Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

1

1. General Licence: P.079 (part) Round: 2nd Round (1965) Licence Type: Traditional Block: 30/13a Contract Area C (West) Equity: Talisman Sinopec Energy UK Limited (TSEUK) 35%

(Operator), GDF Suez E&P UK Limited 40%, E.ON E&P UK Limited 15%, Idemitsu Petroleum UK Limited 10%.

2. Licence History

Figure 1: Location Map of P.079, Block 30/13a (West)

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

2

Block 30/13 was awarded in November 1965, as Licence P.079 to a partnership operated by Phillips Petroleum in the 2nd Licence Round. Early drilling on the block focussed on the Josephine Ridge and proved successful, with oil being flowed from the Jurassic and Triassic (30/13-1, 1970) and Palaeocene (30/13-2, 1972). After a hiatus of nearly 20 years, the Phillips group began a new campaign in the northeast part of the block, starting with well 30/13-3 in 1990 which flowed oil from the Upper Jurassic Jacqui turbidite sands. Over the next seven years a further four wells were drilled in the Jacqui sub-basin with mixed results; wells 30/13-4 (1991) and 30/13-6 (1996) encountered hydrocarbon columns in the Jacqui sands, whereas well 30/13-5 (1996) was dry with oil shows in the Triassic and well 30/13-7 (1997) found oil shows in the Jacqui sands and Middle Jurassic Pentland sands. On 1st December 2002, Talisman Energy (UK) Limited acquired 35% interest and operatorship from Phillips and began a work program to overturn the fallow status of the block. This culminated in the drilling of well 30/13-8 (2005) to test the flank of the Jenny diapir, although only oil shows were encountered in the Ekofisk and Tor Formations. The block was partially relinquished in January 2010 with the remainder being split into 30/13a (East) (containing part of the Flyndre and Cawdor accumulations) and 30/13a (West) (containing the P1 and P2 accumulations discovered by wells 30/13-2 and 30/13-1 respectively). The partnership further appraised the Tr1 discovery in 2010 with well 30/13a-9. Despite encountering oil at three stratigraphic levels, in the Palaeocene, Jurassic and Triassic, it became apparent that the deep Mesozoic structure was more complex than prognosed and poorly imaged on seismic. A short-term extension (STE) of the licence was given in 2011 with an obligation to submit a consent for development by 25th November 2013 with first oil occurring between 25th November 2015 and 25th November 2017 (depending on the development concept). Following the drilling of well 30/13a-9, attention turned to the Palaeocene with the P1 and P2 accumulations being renamed Talbot. In 2013, the partnership drilled an additional well (30/13a-11) and sidetrack (30/13a-11Z) to delineate the Talbot structure. 3. Exploration Activities Table 1 summarises the wells that are present within Block 30/13a (West).

WELL Year Spudded OBJECTIVE(S) DISCOVERY/SHOWS REASON FOR FAILURE /

SUCCESS

30/13a-11Z

2013 Test downdip extent of Acoustic Impedance

anomaly.

Oil column in Mey Sandstones

Not tested. ODT 9759 ft. TVD(SS)

30/13a-11 2013 Test acoustic impedance anomaly on western flank

of Talbot

Oil column in Mey Sandstones

Successful DST in Mey sandstones. ODT 9581 ft.

TVD(SS)

30/13a-9 2010 Triassic Skagerrak, and

secondary Upper Jurassic reservoir.

Discovery in Palaeocene Mey Sandstones, Upper Jurassic J62 sands and

Triassic Skagerrak sands. Shows in the Upper Cretaceous.

Mesozoic interval was successfully tested; pressure

and fluid data was successfully obtained from the Palaeocene

sands.

30/13-2X 1972

To evaluate the 30/13-1 Triassic discovery and test

anticipated Palaeocene and Jurassic sand

development.

Palaeocene Oil discovery.

Shows in Upper Jurassic and Middle Jurassic

sands.

Successful DST in Palaeocene.

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

3

WELL Year Spudded OBJECTIVE(S) DISCOVERY/SHOWS REASON FOR FAILURE /

SUCCESS

30/13-1X 1970 Triassic and Upper

Jurassic sands on the Josephine Horst.

Triassic oil discovery. Shows in Chalk and

Jurassic. TD in Triassic.

Table 1: Summary of Well Results from Block 30/13a (West)

The prospectivity of block 30/13a (West) has been assessed using CGG Veritas’s multi-client Cornerstone long offset 3D seismic data. This survey was acquired in 2001-2 and processed to a pre-stack time migration. In 2008, Talisman Energy (UK) Limited undertook a proprietary Pre-SDM reprocessing of these data over Block 30/13, focussing particularly on multiple suppression and refinement of the velocity model. The Talisman reprocessing was undertaken to enhance imaging over the Josephine Ridge. In addition, as part of the ongoing appraisal of the Talbot discoveries, Fugro-Jason undertook a Simultaneous Pre-Stack inversion of a sub-area of the Pre-SDM, delivering AI and Vp/Vs volumes. Building on these, TSEUK generated Shear Impedance, Lambda*Rho and Mu*Rho volumes and the Lambda*Rho volume has proved critical in assessing the hydrocarbon distribution within the Talbot structure. 4. Prospectivity Analysis 4.1 Discoveries 4.1.1 Talbot The Talbot discovery was made by well 30/13-2, drilled by Phillips in 1972, in the Palaeocene Mey sandstones. This well, at the northern end of the Talbot structure, encountered an oil-down-to (ODT) at 9446 ft.TVD(SS) and appeared to define a four-way dip closed structural trap (Figure 2). The Mey sandstones, within the Lista Formation, form part of a turbidite sequence, sourced mainly from north-west with some local debris flows, deposited within a shallow depression originating during Cretaceous or earlier. These lobate sand units appear to thin towards the south, east and west and are of high quality with an average porosity of 21% and a NTG of 69%.

