Making the Most from UKCS Exploration Simon Toole Director – Licensing, Exploration &...

Making the Most from UKCS Exploration

Simon TooleDirector – Licensing, Exploration & Development

Prospex Fair 11/12 Dec 2007

• UKCS Undiscovered Resource Potential

• Fallow Process Success

• Promote Licence Statistics

• Licensing and 25th Round

• West of Shetland Task Force

• BERR 2007 Promote CD

• DEAL Data Release

Creaming Curve Analysis

Least Mature

0

50

100

150

200

300

4-8 8-16 16-32 32-64 64-128 128-256 256-512 512-1024 1024-2048

P50 unrisked recoverable resources (MMBOE)[Only leads with >=5% Chance of Success used]

Southern North Sea / Irish Sea

Nu

mb

er o

f le

ads

250Northern North Sea

West of Shetland

Central North Sea

Ave

rag

e ch

an

ce o

f su

cces

s (%

)

0

2

4

6

8

10

12

14

18

16

Undiscovered Oil and Gas Resources in the UKCS shown at different levels of Geological Risk

0

5000

10000

15000

20000

25000

0 5 10 15 20

Geological Chance of Success Cutoff (%)

millio

n b

oe

upper estimate

central estimate

lower estimate

Level for BERR

estimate

Potential Undiscovered UKCS Resources

Approx 9.4 bn boe - 3.4 WOS/S - 0.8 NNS - 4.5 CNS - 0.7 SNS

WOS

SNS & EIS

0.3

3.4

Incl leads > 20% COS

Incl leads > 5% COS

CNS

NNS

0.20.7

0.80.2

1.2

4.5Basin Creaming Curves

vs Lead Database

(bn boe)

?UKCS Creaming Curvevs Lead Database 2 bn

9 bn

Incl leads > 20% COS

Incl leads > 5% COS

(bn boe)

Status of 148 released blocks still under evaluation

Activity is on the way – 43 subareas

BR wells committed

FDP in preparation

BR plan in progress

Relinquishment on the way – 52 subareas

Relinquishments are being processed,

BR Drop decision made

Currently under discussion – 53 subareas

Previously drilled but now fallow again

or proposing rescue work plan

or making rescue Drill or Drop decision

Status of other 155 Fallow Discoveries (current, but some decisions to end 2007 still changing)

Discovery too small – 19

(now just part of fallow block)

Class A – 72

(Pre-development feasibility studies, Well or new seismic AFE'd

Significant studies, Infrastructure full or none available)

Class B – 52

Under discussion (mixture of newly identified and released on website)

Fallow class BR - 12

Rescued with firm plan for activity

Traditional Vs Promote Licences - Observations from 21, 22 & 23rd Rounds

• Overall similar # licences drilled (21 Prom, 24 Trad).• Anticipated drill rate (full cycle 21st Round) – Trad 13/35

(37%), Prom 16/54 (30%).• As expected, # of Promote wells build later in licence (farm

out required, need to shoot seismic). Associated rig & new seismic time pressure.

• Quick cycling via tough Promote 2 year ‘continuation’ point – typically 40% go through based on ‘firm wells’ or ‘new seismic + contingent well’.

• Overall Promote potentially commercial success rates:

– Exploration wells ~ 30%

– Appraisal wells ~ 70%

Licensing Strategy

• Annual Rounds

• 25th Round early 2008

• Cumulative Acreage

Incl. SEA 7

• Focussed Terms

Traditional

Promote

Frontier

7

8

6

5

4

3

2

2

1

WEST OF SHETLAND TASKFORCE

http://www.og.dti.gov.uk/UKpromote/wos_task.htm

Area of high exploration activity potential

Industry/Government TaskForce addressing gas infrastructure needs

30+ companies with interests in WOS

Ca. 60 licences WOS

West of Shetland Activity

2007 Promote CD

Promote CD Opportunities

44 Leads & 5 Discoveries

Maps, Stratigraphic columns and Cross Sections

In Place and Reserve Estimates Play summaries

CD available at DTI stand

West of Britain North Sea

Unlicensed Opportunities

5 Leads: (Est Reserve Range)A - 33-51-76 mmboB - 12-19-31C - 17-26-37D - 9-14-20E - 10-16-24

1 Discovery (21/24-4):Untested 35 ft net reservoir17-27-41 mmbo

Multiple Opportunities - 21/24

One of the largest undrilledUKCS structures:

High Risk with Potential reserves of

1.4 - 2 - 2.8 billion barrels

West of Britain 214/1