P1161 Relinquishment Report · An RFT oil gradient interpretation by PGL of 0.347psi/ft also...

Licence�P1161Relinquishment�Report

March�2013

Freya�� Norse�goddess�of�love�and�beauty

Document last updated 15-04-2013 16:18 BST

P1161 Relinquishment Report


1 Licence Data 1

2 Synopsis 2

3 Exploration Activities 2

3.1 Seismic 23.2 Well 3

4 Prospectivity Analysis 4

4.1 Freya Discovery (206/10a-1) 44.2 Fulla Discovery (206/5a-3) 8

5 Conclusions 12

6 Clearance 12

List of figures

1.1 P1161 Summary Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3.1 P1161 Seismic acquisition programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4.1 NE-SW seismic section through Freya discovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4.2 206/10-1 CPI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.3 206/10a-1 core porosity-permeability plot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.4 Freya Probablistic Volumes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.5 206/5a-1 CPI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.6 206/5a-1 CPI Pay Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.7 BCU Regional Depth Structure map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.8 Fulla Volume Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

List of tables

1.1 P 1 1 6 1 L i c e n c e d e t a i l s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1 Licence Data

Table 1.1

Table 1.1 P1161 Licence details

Fig. 1.1

Fig. 1.1 P1161 Summary Map


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2 Synopsis

The history of block 206/10 starts with the drilling of the 1980 Freya discovery well, 206/10a-1, by Mobil which encountered oil bearing sands in the Devonian-Carboniferous Clair Group and in the overlying Cretaceous sandstones. A 300m hydrocarbon column was proven, however DSTs were inconclusive as the well did not flow to surface, although oil was reversed out of the test string. The result was attributed as a heavy oil accumulation (<18o API with low cP viscosity) and therefore sub commercial which resulted in Mobil abandoning the licence.

Licence P1161(blocks 206/5 & 10) was acquired by Faroe Petroleum (100%) as Frontier acreage in 2005 during the UK 22nd licensing round with a 2D seismic acquisition (500km) and 2D seismic reprocessing (300km) work programme. The seismic acquisition & reprocessing was successfully completed and the licence partially (75%) relinquished as per the Frontier Licence terms (206/5a & 10a). After a negotiated licence extension, Canadian Overseas Petroleum Ltd (COPL) acquired a 50% equity stake in the licence and an exploration well was drilled in the summer of 2011.

A further partial relinquishment occurred in October 2011, before the licence was finally and fully relinquished on 30th November, 2012.


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3 Exploration Activities

Over the course of the licence term, Faroe Petroleum acquired over 300km of 2D seismic data, re-processed over 300km of data, and drilled an exploration well, 206/5a-3, to target the Fulla exploration prospect. These activities are summarised below;

3.1 SeismicIn order two fulfil firm work programme commitments, on acquiring the P1161 licence in 2005 Faroe Petroleum initiated the following activities;

Acquisition Between the 26th April and 13th May 2005 Fugro-Geoteam, on behalf of Faroe Petroleum, acquired 14 lines of 2D seismic totalling 280km (FP05206). The following year, Fugro-Geoteam acquired an additional three lines over the Freya discovery (FP06206) - see Fig. 3.1

Reprocessing The 2D data reprocessing of the FP05206 survey and the subsequent FO06206 infill survey carried out during September 2005 to March 2006 by GDC UK Ltd on behalf of Faroe Petroleum (UK) Ltd. The area surveyed included Blocks 206/5 and 206/10. In general the quality of the supplied data was good and satisfactory results were achieved in the processing.

On completion of the 2005 processing, it was apparent that a critical part of the structure was not adequately defined from the location of these acquired 2D lines. This resulted in Faroe Petroleum acquiring three further infill lines in 2006. The acquisition geometries employed were very similar and as such, the processing parameters determined from testing on the 2005 survey were applied to the 2006 data.

Further details can be found within the Final Re-Processing report supplied be Geokinetics, dated November 2007.

Fig. 3.1 P1161 Seismic acquisition programme


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3.2 WellWell 205/5a-3 was spudded (see Table 1.1) on 7th July, 2012 and on the 14th August the top Cretaceous sand and top Clair Group Reservoirs were encountered within 10ft of their prognosed depths . A gross hydrocarbon bearing interval of 132ft was penetrated in the Cretaceous with a further 1,284ft of gross Clair sandstones beneath. The Clair Group, with the exception of the upper 50-100ft appeared to be water wet, but with a high residual oil saturation, occasional oil shows, and a high background gas readings. An initial logging run was performed (Platform Express) and the subsequent petrophysical analysis indicated 25ft of Pay in the "Whiting" with an additional 8ft in the Clair. On the strength of this result the full success case logging programme was initiated which included sonic and image logs, MDT fluid sampling, a VSP and side-wall coring. The wireline operations successfully concluded on Sat 20th August and the well was finally abandoned on 1st September 2013.

The well results and interpretation are discussed in more detail within section 4.2 Fulla Discovery (206/5a-3).

4 Prospectivity Analysis

There are two main discoveries, Fulla & Freya, which form the prospectivity of licence P1161.