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

4

Figure 2: Mey Sandstone Depth Structure

Well 30/13a-9, drilled some 5km to the south of the discovery well in 2011, again penetrated oil-bearing Mey sandstones with an oil-water contact at 9422 ft. TVD(SS) but with an interpreted palaeo-contact at 9450 ft. TVD(SS) close to the mapped spill of the structure. Following delivery of the Fugro-Jason pre-stack seismic inversion data and their derivatives, interpretation of the Lambda*Rho volume showed a very good correlation with hydrocarbon presence in the reservoir. At the northern end of the Talbot structure, the Lambda*Rho response is conformable with the structural closure (Figure 3); in the south, the situation is more complex and the Lambda*Rho response ‘spills’ outside of closure on the western flank of Talbot. In 2013, well 30/13a-11 was designed to test the structural spill point on the southwest flank of Talbot. Due to errors in the depth conversion methodology, the well actually penetrated the Mey sandstone reservoir more than 100 ft. deep to prognosis but still found it to be oil-bearing with an ODT 9581 ft. TVD(SS). This result validated the Lambda*Rho response on the western flank and the well was side-tracked further down-dip to test the extent of the anomaly. Well 30/13a-11Z again penetrated oil-bearing Mey sandstones with an ODT 9759 ft. TVD(SS).

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

5

Figure 3: Lambda*Rho 'Fluid Response' in Mey Sandstone

It is clear that Talbot is not just a simple four-way dip closure. The conformity of the Lambda*Rho response with oil-water contact in the north indicates that this part of the accumulation is structurally controlled but there is nothing apparent on seismic which allows this area to be separated from the remainder of the accumulation. At the southern end of the structure, oil-bearing reservoir was been proven more than 300 ft. deeper than the northern structural spill and validates the Lambda*Rho hydrocarbon response in this area. There is a clear cut-off in this response moving northwards along the western flank of Talbot although there is no obvious boundary on seismic to reflect this change. At present the trapping mechanism for this deeper oil remains unresolved. Volumetric assessment has been undertaken using the Lambda*Rho response to define three separate polygons: a northern area with a contact assumed at 9446 ft. TVD(SS), the ODT in well 30/13-2 and close to the structural spill; a central area with a contact at 9422 ft. TVD(SS) as seen in well 30/13a-9; and a southwestern area with a contact at 9759 ft. TVD(SS), coincident with the ODT in well 30/13a-11Z. The volumetric summary is shown in section 5. 4.1.2 Tr1 The 30/13 Tr1 (Josephine) discovery, located on the Josephine ridge, was made by well 30/13-1, drilled by Phillips in 1970. This well encountered an oil column in Triassic Skaggerak sandstones. Although the well was tested, mechanical problems meant that no valid flow rates or fluid samples could be obtained and the principal uncertainties were considered to be reservoir quality, productivity and connectivity, and the hydrocarbon type. The Tr1 structure was appraised by well 30/13a-9 in 2011

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

6

which determined the hydrocarbon type to be light, low GOR oil. The drill stem test data implied low permeability and barriers to flow that may be due to faulting. It became apparent from image log dipmeter interpretation that the structural form of the Triassic reservoir was not imaged accurately in the seismic; it appeared to have low dips conformable with the overlying Jurassic whereas structural data indicated the Triassic to be steeply dipping to the northeast (Figure 4).

Figure 4: Seismic Illustration Showing Conflict Between Seismic and Dipmeter Data (Data Courtesy of CGG)

In the absence of reliable seismic imaging, the base of the reservoir has been modelled as a planar surface defined by the two well tie points and dipping consistently at 35o towards the NE (Figure 5); this is a gross simplification of the structure but gives a good constraint on the geometry of the trap for the volumetric assessment summarised in Section 5.

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

7

Figure 5: Seismic Illustration Showing the Effect of Modelling the Base of the Triassic Reservoir Sands to Match the Dipmeter Data (Data Courtesy of CGG)

4.2 Prospects and Leads In 2013, Senergy undertook an independent assessment of the remaining prospectivity in Block 30/13a (West), building on and refining Talisman’s seismic interpretation and providing alternative structural and stratigraphic interpretations of the prospects that had been identified. These are shown in Figure 6 and the volumetric summary in Section 5 is based on Senergy’s evaluation.

