Relinquishment Report for

Licence P2055

Estimates, statistics, opinions and forecasts contained in this document are based on TOTAL’s own information and knowledge. They are provided in good faith, but, by their nature, are based on a number of assumptions and are subjective. Readers should therefore carry out appropriate reviews and due diligence to satisfy themselves as to all information contained in this document including, without limitation, TOTAL’s opinions, prospect evaluations, reserve figures, production and cost forecasts and all technical aspects of production, transmission and other facilities. While this information was prepared in good faith, no representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted by TOTAL or any of their respective affiliates or subsidiaries, employees, officers, directors and agents as to, or in relation to, the accuracy or completeness of this document and any liability thereof is hereby expressly disclaimed.

In furnishing this Relinquishment Report, TOTAL undertakes no obligation to provide the recipient

with access to any additional information.

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TABLE OF CONTENTS:

1 LICENCE INFORMATION ...............................................................................................................3

2 LICENCE SYNOPSIS .......................................................................................................................3

3 WORK PROGRAMME SUMMARY .................................................................................................4

4 DATABASE ..................................................................................................................................5

5 PROSPECTIVITY UPDATE ..............................................................................................................8

5.1 PROVENANCE AND PROVENANCE WEST A & B PROSPECTS ....................................................................... 8 5.2 ADDITIONAL PROSPECITIVTY .............................................................................................................. 11

6 FURTHER TECHNICAL WORK UNDERTAKEN ................................................................................ 12

7 RESOURCE AND RISK SUMMARY ................................................................................................ 12

8 CONCLUSIONS ........................................................................................................................... 12

9 CLEARANCE ............................................................................................................................... 12

TABLE OF FIGURES:

Figure 1: Location of P2055 Licence .............................................................................................................. 4 Figure 2: 214/17-1 well summary ................................................................................................................. 6 Figure 3: 214/21a-2 well summary ............................................................................................................... 6 Figure 4: P2055 Seismic Coverage Map ........................................................................................................ 7 Figure 5: Uplift in seismic quality from the vintage PGS MegaSurvey to the new Galloway data ............... 8 Figure 6: Old vs. new Provenance Top Reservoir Depth Maps .................................................................... 10

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1 LICENCE INFORMATION

Licence Number: P2055 Licence Round: 27th Round licence Licence Type: Traditional Block Number: 214/22 Relinquished: 31st December 2016 Total E&P UK Ltd confirms OGA is free to publish this report and that all third party ownership rights have been considered and appropriately cleared for publication purposes.

2 LICENCE SYNOPSIS

Licence P2055, covering block 214/22, was awarded to Total E&P UK (Total 60%, Nexen 40%) as part of the 27th UKCS Licensing Round. The Licence was covered by an Initial Term of 4 years from the Start Date of January 1st 2013, with a Drill-or-drop decision due after a 4 year period from the Start Date with the initial term expiring on the same date.

The main prospects identified at the time of the 27th Round application were the Palaeocene

Provenance, Provenance West A and Provenance West B.

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Figure 1: Location of P2055 Licence

3 WORK PROGRAMME SUMMARY

The P2055 work programme consisted of a firm commitment to: Shoot 410km2 of 3D Long Offset seismic data, processed to PreSDM

Undertake an AVO study

With a Drill-or-drop provision to: Drill one well to 4100m TVDSS or to the base Tertiary, whichever is the shallower; or

Elect to allow the licence to automatically cease.

All the firm work commitments have been completed, with the acquisition of 165km2 within the P2055 Licence (as part of the 1200km2 of Long Offset proprietary 3D broadband seismic data acquired by PGS). Subsequent processing to PreSTM and PreSDM seismic products were performed by PGS and Schlumberger respectively. The final datasets are referred to in this report as “Galloway 3D PSTM/PSDM” respectively. The AVO study has been performed using the latest reprocessed seismic data as input.

