ADX ENERGY

Sidi Dhaher Well test Briefing Live Webcast, 4 July 2012

Wolfgang Zimmer, Paul Fink

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Decision to test

ASX announcement, 3 October 2011

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Decision to test: First Evidence

Wellsite geologists (highly experienced team with local experience)

document evidence for good reservoir and some minor oil fluorescence

Gas chromatography readings show best response within the best

reservoir section . Depth fits approximately with seismic “flat spot”.

Schlumberger wireline logs confirm reservoir in Bireno dolomite and

Bireno limestone sections. (This reservoir section produces oil in the

close by Guebiba field)

Schlumberger wireline logs allowed the interpretation of the presence

of hydrocarbons in analogy to the low resistivity log response within

similar carbonate rock formations of nearby oil fields.

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Data Gathering

Long edge 1.3mm

permeability

DOLOMITE

LIMESTONE

GA

S S

HO

WS

CAP ROCK (MARL)

porosity

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More Data - More Evidence ASX announcement, 26 September 2011

With the good reservoir indication just beneath the regional seal (“El

Haria” shale) and some evidence for hydrocarbons the decision was

made to obtain additional information and run Schlumberger’s XPT and

MDT test tools (pressure data, formation fluid sample) .

The XPT pressure data confirmed the presence of good reservoir

sections and led to the interpretation of an oil column.

An oil sample with mud filtrate could be retrieved from the excellent

quality Bireno Dolomite reservoir with Schlumberger MDT tool.

The sample was analyzed by Corelab in Aberdeen (Scotland) and

found to be typical of crude oils in the area around the Chorbane block.

MDT sample analysis result by Corelab (Aberdeen) : crude oil

Oil – Water column interpretation

from pressure data

MDT (Schlumberger “ mini DST” tool) oil sample on

surface

Data Evidence: Oil found

3200

3300

3400

3500

3600

3700

3800

1500 1550 1600 1650 1700

De

pth

[ f

t T

VD

ms

l ]

Formation Pressure [ psia ]

XPT 2011-09-24 MDT/XLD MDT/PA

Optimistic OWC

30 meter oil column

interpreted as most likely

Oil Gradient

Water Gradient

conservative OWC MDT oil sample

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Decision to test: Conclusions The existence of a possible oil discovery was supported by:

Presence of good reservoir (Bireno Dolomite)

Oil sample

Pressure data

Uncertainties were:

Wireline log interpretation in relation to oil and water saturation

because of low resistivity and missing information on water salinities

and rock properties.

Depth position of possible Oil water contact.

Reservoir quality of Upper Reservoir (Bireno Limestone).

DECISION UNDER UNCERTAINTY: ON THE 30th NOVEMBER 2011 THE JOINT VENTURE JOINTLY DECIDED TO

PERFORM A WELL TEST. THE POSITIVE INDICATIONS DURING THE DRILLING

AND LOGGING PROCESS JUSTIFIED THE INVESTMENT. THIS DECISION WAS

SUPPORTED BY ETAP (Entreprise Tunisienne d'Activités Pétrolières).

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Test and perforate the deeper Bireno dolomite reservoir in order to achieve high flow

rates from the best reservoir encountered during drilling

In case the lower good quality Bireno dolomite reservoir is mainly water bearing avoid

the risk of water break through (= only water flows from the high quality reservoir) and

protect any potential oil flow from the shallower lower quality Bireno limestone reservoir

against water break through.

This was achieved by planning for a possible cement squeeze off and gap in the

perforations.

FORMATION

WATER

Conservative OWC Best reservoir with fractures but possibly mainly water bearing

isolating cement

CAP ROCK (SEAL)

OIL

Test Design: Objectives

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CAP ROCK

(SEAL)

What happened?

Test 1:

Perforate both reservoir

zones and establish flow

High permeability fractured reservoir

16 meters

5 meters

16 meters

5 meters

The perforations through the casing were successfully

completed and connection between the wellbore and the two

reservoir sections were established.

The fluid analysis of the produced fluids (approximately 90

barrels) revealed that a mixture of drilling mud filtrate, well

test fluid and possibly some formation water was produced.

Since the well flowed without any acid stimulation it was

confirmed that good reservoir had been encountered.

The Lower Bireno Dolomite reservoir was mainly

contributing to the influx of mud filtrate and some formation

water – either because of the OWC in reality being close to

the conservative interpretation, or because of a fracture

network extending into the water leg.

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CAP ROCK

(SEAL)

Cement Job after Water inflow Due to the (much) higher permeability of the lower

reservoir, any oil in the lower permeability upper reservoir

would be inhibited from flowing. (Analogy: 100% water

cut well after water break through inside an oil field)

Therefore the Joint Venture decided to cement off the

lower reservoir – as per well test design plan – in order to

prevent water influx from the good quality fractured lower

dolomite reservoir.

Following acid stimulation the upper limestone

reservoir started to flow with the help of nitrogen lift.

After approximately 680 bbls of fluid production over

35 hours with no oil flow the test was abandoned.

Any oil left behind would be non commercial.

water

High

permeability

fractured

reservoir

oil sample

Test 2:

Flow for 35 hours

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CAP ROCK

(SEAL)

Explanation: Water break through

and low oil Saturation

Water saturation

Rel

ativ

e p

erm

eab

ility OIL

WATER

100% water flow

Source: Schlumberger

Different wettabilities

Relative flow capacities of oil versus formation water

The good quality Bireno dolomite was perforated

also into the water leg. Therefore only mud filtrate and

highly mobile formation water could enter the wellbore

(only 90 bbls). This situation might have been amplified

by fractures.

The small oil column in the uppermost Bireno

dolomite proven by the MDT oil sample was unable to

flow against the highly mobile water.

The revised petrophysics based on the new

formation water salinity data indicated LOW OIL

SATURATIONS. In combination with the reservoir

being possibly more oil wet than water wet (common

in carbonate rocks) this causes the trapped oil to be

IMMOBILE and only water can flow.

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CAP ROCK

(SEAL)

Conclusion: Sidi Dhaher is a non-commercial Oil Discovery

The combination of low oil saturation and water

influx from the lower good quality reservoir due to the

OWC being shallower than assumed explains both the

test results and data obtained in the drilling phase:

1. Thin oil column in Lower Bireno reservoir

section

2. Water Break Through

3. Preferential flow of water over oil in lower

quality reservoir because of lower oil

saturation and possible oil wet carbonate.

With this additional information obtained during the

well test it can be concluded to date that the Bireno

dolomite reservoir has only a small non commercial oil

column and that the upper Bireno limestone reservoir

would not be able to flow freely at commercial rates.

MDT oil sample

Low Oil

Saturation

Water

Low

Permeability

Rock

High

Permeability

Rock