case and 1900m for the minimum case. The Jurassic and Basement reservoirs have been assumed to be connected and the same OWC cut-offs were used for both the Jurassic and Basement GRV calculations. However only 4% of these volumes lies within the relinquished acreage.
Prospect Tulla (Jurassic) P10 P50 P90 Mean GRV (acre feet) 3604561 2999514 1645132 N:G % 40.0 30.0 20.0 Porosity % 30.0 26.0 20.0 Sw % 30.0 25.0 20.0 FVF Bo 1.32 1.17 1.06 GOR scf/bbl 650.0 325.0 56.0 RF % 40.0 25.0 5.0 STOIIP mmstb 1261 945 682 961 Recoverable Reserves mmstb 344 218 116 225 Associated Gas bcf 135 70.2 29.6 77.5 Prospect Tulla (Basement) P10 P50 P90 Mean GRV (acre feet) 4090929 2366813 1260338 N:G % 12.0 7.0 3.0 Porosity % 22.0 19.0 15.0 Sw % 35.0 25.0 15.0 FVF Bo 1.32 1.17 1.06 GOR scf/bbl 650.00 325.00 56.00 RF % 40.0 25.0 5.0 STOIIP mmstb 260 165 99.5 173 Recoverable Reserves mmstb 67.7 37.4 18.1 40.7 Associated Gas bcf 25.7 12.1 4.74 14 Table 6. Tulla Lead STOIIP and reserves Trool Lead The Trool lead is a T10 Palaeocene channel amplitude anomaly within a 3-way pinch-out located along the southern margin of the Judd basin, up dip from well 204/22-2.(Conival, Figure 4 and 6). This well found T10 age sands with good oil shows but flowed water on testing. Trap and Seal: The trap is formed by the lateral limit of the T10 sand channel pinching out up-dip. The channel runs almost east/west and pinches out to the north and south and onlaps the basement high to the East. The western edge of the trap is controlled by structure with the amplitude anomaly associated with the channel having reasonable structural conformance. The top seal is provided by a thick shale that sits on top of the T10 sands seen in Well 204/22-2z. The base seal is interpreted as the thick shale sequence of the Upper Cretaceous Shetland Group. Charge: The Jurassic source is expected to be oil generative for this prospect. The evidence of hydrocarbons migration into the lead is given by the oil shows in well 204/22-2 down-dip of the Trool lead channel.
Reservoir Characterisation: The reservoir is identified as T10 age sands that are expected to be similar to those seen from the petrophysical evaluation of 204/22-2Z. General porosity and N: G parameters are estimated from local well control to be in the range 12-16% and 25-35% respectively. Risk The main risk for the Trool Lead is identified as the side seal to the north and south of the channel formed by the channel edge. This is in part mitigated by the shape of the amplitude anomaly. The COS of the Trool lead is estimated at 11% Reserves: The GRV calculation for the Trool lead is based on the slab model truncated by WUT at 204/22-2z (3650m). Prospect 204/22 2 Trool prospect (T10) P10 P50 P90 Mean GRV (acre feet) 691895 576797 461263 N:G % 35.0 30.0 25.0 Porosity % 16.0 14.0 12.0 Sw % 30.0 25.0 20.0 FVF Bo 1.57 1.25 1.15 GOR scf/bbl 150.0 350.0 1100.0 RF % 50.0 40.0 30.0 STOIIP mmstb 127 106 88 107 Recoverable Reserves mmstb 52.9 42.2 33.5 42.8 Associated Gas 36.6 21.2 11.6 22.9 Table 7 Trool Prospect reserves
Relinquishment Report Figure 6. Kettla Tuff Depth Map showing location of Trool Lead 6. Clearance Valiant confirms DECC is free to publish this report and that all third party ownership rights have been considered and appropriately cleared for publication purposes. The seismic data is held under licence and is the property of PGS. Valiant Causeway Limited March 2013