SENDERO PETROLEUM LIMITED

RELINQUISHMENT REPORT

LICENCE P.1783

December 1, 2014

Relinquishment Report for Licence P.1783, Blocks 21/3c, 21/4b, 21/5b-Bobcat

1. Licence Information

Licence Number: P.1783

Licence Round: 26th Round – Awarded 10 January 2011

Licence Type: Traditional

Block Numbers: 21/3c, 21/4b, 21/5b

Operator: Sendero Petroleum Limited (100%)

Licence Work Program Summary

Sendero committed to shoot 125km2 of 3D seismic data, obtain 200km of 2D long offset seismic data, and to obtain and reprocess 450km2 of 3D seismic data. Following a conversation between Sendero and DECC on the 10th of December 2010 when it was recognized that the entire licence was only 422 sq. kms and that there was not 200 kms of long offset 2-D data on the licence, the program was amended to: shoot 125km2 of 3D seismic data, obtain 200km of 2D long offset data or other 2D seismic data, and obtain and reprocess 420km2 of 3D seismic data. 2. Exploration Activities Sendero acquired a new 300 km2 3D seismic program of which 190 sq. km is positioned on the licence. This survey was processed by Fugro. Sendero purchased and reprocessed the all of the 1095 sq km Quad 21 3D seismic survey which covered the entire licence, which is 422 sq km in size. The Quad 21 3D was reprocessed by Fugro. Sendero also purchased 135 km of TGS long offset 2D seismic data which was the total amount of true long offset data available over the licence, and 65 km of WG 99 2D seismic survey positioned inside of the licence boundaries fulfilling the restated work program (Figure 1). No new wells were drilled. The seismic purchased was coordinated to take advantage of local well control (Figure 1). The most significant local wells included 21/03a-4, 21/3a-7, 21/03b-3, 21/03b-5, 21/04-1, 21/04-2z, 21/04-3, 21/04b-5, 21/04b-6, 21/05a-6, 21/05a-6x, 21/05a-6z 21/05b-1, 21/05b-4RE, 21/05b-3, 21/05b-5, 21/06b-1z, 21/10-7, 22/01a-3, 22/01a-4, 22/01a-11, 22/01c-7, and 22/01c-9. Seismic and well data associated with the various analog pools were also incorporated into the prospectivity assessment of blocks 21/3c, 21/4b and 21/5b. 3. Prospectivity Analysis The 21/3c, 21/4b and 21/5b blocks are adjacent to the Cretaceous Brodgar and Finlaggan gas-condensate fields, and positioned along the depositional trend of Britannia reservoir. The blocks are also flanked by the Glenn and Bacchus Jurassic oil fields. They are also positioned to the north of the Paleocene Forties and Nelson oil fields, and south of the Paleocene Callanish and Enochdu, and Eocene Alba and Chestnut oil fields (Figure 2). The Brodgar pool produces from Britannia sandstones, the Glen and Bacchus from Fulmar sandstone, the Forties, Nelson, Callanish and Enochdu fields produce from the Forties sandstone, and the Alba and Chestnut from Alba and Caran sandstones. These horizons were the focus of the evaluation for hydrocarbon potential for blocks 21/3c, 21/4 and 21/5b.

Source and Migration Hydrocarbons for all zones were sourced from the Upper Jurassic Kimmeridge Clay, which is locally mature for oil and liquids rich gas (Figure 3). Basement seated graben edge fault systems served as vertical migration conduits, and lateral migration was assisted by the Forties and Britannia Member Sandstones which are regional aquifers. Reservoirs and Associated Top Seals The associated top seals for the reservoirs reviewed for potential on the licence are:

Jurassic Fulmar Sandstone: sealed by the Kimmeridge Clay Formation marine shale Cretaceous Britannia Sandstone: sealed by the Sola Formation marine shale Paleocene Forties Sandstone: sealed by the Sele Formation marine shale Eocene Alba and Caran Sandstones: sealed by the Caran and Nauchlan marine shales

