Relinquishment Report

Licence P.2238

Blocks 30/24a & 30/25a

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Contents Figures .................................................................................................................................... 2

Tables ..................................................................................................................................... 2

Important Information............................................................................................................. 3

1. Licence Information ............................................................................................................. 4

2. Licence Synopsis .................................................................................................................. 4

3. Work Programme Summary ................................................................................................. 6

4. Database ............................................................................................................................. 6

5. Prospectivity Analysis .......................................................................................................... 7

6. Further Technical Work ...................................................................................................... 12

7. Resource Risk .................................................................................................................... 13

8. Conclusions ....................................................................................................................... 13

9. Clearance........................................................................................................................... 13

10. Additional Map/ Figures ................................................................................................... 14

Appendix 1 ............................................................................................................................ 16

Relinquished area maps ..................................................................................................... 16

Appendix 2 ............................................................................................................................ 18

Description of relinquished area ......................................................................................... 18

References ............................................................................................................................ 19

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Figures Figure 1. Location of blocks 30/24a & 30/25a .................................................................................. 4 Figure 2. Generalised stratigraphy .................................................................................................... 5 Figure 3. Maturation map for present day Kimmeridge Claystone ................................................. 6 Figure 4. Ardmore Energy Seismic Coverage .................................................................................... 7 Figure 5. Porosity distribution in Rotliegend unit ............................................................................ 9 Figure 6. CPI across Rotliegend unit .................................................................................................. 9 Figure 7. Porosity distribution in Old Red Sandstone unit ............................................................. 10 Figure 8. CPI across Devonian Sandstone unit ............................................................................... 11 Figure 9. 3D TerracubeREGRID seismic coverage ........................................................................... 14 Figure 10. North/ South view of faulted terrace system ............................................................... 14 Figure 11. East/West inline section ................................................................................................ 15 Figure 12. 30/25a-04 Discovery well with Carluke/ Baberton and North Extension terraces ...... 15 Figure 13. Map of area relinquished block 30/24a ........................................................................ 16 Figure 14. Map of area relinquished block 30/25a ........................................................................ 17

Tables Table 1. Petrophysical Zone Averages Report ......................................................................... 12 Table 2. STOOIP & ROOIP results ............................................................................................ 13

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Important Information This Relinquishment Report is presented by Ardmore Energy Limited for L i c e n c e P 2 2 3 8. T h i s r e p o r t c o n t a i n s original information which may be of use to companies considering the acquisition of this acreage in upcoming licencing rounds.

This Relinquishment Report is not all-inclusive n o r d o e s i t contain all of the information that an interested party might desire. Ardmore Energy Limited has provided the information contained in this Relinquishment Report i n good fa i th . Nevertheless Ardmore Energy and its affiliates, officers, directors, employees, agents, advisers and representatives make no representations or warranties, expressed or implied or accept any responsibility or liability, concerning any information in this Relinquishment Report or the omission of any information.

Reliance on the information provided in this Relinquishment Report shall not give rise to any cause of action against Ardmore Energy, or its affiliates, officers, directors, employees, agents, advisers and representatives, including, without prejudice to the generality of the foregoing, causes of action or claims based upon their negligence or willful misconduct.

This Relinquishment R e p o r t contains forward-looking i n f o r m a t i o n (statements that are not historical facts and relate to future performance) concerning, among other things, a property's prospects for production. Although Ardmore Energy Limited believes the expectations reflected in these forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations will be correct. No representation, warranty or undertaking, express or implied, is made by Ardmore Energy Limited, or its affiliates, officers, directors, employees, agents, advisers and representatives, that any projections, forecasts or opinions should or will be achieved.

In suppling this Relinquishment Report, Ardmore Energy Limited undertakes no obligation to provide the recipient with access to any additional information.

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1. Licence Information Licence Number: P. 2238. Licence Round: 28th Seaward Licencing Round. Awarded December 2014. Licence Type: Promote Licence. Block Number/s: 30/24a & 30/25a.

2. Licence Synopsis Ardmore Energy was awarded promote licence P.2238 in the 28th Seaward Licencing Round and held 100% interest. A budget was available for the DECC 2 year Promote Licence Fee and the G&G work programme. However, the licence was surrendered early due uncertainty surrounding the April 2016 OGA Levy Payment. Blocks 30/24a and 30/25a are located in the southernmost part of the Central North Sea in the Central Graben (figure 1) near the Innes, Alma (formally Dalmore Field) and the Galia Field (formerly the Ardmore/ Argyll Field). A generalized stratigraphy is presented in figure 2.

Figure 1. Location of blocks 30/24a & 30/25a

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Figure 2. Generalised stratigraphy (Robson, 1991)

The block 30/25a discovery well, 30/25a-4, was drilled in 1990 by Hamilton Brother Oil & Gas Limited and penetrated hydrocarbon bearing Permian/ Devonian rocks. The DST flowed 550 bopd from the Permian unit and the overlying Jurassic interval flowed 350 bopd. The prospect 1C Contingent Reserves are 3 mmbbls. Combined calculated P50 STOIIP across the 3 structures is 62 mmbo (Table 2). Recoverable hydrocarbon P50 2C Contingent Reserves are 12.8 mmbls. The gross reservoir thickness logged was 476 ft MD, the OWC was not encountered. The interval, from 14332 ft MDRT to 14808 ft MDRT, is composed of sandstone and shale. The Auk Formation (Rotliegend Group) was encountered from 14,332 ft to 14,403 ft (71 ft). This formation had 26 ft net sand (37% net to gross) and porosity values ranging from 1-11%- average 6%. The Devonian Old Red Sandstone section extended from 14,403 ft to 14,808 ft (TD). Within the top 403 ft there is 206 ft net sand (51% net to gross) and porosity values ranged from 2- 11%- average 6%. Only two pressures were obtained in the Auk Formation. The Devonian Old Red Sandstone RFT’s were all tight. Reservoir quality is described as marginal, although, the well is close to a number of faults and this may have affected reservoir quality at this level. Block 30/24a lies to the east of block 30/25a and the discovery well 30/25a-4. A number of

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potential structures are identified on this block. Endeavour Energy relinquished block 30/25a in March 2009 following their decision not to drill a well. However, they did carry out an extensive seismic study as part of their firm commitment. Their commitment included:

• Re-processing and merge 420sqkm to pre stack time migration • Carry out rock physics AVO analysis

Evaluation of the dataset by Endeavor Energy showed the main risk was reservoir quality, volume and connectivity of the reservoirs. Ardmore Energy Limited became interested in the area around blocks 30/24a and 30/25a after a regional GIS mapping exercise. Regional mapping indicated source rocks deposited in the area would generate oil (figure 3), although, modeling by Endeavor Energy suggest gas would be produced in the north of the blocks.

Figure 3. Maturation map for present day Kimmeridge Claystone (Megson et al.)

3. Work Programme Summary Completed GIS modelling, generation of 3D Seismic model with well data tied to seismic, interpretation of seismic model and generation reserves and an economic model.

4. Database 3D seismic data was bought to carry forward Ardmore’s geological investigation. Ardmore has obtained 327sqkm of 3D TerracubeREGRID seismic data from Fugro-Robertson, seismic coverage is shown in figures 5 & 10. The 3D seismic was tied into the wells using the available check shots. Log data was digitized and LAS data acquired for specific wells. Analysis of this data set allowed a better understanding of the 30/25a-4 discovery and investigation of the regional geology. Ardmore Energy’s interpretation of the seismic allowed generation of a geological model and accurate mapping of the prospects for future drilling locations.