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

8

Figure 6: BCU Depth Structure Map Showing Remaining Prospectivity in Block 30/13a (West)

4.2.1 Ginny (Fiennes) The Fiennes structure was originally mapped as a closure at BCU level in the hanging wall to the western margin of the Josephine ridge (Figure 6). Subsequent mapping has divided the prospect into two distinct sections: Ginny, which is interpreted as a mass transport or slump complex of Upper Jurassic age; and Ranulph, a structural closure at Triassic level (Section 4.4.2). The crests of both Ginny and Ranulph are at approximately 14,500 ft. TVD(SS) and both prospects are considered to be HPHT.

Ginny forms a dip-closed structure against the western bounding fault of the Josephine ridge. Its upper bounding surface is defined by the BCU and its lower bounding surface by a bright seismic reflector (Figure 7). The reservoir fill is the most difficult to define and is the riskiest element of the play; it appears to be seismically harder than the surrounding Jurassic shale lithologies and may have been sourced from the adjacent ridge. Mass transport complexes have been reported from the Judy/Joanne area immediately to the north and giant olistoliths present in these sequences have been locally sourced from the pre-existing Triassic sediments on the ridge. Top seal is provided by Upper Jurassic and Lower Cretaceous shales. Lateral sealing lithologies or fault seal are also required as the prospect is juxtaposed against the ridge.

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

9

Figure 7: Seismic Illustration of Ginny Prospect (Data Courtesy of CGG)

4.2.2 Ranulph (Fiennes) The Ranulph prospect is formed by the dip closure of Triassic-aged Joanne and Judy sandstones against the western bounding fault of the Josephine ridge (Figure 8). Structural closure is defined at a number of stratigraphic levels including BCU, Top Triassic (for the Joanne reservoir) and Julius mudstone (for the Judy reservoir). Top seal is provided by Upper Jurassic shales and the Julius mudstone for the Joanne and Judy reservoir respectively.

Figure 8: Seismic Illustration of Ranulph Prospect (Data Courtesy of CGG)

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

10

4.2.3 Shackleton East Shackleton East is located to the west of well 30/13-2 where the Upper Jurassic J64 turbidite sands onlaps the Zechstein high penetrated by the well. An oil column is present in the J64 sands in the well and, assuming lateral and vertical communication, oil should be present in in any reservoir at a similar or shallower depth (Figure 9). Based on regional facies models some J62 sands may be preserved on the high; in addition transgressive sands (as in well 30/13a-9 to the south) or J64 turbidites (as in well 30/13-2) may be present. The trap is stratigraphic and relies on a basal seal of the underlying Zechstein and a top seal of Kimmeridge Clay or Lower Cretaceous shales. The area of the prospect is defined by the outline of the Zechstein ridge and its location up-dip of the sands in well 30/13-2 (Figure 9).

Figure 9: Seismic Illustration of Shackleton East and West, and Oxley Prospects (Data Courtesy of CGG)

4.2.4 Shackleton West Shackleton West is located on the north-western edge of the Josephine ridge, adjacent to and up-dip of Shackleton East (Figure 9). It is defined as a structural closure at BCU level and is likely to contain Upper Jurassic J62 and J64 sands as potential reservoirs. 4.2.5 Oxley Oxley is a stratigraphic truncation trap where J64 and younger turbidite sands sub-crop the BCU and are overlain by Lower Cretaceous shales and Upper Cretaceous chalk (Figure 9). The area of Oxley is defined as up-dip of the 3 ft. thick net oil-bearing J64 sand in well 30/13-2. The greater part of the Oxley prospect lies outwith Block 30/13a (West).

Licence P.079, Block 30/13a Contract Area C (West) Relinquishment Report

November 2015

11

5. Resources Summary 5.1 Discoveries 5.1.1 Talbot

p90 p50 p10

STOIIP (MMstb) 32.2 44.4 107.6

Resources (MMboe) 9.7 13.3 36.6

Table 2: Talbot Resources Summary The key risks on the resources are the potential barriers between wells 30/13-2 and 30/13a-9 and the undefined suture separating the lobes. Recovery factors have been estimated based on reservoir simulation models that have been built using all available data and are consistent with the performance observed at Orion and Judy. 5.1.1 Tr1

p90 p50 p10

STOIIP (MMstb) 43 62 89

Table 3: Tr1 STOIIP Summary The image log from well 30/13a-9 indicates a number of faults intersecting the reservoir section and therefore vertical compartmentalisation is highly likely. This, coupled with low GOR fluids and limited aquifer support, will result in poor drive and recovery factors are unlikely to exceed 5 – 10%. 5.2 Prospects STOIIP (MMstb) Mean p90 p50 p10

Ginny (Jurassic) 111 19 68 246

Ranulph (Triassic) 47 6 26 106

Shackleton East (Jurassic) 21 11 20 33

Shackleton West (Jurassic) 29 15 27 44

Oxley (Jurassic) 12 6 11 20

Table 4: Prospect STOIIP Summary 6. Clearance Talisman Sinopec Energy UK Limited (TSEUK), as the operator of Block 30/13a (West), confirms that permission has been sought and gained from CGG to publish the seismic data images contained within this report.