Mature Basins Leading the Recovery047544c618901d21a046... · (1) Q2 2016 Resource Report (2) Net...
Transcript of Mature Basins Leading the Recovery047544c618901d21a046... · (1) Q2 2016 Resource Report (2) Net...
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Henry Morris
Mature Basins – Leading the Recovery
Finding Petroleum – 20th Sept 2016
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• Global exploration strategy trends
• Why the UKCS?
• Company Introduction
– & UK examples
Agenda
Finding Petroleum – 20th Sept 2016
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Global Exploration Strategy Trends
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Focus shift to near-term, lower risk and mature basins
Global exploration strategy trends (2014-2016)
Finding Petroleum – 20th Sept 2016
Source: Wood Mackenzie (Feb 2016)
4
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Focus shift to near-term, lower risk and mature basins
Global exploration strategy trends (2014-2016)
Finding Petroleum – 20th Sept 2016
Source: Wood Mackenzie (Feb 2016)
5
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Focus shift to near-term, lower risk and mature basins
Global exploration strategy trends (2014-2016)
Finding Petroleum – 20th Sept 2016
Source: Wood Mackenzie (Feb 2016)
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Focus shift to near-term, lower risk and mature basins
Global exploration strategy trends (2014-2016)
Finding Petroleum – 20th Sept 2016
Source: Wood Mackenzie (Feb 2016)
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Focus shift to near-term, lower risk and mature basins
Global exploration strategy trends (2014-2016)
Finding Petroleum – 20th Sept 2016
Source: Wood Mackenzie (Feb 2016)
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• Proportion of wells drilled in emerging plays reducing, but switching to drilling bigger
prospects in more mature basins
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REP40 by play maturity
Global high-impact exploration drilling
Finding Petroleum – 20th Sept 2016
Source: Richmond Energy Partners (2016)
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Source: Tethra Energy (Feb 2016)10
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Why the UK Continental Shelf?
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• Highest average commercial success rate (46%) since 2002
• Approximately 165 MMboe found through exploration, plus over 100 MMboe
progressed through Appraisal
12
Highest E & A success rate in over 10 years
UKCS 2015 Exploration Highlights
Finding Petroleum – 20th Sept 2016
)
Source: Hannon Westwood
“UKCS targeting Quality rather than Quantity”
Exp
lora
tio
n w
ell
co
un
t
Com
me
rcia
l S
ucce
ss %
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39.24
38.62
11.95
3.742.91
6.75
5.58
16.91
0
10
20
30
40
2012 2013 2014 2015
13
UK overtakes Norway
UKCS 2015 Exploration Highlights
Finding Petroleum – 20th Sept 2016
0%
10%
20%
30%
40%
50%
0
10
20
30
40
50
2012 2013 2014 20150
100
200
300
400
500
2012 2013 2014 2015
No. w
ells
CS
R
Dis
co
ve
red
vo
lum
es (
MM
bo
e)
Fin
din
g c
osts
($/b
oe
)
Source: Richmond Energy Partners
• UK performance improving and
overtakes Norway in 2015
• Increasing commercial success rates
and volumes discovered from the UK
Norway
UK
UK
Norway
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• Fourth generation Semi-Submersible currently on market for sub $150k/day
• Industry targeting 50% reduction in 2016 through ‘Oil & Gas UK 50% Challenge Group’
14
Well costs down 50% since 2013 and falling….
UK North Sea rig market
Finding Petroleum – 20th Sept 2016
Source: North Sea Reporter, Oil & Gas UK
Fo
recast
(60%
reduction)
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Excellent Fiscal Terms / Supportive Government
Why the UK Continental Shelf?
Finding Petroleum – 20th Sept 2016
“The government designs the fiscal regime to support its twin objectives of maximizing theeconomic recovery of hydrocarbon resources whilst ensuring a fair return on those resources forthe nation.”