Traps The principle trapping mechanisms for the Jurassic and Paleocene fields include 4 way structural closure and depositional pinchout, for the Cretaceous fields, depositional pinchout and structural reversal, and for the Eocene fields, stratigraphic trapping related to depositional containment and updip stratigraphic pinchout. Primary Zones of Interest Early Cretaceous Britannia Sand: As displayed by the Topographic Controls on Britannia Sand Distribution (Figure 4), sands associated with the licence were sourced from the Inner Moray Firth and transported downwards along the confines of the South Halibut Basin to the Outer Moray Firth. Reservoirs were deposited as a series of turbidite flows. The distal edge is positioned near the 21/5 block where the system intersects with the Fisher Bank Basin. Hydrocarbons generated from the underlying Kimmeridge migrated through basement rooted graben edge fault systems into the overlying Britannia sandstone regional aquifer. The regional continuity of the aquifer from the wells in block 21/5, towards the west, is supported by the well control along the South Halibut Basin. Representations of the continuity are provided by the Britannia C Net Reservoir Thickness Map (Figure 5) and the Britannia Regional Cross-Section (Figure 6). The continuity of reservoir along the basin is further supported by the presence of gas and condensate trapped in the Goldeneye field in block 14/29, a distance of 80 Km west from where the Kimmeridge source is mature for condensate and gas (Figure 3). Attempts to seismically image the Britannia sand reservoir were unsuccessful. As gas and condensate were able to migrate along the Britannia sand system, and Britannia reservoir was identified in all reviewed wells from 14/29 to the eastern edge of the licence in 21/5, it was concluded that reservoir potential for this fairway is directly related to the accommodation provided by the South Halibut Basin. As applies to the risk assessment of Britannia sand prospects, this assumption is restricted as far east as the wellbore confirmed reservoir presence in 21/5. As presented by the Top Britannia Structure Map (Figure 7), the hydrocarbon accumulations at Brodgar and Finlaggan are trapped where the reservoir pinches out against local highs and where there is structural reversal in the updip direction. The field boundaries and drainage areas are defined by the structural interpretation and hydrocarbon water contacts. Three separate areas were initially identified as having components of both reservoir and trapping potential but were discounted for the following reasons:

South of Brodgar 21/3c Based on the structural interpretation for the Top Britannia and the hydrocarbon-water contact at -3383 meters confirmed by the 21/03a-4 well, it was concluded that the Britannia field did not extend south onto block 21/3 (Figure 7). Finlaggan Extension Northwest 21/5b The seismically defined southwestern extent of the Finlaggan closure on to 21/5 is minor as displayed by the Finlaggan Top Britannia Time Structure Map (Figure 8). Where the closure exists on 21/5, the thickness of the anticipated hydrocarbon column is not sufficient to warrant a development location. Southeast 21/5b Although there is apparent communication between hydrocarbon source and reservoir in the area of 22/1, there are no wells that can confirm the continuation of the reservoir on to the southeastern part of block 21/5 (Figure 5). In the absence of the ability to provide seismic confirmation, reservoir risk was considered to be prohibitive to further activity. Eocene Alba and Caran Sand: During the Middle Eocene, sediments were transported as turbidites from the northwest creating the Alba and Caran sandstone reservoirs (Figure 9) now encountered in the area of blocks 21/3c, 21/4 and 21/5b. Locally, these sediments appear to have been deposited within existing scour features. For the offsetting Alba field in block 16/26, hydrocarbons were trapped laterally by the confines of the scour, and by the updip depositional pinchout. The reservoir is encapsulated by impermeable hemipelagic sediments. A profile of the trapping mechanism is provided by the structurally datumed cross-section of the Alba pool (Figure 10). The hydrocarbons were sourced from the Jurassic Kimmeridge clay, migrated upwards through graben edge basement faults, were transported updip along the Paleocene Forties aquifer, and accessed the isolated Eocene reservoirs through Forties derived injectites. A summary slide of reservoir, trap and source is provided (Figure 11). The seismic expression of the Alba field analog scour and fill compared favourably with a Caran level feature identified on the adjacent block 21/5b (Figure 12). Local boreholes that encountered Caran aged sands are identified on the Caran Reservoir Summary map (Figure 13), with examples provided by the Caran stratigraphic cross-section (Figure 14). As can be observed from figure 13, a target area for these reservoirs is positioned parallel to the western shoreface sediment source, and locally restricted to a corridor approximately 25 km wide. The identified seismic anomaly is positioned within the target area and penetrated by the well 21/5b-5 which had 62 meters of Caran reservoir. The 21/5b-5 well encountered approximately 4 meters of oil pay, confirming that hydrocarbons were able to access the reservoir. The 21/5b-5 well is separated from the prospective area by a structural saddle. The separation of the 21/5b-5 is displayed by the Caran Prospect Summary/Balder Time Structure Map (Figure 15). Although containment within the south to north trending scour was identified, the updip termination providing the trap for the feature could not be confirmed. Attempts to seismically support the presence of hydrocarbons in the feature were unsuccessful.

