LICENCE RELINQUISHMENT REPORT

UKCS P1668

BLOCKS 43/26b & 43/27b

E.ON RUHRGAS UK NORTH SEA LTD

August 2011

CONTENTS

LIST OF FIGURES

1) SUMMARY

2) LICENCE INFORMATION

3) PROSPECTIVITY

4) RESOURCES SUMMARY

5) CLEARANCE

LIST OF FIGURES

Fig 1 Southern North Sea Asset Map

Fig 2 Johnston Field Asset Map

Fig 3 Representative Seismic Line Across Johnston Head & New Head

Fig 4 Johnston Top Reservoir Depth Map

SUMMARY

Licence P1668 comprises Block 43/26b and 43/27b (Fig 1, 2), was acquired in the 25th

Offshore Licensing Round awarded to a group comprising ERUK and Dana on 12 February

2009. The conditions of award were a drill or drop decision within 2 years and the JV

concluded that it was not attractive to drill a well within this timeframe and

relinquishment was effective 12 February 2011.

P1668 is adjacent to Johnston Field that has been in production since 1994 and was

developed via 5 wells as a subsea tie-back to the Ravenspurn North Field. Infill well

potential exists within the North Western part of Johnston - the “Head” area of the field.

The Johnston Field co-venturers identified a potential extension of Johnston Field – the

“New Head” on P1668. The main uncertainties surrounding the New Head were identified

as the connection / separation of the New Head from Johnston Field. The proposed work

programme to satisfy the award conditions comprised a dual lateral well drilled from the

existing Johnston Template that accessed both the New Head and the Head. Johnston

Head is depleted by production from the existing development wells and the New Head

was anticipated to be at or near virgin pressure – causing significant challenges to drilling

and completing the two legs.

The Johnston Field Reservoir is aeolian and fluvial sandstones inter fingering with sabkha

and playa lake siltstones and claystones. Top seal is the overlying Silverpit Claystone and

Zechstein evaporites.

The seismic interpretation of Johnston Field and P1668 is based on a reprocessed dataset

generated in 2006-07. The field data from five 3D surveys were time processed by CGG

and merged before pre-stack depth migration (PrSDM). Post-stack processing was

completed in April 2007. Data quality is good and the top Leman event can be picked with

reasonable confidence - even in areas of poorer imaging, such as below Plattendolomite

rafts.

Fig 1 Southern North Sea Asset Map

Fig 2 Johnston Field Asset Map

New Head

Head

De Keyser

Tail

LICENCE INFORMATION

Licence P1668

Blocks 43/26b & 43/27b

Conditions Drill one well to 3150m or 50m into the Carboniferous

whichever is shallower, or elect to relinquish the

licence within two years of award.

Round Awarded 25th

Date Awarded February 12, 2009

Date Relinquished February 12, 2011

Operator E.ON Ruhrgas UK North Sea Ltd (50%)

Co-Venturer Dana Petroleum (E&P) Ltd (50%)

PROSPECTIVITY

The seismic interpretation is based on an output area of 432sqkm reprocessed dataset

generated in 2006-07. The field data from five 3D surveys were time processed by CGG

and merged before PrSDM. The post-stack processing was completed in April 2007. Overall

data quality is good.

A Mesozoic graben orientated ENE - WSW lies above the Head of the Johnston Field that

materially affects local depth conversion.

PrSDM mapping showed a second tilted fault block north of Johnston field proper – the

New Head. There is no dip closure separating the New Head from the water bearing

43/26b-9 well – therefore if the New Head shares the Johnston field FWL, then a NNE

orientated De Keyser fault along the NW flank of the New Head would have to be sealing

(Fig 2). The risks on this scenario were the main reason for the Licence to be relinquished

before drilling.

Fig 3 Representative Seismic Line Across Johnston Head & New Head

Template

J1 J3, 3Y

Bunter Ss

Triassic

Corallian

Zechstein

RotliegendesLeman Ss

Plattendolomite

New HeadOld Head

PrSDM is 43m

too deep at J1

K LS2

NNE SSW

Fig 4 Johnston Top Reservoir Depth Map

The “Kumatage” lead also lies on P1668. This feature was drilled by the BHP operated

43/26b-10 well in 1998. This well penetrated 243ft of gas bearing Lower Leman

Sandstones. The well flowed at 53,000SCF/D on test and the P1668 JV considers the

Kumatage feature sub commercial.

RESOURCES SUMMARY

Johnston New Head (P1668) Probabilistic OGIP

Low 21BCF

Mid 42BCF

High 69BCF

CLEARANCE

E.ON Ruhrgas UK North Sea Ltd confirms that the Department of Energy and Climate

Change is free to publish the contents of this report.