HM Treasury (2016)
30%
35%
40%
45%
50%
55%
60%
65%
0
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
MA
RG
INA
L T
AX
RA
TE
FO
R
NE
W F
IEL
DS
BR
EN
T P
RIC
E (
$/B
BL)
SC increased from 10% to 20%
SC allowance introduced small field, heavy oil and HT/HP
investments
SC decreased from 32% to 20%.Simplification of allowance program
SC decreased from 20% to 10%.Expansion of Investment Allowances
Oil prices and UK fiscal reformsSC increased from
20% to 32%SC allowance
program enhanced
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• The UKCS has a set of world class
petroleum systems with a total of 43 billion
barrels of oil equivalent recovered to date
and a remaining 10-20 billion barrels of oil
equivalent yet to be recovered (Oil & Gas
UK).
• This includes 2-6 billion barrels of oil
equivalent of yet-to-find resources (Oil &
Gas UK).
16
Significant remaining potential
Why the UK Continental Shelf?
Finding Petroleum – 20th Sept 2016
On a global comparison, the UK is a must
have within a global E&P company’s portfolio.
Global analysis highlights that during lower oil
price environments, the UK provides one of
the best $/boe return-on-investment.
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Who are we?
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International offshore oil and gas investment group
The Funding: - Seacrest Capital Group
Finding Petroleum – 20th Sept 2016
1 Licence
2 blocks
6 licences,
12 blocks
3 licences,
33 blocks
14 licences,
24 blocks
25 licences,
48 blocks
2 licences,
2 blocks
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P1979
P1763P2150
P2278
P1989P2165
P1946
P2169
P2179
P2172
P2280
P2162
P2007
P1966
• Total of 14 Licences (5 operated)
• Contingent & Prospective Resources (1)
– Net Mean Unrisked Resources 1,151 MMboe
– Net Mean Risked Resources 288 MMboe
• Portfolio assets types
– 4 Discoveries
– 17 Prospects
– 11 Leads
• Average Licence Interest is 57%
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De-risked material exploration portfolio
Licence Portfolio Summary
Finding Petroleum – 20th Sept 2016
(1) Q2 2016 Resource Report (2) Net Mean Unrisked Resources (MMboe)
Licence Portfolio (Q2 2016)
108, 9%
1043, 91%
Resource Type (2)
Contingent Prospective
1041, 90%
110, 10%
Fluid Type (2)
Oil Gas
MC3D Geostreamer
Other Conventional
MegaSurvey Plus
MegaSurvey
Seismic database
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0
50
100
150
200
250
300
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Ris
ke
d P
ort
folio
Re
sou
rce
s (
net
MM
boe)
Prospective
Contingent
20
Rapid organic & inorganic growth over the last 2 years
Company Evolution
Finding Petroleum – 20th Sept 2016
288 (1)
275
213216
191188
121
56
21 21
(1) Q2 2016 Resource Report
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• Seismic to underpin future exploration activity
– Over 26,000 sqkm latest generation Broadband 3D
seismic
– >110,000 sqkm conventional 3D seismic
• Empowers Exploration team to use cutting edge
data to de-risk the basin’s prospectivity
Advance Quantitative Interpretation
• Azinor Catalyst has integrated the best Seismic
data with Advanced Quantitative Exploration
techniques to give them a strategic edge.
• Provides geoscientists and management with a
simplified understanding of the Lithology/Porosity
and Fluid fill in the subsurface.
• Regional understanding and a local targeted
Quantified Focus.
21
One of the UK’s largest Seismic Databases
Our Technology Edge
Finding Petroleum – 20th Sept 2016
P1966
Seismic Footprint
MC3D Geostreamer
Other Conventional
MegaSurvey Plus
MegaSurvey
Seismic database
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Why Broadband? - Improved imagery, better understanding….
Investing in Technology Upfront
Conventional Broadband True reflectivity
• Reservoir property prediction enhanced by
more low frequency information
• With a Broadband approach low frequencies
from the wells are less critical
• Increased high frequencies provide better
vertical seismic resolution
• Better signal to noise at range of depths
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Low Risk Mature Basin Opportunities
‘Drill-Ready’ Assets
Finding Petroleum – 20th Sept 2016
95 MMboe / COS 37%
P2165
126 MMboe / COS 34%
P2179
32 MMboe / COS 41%
P2169
119 MMboe / COS 40%
P1989
Gross Pmean/Mid Case Rec. Resources
15 MMboe / COS 52%
P1763
Base CretaceousTWT structure
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‘Drill-Ready’ Assets
Finding Petroleum – 20th Sept 2016
95 MMboe / COS 37%
P2165
126 MMboe / COS 34%
P2179
32 MMboe / COS 41%
P2169
119 MMboe / COS 40%
P1989
Gross Pmean/Mid Case Rec. Resources
15 MMboe / COS 52%
P1763
Base CretaceousTWT structure
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Low Risk Mature Basin Opportunities
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Deep imaging enhancements - Boaz (P2165)
Finding Petroleum – 20th Sept 2016
Top Chalk
BCU
Top Sleipner
??