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4.1 Freya Discovery (206/10a-1)

Introduction Well 206/10a-1 was drilled by Mobil in 1980, and encountered oil bearing sands in the Devonian-Carboniferous Clair Group as well as the overlying Cretaceous sandstones (Fig. 4.1). A 300m hydrocarbon column was proven however DSTs were inconclusive as the well did not flow to surface, although oil was reversed out of the test string (Fig. 4.2). The discovery was attributed as a heavy oil accumulation (<18o API with high viscosity) and therefore sub commercial which resulted in Mobil abandoning the licence

Fig. 4.1 NE-SW seismic section through Freya discovery.

Fig. 4.2 206/10-1 CPI

Faroe Petroleum believed that due to the subsequent development of the nearby Clair field which contained heavy oil within the same stratigraphic interval, the Freya discovery was now therefore an attractive appraisal opportunity. In order to progress towards a firm well commitment it was felt that three critical factors needed to be addressed, namely oil & reservoir quality and volume;

Oil Quality A significant uncertainty existed over the quality of the oil acquired. At the time of drilling, the well site reported that a 22o API oil was recovered from DST #5. The DST itself failed to flow, for a variety of possible reasons discussed below, so the only fluids acquired were reversed out of the test string and therefore contaminated with diesel. Because of the contamination, the subsequent PVT analysis was uncertain however a c.15o API crude was attributed to be the most likely hydrocarbon phase. It was on this


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basis that Mobil originally relinquished the licence, however on re-analysis, it was Faroe Petroleum's view that given the contamination issue and the failure to acquire a fully pressurised sample, there was a strong possibility that the fluids were a closer match to the 22o API fluids found at the Clair Field.

An RFT oil gradient interpretation by PGL of 0.347psi/ft also suggested a relatively light oil, however a detailed analysis of the RFT points demonstrates a high degree of scatter and uncertainty, so this interpretation is not the only one that could be drawn.

DST Failure Reasons for the five DST failures were subsequently attributed to the low API oil quality and associated viscosity. However a closer analysis of the DST operation threw up the following issues;

The well was perforated over-balance under full mud column High perforation gun standoff Low shot density 2-4 shots/ft in 9 5/8" hole Low maximum draw-down therefore no flow to surface, as well did not clean up Oil/water emulsions may have plugged the reservoir

Equally it was apparent that a few of the early Clair discovery/appraisal wells (1977-1982) also failed to flow from vertical well bores, and it was only after the later switch to a horizontal drilling campaign in 1991 that the Clair Field began to look an economic possibility. For these reasons it was felt that the DST failure was not necessarily indicative of a heavy fluid.

Reservoir Quality Well 206/10a-1 was logged and an accurate assessment of reservoir quality obtained (Fig. 4.3). The results indicated that Freya contained moderate reservoir quality, similar to slightly better than that of the Clair Field. Evidence was also apparent that fractures were also present, as observed at Clair where there are actively targeted with long horizontal wells to increase permeability, so it was concluded that the reservoir quality would not be an impediment to an economic development.

Volumes Based on a detailed zoning of the Clair Group which adopted the same scheme first developed by BP at Clair, a Static model was created in Petrel in order to realise the most likely range of in-place and recoverable volumes. The resulting distribution indicated a Mean STOIIP figure of 141mmbls with a P90 of 108mmbls, a P50 of 136mmbls and a P10 of 182mmbls (Fig. 4.4). The estimate of recoverable volumes was afar more difficult task due a large uncertainty in recovery factor, however a mean recoverable figure of 35mmbls was obtained, equating to a recovery factor of just over 20%.

Conclusions The oil quality issue was clealry the one with the largest uncertainty, and therefore the primary objective of any subsequent appraisal drilling would be to acquire a live, pressurised oil sample for PVT analysis.

However, based on an economic assessment, it was clear that as the minimum economic field size was close to the mean reserve figure and therefore it was decided that rather than planning a Freya appraisal well, the nearby Freya North/Fulla prospect should now be the main focus. The reasoning being that not only could a live PVT sample be acquired, but also crucially, a significant upside volume could be obtained thereby making the project economics more robust.


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Fig. 4.3 206/10a-1 core porosity-permeability plot.

Fig. 4.4 Freya Probablistic Volumes


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4.2 Fulla Discovery (206/5a-3)

Drilling Well 205/5a-3 was spudded (see Fig. 1.1) on 7th July, 2012 and on the 14th August the top Cretaceous sand and top Clair Reservoirs were encountered within 10ft of their prognosed depths . A gross hydrocarbon bearing interval of 132ft were penetrated in the Cretaceous with a further 1,284ft of gross Clair Group sandstones beneath. The Clair Group, with the exception of the upper 50-100ft appeared to be water wet, but with a high residual oil saturation, occasional oil shows, and a high background gas readings. An initial logging run was performed (Platform Express) and the subsequent petrophysical analysis indicated 25ft of Pay in the Cretaceous with an additional 8ft in the Clair. On the strength of this result the full success case logging programme was initiated which included sonic and image logs, MDT fluid sampling, a VSP and side-wall coring. The wireline operations successfully concluded on Sat 20th August and the well was finally abandoned on 1st September 2013

Petrophysics A final petrophysical analysis was made using all available logs and the CPI and pay statistics are shown in Fig. 4.5 and Fig. 4.6 respectively. The main petrophysical conclusions can be summarised as;

Cretaceous sands have a live oil column, albeit with high water saturations (Average 73%). Using 60% