23 26f relinquishment reportv2 - Oil and Gas Authority · PDF file · 2015-08-06Block 23/26f Relinquishment Report Relinquishment Report ... The high pressure high temperature (HPHT)

BG International (CNS) Limited Block 23/26f Relinquishment Report

Relinquishment Report – 22/15a Page 1 of 7

Relinquishment Report

Licence P1585

Block 23/26f

25th Round Traditional Licence Award

BG International (CNS) Limited (Operator): 100.0%

Disclaimer

No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this Relinquishment Report and no responsibility or liability is or will be accepted by BG CNS Limited ("BG") or any of its respective subsidiaries, affiliates and associated companies (or by any of their respective officers, employees or agents) in relation to it. Any liability in respect of the foregoing is hereby expressly disclaimed.

This Relinquishment Report contains forward-looking statements (statements that are not historical facts and relate to future performance or prospects) concerning, among other things the prospects of certain properties, areas or formations for production. Although BG believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. No representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by BG or any of its respective subsidiaries, affiliates and associated companies (or by any of their respective officers, employees or agents) that any projections, forecasts, or opinions should or will be achieved. BG undertakes no obligation to update any forward-looking statements or to provide the recipient with access to any additional information.



Synopsis

The P1585 licence is a twenty fifth round licence for block 23/26f awarded in February 2009 to BG (100%) with an initial four year term culminating in a drill or drop decision by February 2013. In January 2013 BG secured a 9 month extension to the drill or drop decision to 11th November 2013 and subsequently relinquished the licence on this date. The 23/26f licence work program has been completed and the remaining prospectivity fully evaluated.

Figure 1: Block 23/26f Location Map with Fields and Discoveries and onblock remaining propsectivity

Exploration Activities

A total of 4 wells have been drilled on what is now the 23/26f block (23/26a-9, 23/26a-11, 23/26a-17 and 23/26a-21). None of these wells were drilled within the P1585 licence term.



BP drilled 23/26a-11 and 23/26a-17 in 1988 and 1992 to test the crest and flank of the Endeavour salt diapir. The 23/26a-11 well was successful and encountered oil on the crest in fractured Zechstein anhydrite and dolomite as well as remnant, rafted chalk and Paleocene sands. The 30/1a-7 well in the adjacent licence to the south also drilled the Endeavour Crest, and tested Oil with a high water cut. The 23/26a-17 flank well drilled down to the Ekofisk Formation and was P&A dry. Endeavour proved resources are < 4 mmboe and the discovery is considered fully appraised.

Well 23/26a-9 was drilled in 1987 by BP to test a Paleocene structure to the west of the Endeavour diapir, It was P&A dry.

The most significant well for BG’s exploration objectives on the block is 23/26a-21 (Ark Royal). This well was drilled by Enterprise in 1997 to test the Jurassic and Triassic, it was plugged and abandoned as a dry hole with indications that it was a breached trap.

Prospectivity Analysis and resource summary

The significant remaining unexplored prospectivity within block 23/26f is seen by BG Group to constitute two Jurassic prospects Treepie and Raven West Terrace

Treepie

The high pressure high temperature (HPHT) Treepie prospect is a structural trap on the Eastern flank of the Endeavour salt diapir (figures 1 and 2).

Treepie has been the main focus of the P1585 work program. The recoverable volume and chance of success was evaluated incorporating detailed seismic reprocessing to improve the image of the Endeavour salt stock and interpretation of the results of the 2013 30/2a-10 Thunder well 5km to the SSE.

The primary target is stacked Upper Jurassic sands. These upper Jurassic reservoirs are sealed and sourced by the overlying upper Jurassic Kimmeridge Clay Formation and inter bedded Jurassic shales. Probabilistically enrolling the two reservoirs into a single prospect gives an un-risked resource range of 7-41-93 mmboe (P90-P50-P10) with a Pmean of 46 mmboe. The enrolled prospect COS is 20% with the lowest COS element, trap effectiveness, at 0.4. The majority of Treepie lies in the up-dip section in 23/26f although the P10 case extends into blocks 30/2a and 23/27b.



The crest of the Treepie prospect is at 4570m (15,000ft), 3km south east of the breached Ark Royal (23/26a-21) well. Treepie is defined in three directions by faults at all stratigraphic levels. To the north and south, Treepie is defined by the downthrown sides of large, east-west trending and converging fault systems. To the west, Treepie appears to be sealed by Zechstein halites/salt forming the core of the Endeavour salt diapir, or possibly by rim faulting around the diapir. Extensive work has been done to try and improve the imaging around the diapir but the uncertainty remains.