Base Chalk
??
Eirin Gina KrogBoaz
Boaz
Eirin
Gina Krog
UK16/8a-10 NO15/5-2NW SENO15/5-1
BP 1993 Miller 3D
TD in TriassicTD in Sleipner
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Deep imaging enhancements - Boaz (P2165)
Finding Petroleum – 20th Sept 2016
Top Chalk
BCU
Top Sleipner
Top Triassic
Top Permian
Base Chalk
Boaz
Eirin
Gina Krog
Eirin Gina KrogBoaz
UK16/8a-10 NO15/5-2NW SENO15/5-1
PGS 3D Geostreamer 2012 & 2013
TD in TriassicTD in Sleipner
Mean Recoverable – 95 MMboe
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‘Drill-Ready’ Assets
Finding Petroleum – 20th Sept 2016
95 MMboe / COS 37%
P2165
126 MMboe / COS 34%
P2179
32 MMboe / COS 41%
P2169
119 MMboe / COS 40%
P1989
Gross Pmean/Mid Case Rec. Resources
15 MMboe / COS 52%
P1763
Base CretaceousTWT structure
27
Low Risk Mature Basin Opportunities
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Historical 2D data (1990’s)
‘Partridge’ prospect (P1989)
TW
TT
(m
s)
Scapa SstInterval: 26 m
Net/gross: 59%
Porosity: 22%
Water-wet
Scapa Sst
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3D Geostreamer 2013
‘Partridge’ prospect (P1989)
TW
TT
(m
s)
Courtesy of PGS
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3D Geostreamer 2013
‘Partridge’ prospect (P1989)
TW
TT
(m
s)
Courtesy of PGS
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Quantitative Fluid & Lithology Prediction
‘Partridge’ prospect (P1989)
TW
TT
(m
s)
Gra
die
nt Im
pedance (
GI)
Acoustic Impedance (AI)
Partridge
BCU
Top Valhall
Oil
Water
Shale
Mean Recoverable - 119 MMboe
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Technical Summary
Finding Petroleum – 20th Sept 2016
• Lower Cretaceous Scapa Sst stratigraphic trap
• Oil prone prospect
• Gross recoverable resources – P90 case 21 MMboe
– Pmean case 119 MMboe
– P10 case 260 MMboe
– Best Technical 113 MMboe
• Geological Chance of Success 40%
• Reservoir target 2115 m TVDSS (6940 ft)
• Water depth 130 m MSL (425ft)
• Robust economics under a standalone FPSO
development
– Minimum commercial field size of 18 MMboe at $60/bbl
• Dry well cost – $8.2MM
‘Partridge’ Prospect
33
‘Partridge’
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‘Drill-Ready’ Assets
Finding Petroleum – 20th Sept 2016
95 MMboe / COS 37%
P2165
126 MMboe / COS 34%
P2179
32 MMboe / COS 41%
P2169
119 MMboe / COS 40%
P1989
Gross Pmean/Mid Case Rec. Resources
15 MMboe / COS 52%
P1763
Base CretaceousTWT structure
34
Low Risk Mature Basin Opportunities
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35
Burnt Island (P2169) - ‘Raw’ Seismic
Bringing ‘Quantitative Predictions’ into Exploration
Burnt Island
Grevling
22m Hugin
Water
<15m Hugin
Water
27m Hugin
Oil
BCU
Burnt
Island
Grevling
15/12-11S 15/12-18S15/12-21
Courtesy of PGS
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36
Burnt Island (P2169) – ‘Conditioned’ Seismic
Bringing ‘Quantitative Predictions’ into Exploration
Burnt Island
Grevling
22m Hugin
Water
<15m Hugin
Water
27m Hugin
Oil
BCU
Sleipner
15/12-11S 15/12-18S15/12-21
Burnt
Island
Grevling
Courtesy of PGS
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Quantitative Fluid & Lithology Prediction
Bringing ‘Quantitative Predictions’ into Exploration
‘
West – East arbitrary line showing Burnt Island and Grevling anomalies. Wet wells do not show an oil
response.