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4 DATABASE

Well data

There are currently no well penetrations on the P2055 Licence. Well 214/17-1 (Figure 2) was drilled by Mobil in 1998 just to the north of the P2055 licence. The well was targeting the Eocene Strachan Fan and it encountered a series of interbedded sands/shales with occasional thin tight limestones/calcareous cemented layers. The target reservoir was found to be water-bearing (no hydrocarbon shows). This well was mainly used to constrain the velocity information used in the time-depth conversion of the interpreted horizons over the P2055 area. The South Uist well 214/21a-2 (Figure 3) was drilled by Shell in 2009 on the P799 Licence, and is located to the west of the P2055 licence. The well did not encounter any reservoir quality rocks within the Cretaceous interval and found 2 water wet sandy intervals in the overlying Palaeocene. This well was used to constrain the velocity information used in the time-depth conversion of the interpreted horizons over the P2055 area.

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Figure 2: 214/17-1 well summary

Figure 3: 214/21a-2 well summary

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Seismic Data

The new Galloway 3D seismic dataset (Figure 4) shows marked improvements in imaging quality

compared to the pre-existing datasets, i.e. the non-proprietary CGG 2009 and PGS FSB MegaSurvey

2012 datasets. The improvement is evident below the Base Balder, within the Lower Palaeocene and

Cretaceous sections, where the improved imaging allowed for more precise horizon picking and better

interpretation of faults and volcanic intrusions (Figure 5).

Figure 4: P2055 Seismic Coverage Map

Besides the Kirchhoff migrated structural and angle stacks, the PSDM processing also included an Image Domain Beam (or IDB) migration full-stack volume for structural interpretation, which presented a less noisy seismic image with better reflector continuity, while maintaining good fault definition.

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Figure 5: Uplift in seismic quality from the vintage PGS MegaSurvey to the new Galloway data

A new AVO seismofacies volume was generated from the new Galloway 3D seismic dataset. Furthermore, a new velocity model was built using the available seismic velocities extracted from the 3D Galloway PSDM and incorporating the vertical velocity information from the 214/17-1 and 214/21a-2 wells located within the seismic survey area.

5 PROSPECTIVITY UPDATE

5.1 Provenance and Provenance West A & B Prospects

The Provenance prospect, the primary reason for the licence application, is located approximately 40km north-east of the Laggan-Tormore oil and gas fields and to the east of the Total E&P UK operated Corona Ridge licences P2017 & P2214.

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Total E&P UK Ltd previously operated Licence P1572, consisting of Blocks 214/17, 214/21b and 214/22.

This licence was fully relinquished in December 2011. At the time of the P1572 Licence, the object

Provenance had already been evaluated and was considered to be a valid prospect albeit of limited size

(24.2 Mboe of Mean Unrisked Resources). The application on Provenance aimed at improving the trap

geometry and AVO support of Provenance main and upsides.

The Lower Palaeocene T22 Provenance (main) prospect is located in Block 214/22. It consists of a 3 way-dip structural trap against a normal fault, however with a much smaller closure than had been mapped at the time of the 27th Round application. Provenance West A and Provenance West B are two additional prospects of the same age to the south-west of Provenance. At the time of the application, Provenance West B required a stratigraphic component to close the trap to the south. It is now viewed as a purely structural trap thanks to the uplift of the seismic image quality on the new Galloway PSDM. All three structures are located close to the Corona Ridge, where the whole Lower Palaeocene section pinches-out onto the ridge.

The expected reservoir can be correlated reasonably well, but with some remaining uncertainties, with the T22 sandstones encountered at the 214/21a-2 South-Uist well in 2009, which demonstrated good reservoir properties.

Provenance was historically supported by an AVO anomaly and while the new AVO computation based on the 3D Galloway PSDM dataset still preserves a weak AVO anomaly over the prospect, the extended seismic coverage suggests that these AVO anomalies do not conform to the structural closures and extend updip, north-westwards, towards the Corona Ridge. 1D seismic modelling demonstrates that there is a significant risk that the observed AVO responses have a lithological origin linked to the interference caused by volcanic intrusions rather than due to a hydrocarbon (gas) effect.