Other Prospective Horizons Jurassic Fulmar Sand: In blocks 21/2 and 22/6, offsetting Licence 1783, hydrocarbons have been recovered from Jurassic Fulmar Formation reservoirs associated with structure related traps. Hydrocarbon pay potential was not identified in any of the wellbores on the licence and structures believed to be capable of providing sufficient capture of hydrocarbons were not observed from the available seismic. In addition, the risk associated with the seismic imaging of Fulmar sands was confirmed by the 21/6a-7 well, which was drilled to evaluate a Fulmar prospect on licence P1048 (Figure 16). A summary of the opportunity was accessed from the relinquishment report submitted by Oilexco for the P1048 licence. The 21/6a-7 well encountered mostly Heather Formation claystone and mudstone where Fulmar reservoir had been predicted. Upper Paleocene Forties Sand: Hydrocarbons in the offsetting Forties field in block 21/10 and Nelson field in block 22/6 (Figure 2) were captured as a result of the coincidence of channel reservoirs and large scale horsts. Hydrocarbons located at Callanish in block 21/4 and Enochdu in block 21/5 (Figure 2) were trapped as a result of the drape of Forties aged channel deposits over low amplitude structures. Upper Paleocene sediments were sourced from the northwest and transported towards the southeast as submarine fan complexes. Depositional environments for the Forties Member for specific wellbores were established by relating core and log signature. As presented by the Petrophysical Facies Summary and Forties Depositional Model (Figure 17), five broad facies were defined. Based primarily on gamma ray signature, a constantly high API profile is interpreted to indicate lower fan, an erratic profile for an interchannel environment, and a constantly low API value indicative of channel sedimentation. The interpreted distribution of log defined facies is provided with the Forties Member Facies Summary Map (Figure 18). The log signatures indicating occurrences of channel deposition for the locations 21/03-2, 21/04-2z, and 21/05-4, and the prediction of geological facies trends, supported reservoir potential in the northwest and southeast parts of 21/4, and the northeast part of 21/5. Reservoirs for the three wells were confirmed to be water charged. The interpretation was further corroborated seismically by an evaluation of the available data conducted by Robertson GeoSpec where they cross-referenced their geomorphological interpretation with a frequency stratal slice of the Upper Forties (Figures 19 and 20). Paleogene level structures having the potential for the trapping of economic volumes of hydrocarbons associated with the defined areas of interest, as well as non-geologically supported areas, were not observed on review of the seismic. Evaluation Results Based on the internal evaluation, incorporating the newly acquired data, Sendero does not consider either the primary zones of interest or other prospective horizons as having a chance of success supportive of an economically viable location on licence P.1783. The licence has reached the end of the first 4 years of its life and no application to extend it will be submitted. Clearance Sendero gives approval to BERR to publish material contained in this report.

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