+
WATER/SHALE
Burnt Island
Grevling
22m Hugin
Water
<15m Hugin
Water
27m Hugin
Oil
BCU
Sleipner
15/12-11S 15/12-18S15/12-21
OIL
Intercept Gradient projection (fluids)
Mean Recoverable
37 MMboe
Burnt
Island
Grevling
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‘Drill-Ready’ Assets
Finding Petroleum – 20th Sept 2016
95 MMboe / COS 37%
P2165
126 MMboe / COS 34%
P2179
32 MMboe / COS 41%
P2169
119 MMboe / COS 40%
P1989
Gross Pmean/Mid Case Rec. Resources
15 MMboe / COS 52%
P1763
Base CretaceousTWT structure
38
Low Risk Mature Basin Opportunities
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• Agar discovery (2014) made by
9/14a-15A
• Drilled 33ft of oil-bearing Frigg
sands. No OWC was identified.
• String of pearls style series of
amplitude anomalies extending
down-dip of the discovery well
• Represent an Eocene deep water
channel complex (but possibility
remains that it is intruded by
injectites)
• Stratigraphic trapping mechanism
• A number of similar prospects on
the licence.
39
Prospect Technical Summary
P1763 – Agar Discovery
Slope apron/Shelf edge/Mass flow Sand Prone Area
9/14a-15A
Courtesy of PGS
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Tier 1 (Drill Ready)
Tier 2
Tier 3
40
High-graded portfolio assets (Tier 1)
Robust Economics
Finding Petroleum – 20th Sept 2016
250
0% 20% 40% 60% 80% 100%0
50
100
150
200
Geological Chance of Success
Un
risk
ed R
eso
urc
es (
MM
bo
e)
PartridgeHinson
Boaz
Burnt Island
Agar
(1) Gross recoverable resources (2) Gross dry hole cost
5
10
20
40
Asset maturity
Net Risked Resources (MMboe)
Licence AssetWell cost (2)
$MM
Pre-drill (1)
Pmean (P10)
MMboe
Breakeven
NPV10
NPV10 (1)
$MMIRR
P1989 Partridge 7.9 119 (260) $35/bbl 692 34%
P1763 Agar 6.8 15 (52) $47/bbl 100 38%
P2179 Hinson 21.4 126 (255) $11/bbl 1,224 73%
P2165 Boaz 19.5 95 (205) $17/bbl 545 37%
P2169 Burnt Island 10.3 32 (71) $26/bbl 218 37%
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41
Summary
Finding Petroleum – 20th Sept 2016
Significant resource potential
High materiality exploration assets
Multiple opportunities +/- 100 MMboe (mid case)
Low risk
Portfolio de-risked utilising latest generation
broadband seismic datasets
High-graded assets with associated DHIs
Commercially attractive
Low breakeven economics (< $40/boe)
Benefit from significant industry cost deflation
Infrastructure led
Assets positioned around good quality & easily
accessible infrastructure
Reduced cycle time exploration
Excellent fiscal terms
Highly globally competitive
40% marginal tax rate on new projects
‘High Impact’ opportunities in a low risk basin
P1979
P1763P2150
P2278
P1989P2165
P1946
P2169
P2179
P2172
P2280
P2162
P2007
P1966
Azinor Catalyst Portfolio
MC3D Geostreamer
Other Conventional
MegaSurvey Plus
MegaSurvey
Seismic database
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42
Thank you
Azinor Catalyst Limited
192 Sloane Street
London SW1X 9QX
United Kingdom
www.azinorcatalyst.com
Tel: +44 (0)20 3588 0065
“Revitalising UKCS Exploration through the
application of advanced technology”