The lateral seal effectiveness is believed to be the main risk on the three prospects. The other significant risk is the reservoir presence; the T22 sands in 214/21a-2 well exhibit a complex acoustic contrast to the surrounding shales, which makes the otherwise good correlation between the well and the top reservoir at Provenance less than certain. After the re-interpretation using the Galloway PSDM dataset, Provenance, Provenance West A and Provenance West B prospects are viewed to be overall smaller and riskier than when evaluated at the time of the 27th Round (Figure 6)

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Figure 6: Old vs. new Provenance Top Reservoir Depth Maps

Gas scenario 100% Resources

P90 P50 P10 Mean Risked Mean (Mboe)

Provenance (PoS 12%)

Non Assoc Gas (Bcf) 72.9 108.3 152.4 110.9 1.5

Cond. (MMbbl) 1.1 1.7 2.5 1.8

Gas scenario 100% Resources

P90 P50 P10 Mean Risked Mean (Mboe)

Provenance West A (PoS 12%)

Non Assoc Gas (Bcf) 32.8 50.7 74.0 52.4 0.7

Cond. (MMbbl) 0.5 0.8 1.2 0.8

Gas scenario 100% Resources

P90 P50 P10 Mean Risked Mean (Mboe)

Provenance West B (PoS 12%)

Non Assoc Gas (Bcf) 33.4 55.6 94.2 60.5 0.8

Cond. (MMbbl) 0.5 0.9 1.5 1.0

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The current evaluation, updated from the new 3D seismic data, downgrades the volumetrics on Provenance. This decrease in resources means that Provenance is no longer economically viable. Therefore, drilling a well cannot be justified.

5.2 Additional Prospectivity

In addition to the prospects identified at the time of the 27th Round a full screening has been undertaken on the P2055 Licence. No significant additional prospectivity has been identified as discussed below. T22 Lead: A seismic horizon representing the top T22 sequence, which is the top reservoir level at the Provenance prospect, shows small structural closures mainly within the neighbouring Licence P2204, but extending into P2055. A topography favorable to stratigraphic trapping at this level cannot be ruled out, however as already discussed in the previous section, the observed amplitude and AVO seismofacies anomalies were found not to conform to any mapped closure and are believed to originate from the seismic interference with the volcanic intrusions. A possible stratigraphic trap has been identified in the potentially sand-rich interval below the Base Balder. The available AVO seismofacies cube was used to check for anomalies along the pinch-out location, however none was observed. The regional Base Balder depth map shows no evidence for a lateral closure and so the lack of fluid indication on the AVO at a burial depth of about 2000m TVDSS would suggest that no efficient stratigraphic lateral trapping mechanism exists either. There is a small structural closure at Base Balder level in the southern part of the P2055 Licence. A cross-section along the crest of the structure highlights that the structure is a tilted fault block, i.e. a small 4-way dip structure overlying a 3-way dip closure against a SW-NE trending normal fault. However, with an area of just 1.5km2, it is not a significant enough exploration target to warrant further evaluation. Eocene injectite lead:

A small lead of a different play type has been identified on the P2055 licence. A high amplitude reflector to the side of the Strachan fan was interpreted as a sand injectite sourced from the flank of the main body of the fan. The extent of the brightest and most continuous AVO anomaly corresponds to an area of 6 km2 . However, the mapped extent is tentative at best, as the anomaly doesn’t stand out against a clear transparent background trend. Instead, the entire wedge of the Strachan Fan remains visible on the AVO seismofacies cube, suggesting that the anomaly may be of primarily lithological origin.

No other significant intra-Eocene objects have been identified.

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6 FURTHER TECHNICAL WORK UNDERTAKEN No additional technical work was undertaken.

7 RESOURCE AND RISK SUMMARY No discovered resources lie within the P2055 Licence. The nearest discovered resource is the 213/25c-1V pre-BCU North Uist gas condensate discovery, situated to the west of the licence.

8 CONCLUSIONS

The licence was applied for in the 27th Round due to the presence of an AVO supported prospect

with marginal economics, but with the possibility to be tied-back to the potential pre-BCU

Galloway development.

The licence was fully relinquished in December 2016 due to the significant downgrade to the

Provenance prospects, largely due to the absence of AVO support and an increased sealing risk.

9 CLEARANCE

Total E&P UK Ltd confirms OGA is free to publish this report and that all third party ownership rights have been considered and appropriately cleared for publication purposes. The 3D PGS seismic data is held under licence and is property of PGS.