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Figure 4. Ardmore Energy seismic Coverage

5. Prospectivity Analysis The Rotliegend Sandstone reservoir interval is observed from 14332 ft- 14403 ft MDRT. The interval has a gross thickness 71ft MD with 8.5ft MD of net pay. The N/G is 12%. The average porosity is 13% (range 4- 15%). The porosity distribution and range is presented in figure 6. The CPI is presented figure 7. Average Sw across the Rotliegend Sandstone interval is 44%. Tabulated Rotliegend Sandstone reservoir data is presented in Table 1.

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Figure 5. Porosity distribution in Rotliegend unit

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Figure 6. CPI across Rotliegend unit

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The Devonian Old Red Sandstone reservoir interval is observed from 14403-14788 ft MDRT. The gross interval is 385 ft with 178.5 ft of net pay. The N/G is 27%. The average porosity is 8% (range 0-13%). The porosity distribution and range is presented in figure 8. Average Sw over the interval is 36%. The OWC is not observed on the wireline log and the well was TD’ed in the Devonian Old Red Sandstone reservoir with hydrocarbons observed on the log. A CPI is presented figure 9. The average Sw value across the Devonian Sandstone interval is 44%. Tabulated Old Red Sandstone petrophysical data is presented in Table 1.

Figure 7. Porosity distribution in Old Red Sandstone unit

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Figure 8. CPI across Devonian Sandstone unit

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Table 1. Petrophysical zone averages report

6. Further Technical Work None undertaken

Zn Zone Nam Top Bottom Gross Net N/G Av Phi Av Sw Av Vcl Phi*H PhiSo*H # Ari ROT 14332 14403 71 22 0.31 0.117 0.563 0.103 2.58 1.13ORS 14403 14788 385 $$178.50 0.464 0.083 0.471 0.16 14.89 7.88 All Zones 14332 14788 456 $$200.50 0.44 0.087 0.484 0.154 17.47 9.01

Zn Zone Nam Top Bottom Gross Net N/G Av Phi Av Sw Av Vcl Phi*H PhiSo*H # Ari ROT 14332 14403 71 8.5 0.12 0.133 0.447 0.067 1.13 0.63ORS 14403 14788 385 $$104.50 0.271 0.085 0.361 0.14 8.87 5.67 All Zones 14332 14788 456 $$113.00 0.248 0.089 0.37 0.134 10 6.3

Zn Zone Nam Top Bottom Min. Phi Sw Vcl # Height PHIE SW VWCL

ROT 14332 14403 0 >= 0.1 <= 0.5 ORS 14403 14788 0 >= 0.067 <= 0.5

ROT 14332 14403 0 >= 0.1 <= 0.5 <= 0.5 ORS 14403 14788 0 >= 0.067 <= 0.5 <= 0.5

Cutoffs Used

Reservoir

Pay

Depth Units : ft

Reservoir Summary

Pay Summary

Well : 30/25a-4Date : 30/12/2014 12:27:43

Formation: Rotliegend/ Old Red Sandstone

Petrophysical Zone Averages Report

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7. Resource Risk

Table 2. STOOIP & ROOIP results

8. Conclusions The discovery well 30/25a-4 confirms hydrocarbons are trapped in structures situated structurally lower than the Ardmore Field. Faulting across the area has been extensive and resulted in a series of faulted terraces. The faulted terraces with reservoir rocks are relatively small and petrophysical examination reveals the reservoir properties are marginal. Economic modeling suggests the development is only commercially viable when tied back to an existing facility combined with horizontal development of the reservoir units.

9. Clearance Ardmore Energy Ltd. Confirms that DECC/OGA is free to publish the Report and that all 3rd party ownership rights (on any contained data and/or interpretations) have been considered and appropriately cleared for publication purposes.