The Treepie reservoirs are expected within the upper Jurassic J54 and J56-62 time interval. The J54 reservoir is expected to be Fulmar equivalent shoreface sands, and the J56-62 is predicted to be mainly turbidite sands encased in Heather deepwater/shelfal shale. There is a good correlation of these reservoirs from the Ark Royal well.

Figure 2: Treepie prospect detail

Source presence and effectiveness is low risk as effective Kimmeridge and Heather source rock is present across the area. Treepie is adjacent to large Northern and Southern source kitchens and the reservoir intervals are encased with mature Heather shales. Basin modelling suggests that there is significant on-block charge to support Treepie in-place volumes.

Trap effectiveness is the biggest risk, Treepie lies in a region of overpressure e.g. Ark Royal (+8100 psi) and Esrkine (+7000psi) and appears to have limited top seal capacity. It is possible that the breached Ark Royal structure will act as a release valve for the entire pressure cell and pressures are below the range for



failure. The side seal against the salt diapir remains uncertain despite recent work to improve the seismic imaging on the diapir flanks.

Treepie is expected to have a maximum reservoir pressure of approximately 15,200 psi and a temperature at 380 deg F.

Raven West Terrace

The high pressure high temperature (HPHT) Raven West Terrace prospect is located in the East Central Graben on the Northern flank of the Endeavour diapir to the SE of the Erskine field. Raven West Terrace forms a ridge between the Machar and Endeavour salt diapirs (see Figure 1 and 3).

The crest of the Raven West Terrace prospect is at 4690 m (15,380 ft) in the adjacent fault block to the breached Ark Royal (23/26a-21) well.

The prospect is a down-thrown terrace from the Ark Royal structure to the NE and is defined by two faults. These SW dipping terrace bounding faults converge to the NW and SE forming an entirely fault bounded structure.

Two reservoir targets are the same Jurassic reservoirs as in Treepie, charged by upper Jurassic Kimmeridge Clay Formation and sealed by the lower Cretaceous Cromer Knoll group. Again there is a good correlation of these reservoirs from the adjacent Ark Royal well.

Probabilistically enrolling the two reservoirs into a single prospect gives Raven West Terrace an un-risked resource range of 23-60-94 mmboe (P90-P50-P10) with a Pmean of 59 mmboe. The enrolled prospect COS is 19% with lowest COS elements, trap effectiveness, at 0.25.

Figure 3: Raven West terrace prospect detail



Source presence is not considered an issue as the reservoirs are encased in effective Heather source rock and overlain by effective Kimmeridge Fm. Source effectiveness is a risk as the prospect is fault-bound and relies on a relatively small volume of source fetch/volume to charge the reservoirs. Basin modelling suggests that there is insufficient on-block charge to support Raven West Terrace in-place volumes.

Trap effectiveness is again the biggest risk, in particular the top seal, The terrace fault between Raven West Terrace has to seal the known overpressure cell that Ark Royal sits in for the trap to avoid breaching. The throw of this fault is 200-300 ft. and studies suggest this is sufficient to seal.

Assuming the Raven West Terrace is in a pressure cell that is intermediate between the Ark Royal and Erskine pressure cells there is limited top seal capacity, again it is possible that the breached Ark Royal structure will act as a release valve for the entire pressure cell.

Endeavour discovery and potential prospectivity

The Endeavour salt piercement has a small crestal accumulation which was tested by 23/26a-11 and 30/1a-7 prior to BG’s interest in the block. The wells were drilled into the top of the salt dome, 30/1a-7 tested 489 bopd with 80% water cut from fractured Zechstein anhydrite and dolomite as well as fragments of rafted Paleocene clastics and chalk. BG’s review of the well results suggests a low reserve potential of approximately ~3.4 mmbbls. The discovery is not considered economic.

Paleocene prospectivity

The 23/26a-9 well was drilled in 1987 by BP to test a Paleocene structure to the west of the Endeavour diapir, and was P&A dry in the Valhal Formation. Paleocene prospectivity still exists with the doughnut lead, a Forties salt rim based play around the Endeavour diapir. The dry offset well at 23/26a-17 provides a de-limiting point to the northwest making any potential recoverable resources small.



Figure 4: Endeavour Discovery detail

Clearance

It is believed that no outstanding permissions are required to show the seismic data in Figures 2, 3 and 4. All wells referred to are released and the work presented here has been approved for publication to the DECC.

Documents

23 26f relinquishment reportv2 - Oil and Gas Authority · PDF file · 2015-08-06Block 23/26f Relinquishment Report Relinquishment Report ... The high pressure high temperature (HPHT)