Block Zone OWC GRV NTG Por Sw Bo STOOIP Rf ROOIPAcre-ft % % % RB/STB MMbbls % MMbbls

30/25a-04 Rotliegendes - 16,236 12% 13% 45% 1.08 1.00 21% 0.20830/25a-04 Devonion -4,524 89,307 27% 9% 36% 1.08 9.95 21% 2.070Total 105,543 10.95 2.277

North Extenstion - 30/25a-04 Rotliegendes -4,645 18,722 12% 13% 45% 1.08 1.15 21% 0.239North Extenstion - 30/25a-04 Devonion -4,708 98,366 27% 9% 36% 1.08 10.96 21% 2.280Total 117,088 12.11 2.520

Carluke Rotliegendes -4,275 40,609 12% 13% 45% 1.08 2.50 21% 0.519Carluke Devonion -4,275 191,667 27% 9% 36% 1.08 21.36 21% 4.442Total 232,275 23.85 4.961

Baberton Rotliegendes -4,066 31,689 12% 13% 45% 1.08 1.95 21% 0.405Baberton Devonion -4,123 113,935 27% 9% 36% 1.08 12.70 21% 2.641Total 145,624 14.64 3.046

Grand Total 600,530 11% 41% 1.1 61.56 12.80

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10. Additional Maps & Figures

Figure 9. 3D TerracubeREGRID seismic coverage

Figure 10. North/ South view of faulted terrace system

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Figure 11. East/West inline section

Figure 12. 30/25a-04 Discovery well with Carluke/ Baberton and North Extension Terraces

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Appendix 1

Relinquished area maps

Figure 13. Map of area relinquished block 30/24a

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Figure 14. Map of area relinquished block 30/25a

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Appendix 2

Description of relinquished area Block 30/24a, determined on 1st December 2014, is the region bounded by the following coordinates 1) 56°20'00.000"N 2°36'00.000"E 2) 56°20'00.000"N 2°48'00.000"E 3) 56°13'00.000"N 2°48'00.000"E 4) 56°13'00.000"N 2°45'00.000"E 5) 56°12'00.000"N 2°45'00.000"E 6) 56°12'00.000"N 2°43'00.000"E 7) 56°16'00.000"N 2°43'00.000"E 8) 56°16'00.000"N 2°42'00.000"E 9) 56°17'00.000"N 2°42'00.000"E 10) 56°17'00.000"N 2°41'00.000"E 11) 56°18'00.000"N 2°41'00.000"E 12) 56°18'00.000"N 2°38'30.000"E 13) 56°16'00.000"N 2°38'30.000"E 14) 56°16'00.000"N 2°36'00.000"E 15) 56°20'00.000"N 2°36'00.000"E

The above coordinates were specified using "European Datum 1950". The lines joining coordinates (1) to (15) are navigated as loxodromes.

Block 30/25a, determined on 1st December 2014, is the region bounded by the following coordinates:

1) 56°20'00.000"N 2°48'00.000"E 2) 56°20'00.000"N 2°56'37.380"E

thence following the Designated Continental Shelf Boundary as defined in the Continental Shelf (Designation of Areas) Order 2013 (S.I.2013/3162) until coordinate:

3) 56°17'17.890"N 3°00'00.000"E 4) 56°10'00.000"N 3°00'00.000"E 5) 56°10'00.000"N 2°49'00.000"E 6) 56°13'00.000"N 2°49'00.000"E 7) 56°13'00.000"N 2°48'00.000"E 8) 56°20'00.000"N 2°48'00.000"E

The above coordinates were specified using "European Datum 1950". The line joining coordinates (1) to (2) is navigated as a loxodrome. The line joining coordinates (2) to (3) is navigated as a geodesic. The lines joining coordinates (3) to (8) are navigated as loxodromes

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References Robson, D. 1991., The Argyll, Duncan and Innes fields, Blocks 30/24 and 30/25a, UK North Sea. In: Abbotts, I. L. (ed.) United Kingdom Oil and Gas Fields: 25 Years Commemorative Volume. Geological Society, London, Memoir, 14, pp. 219–225. Joan Megson and Richard Hardman., ‘Exploration for and development of hydrocarbons in the Chalk of the North Sea: a low permeability system’ Petroleum Geoscience, Vol 7 2001, pp. 3-12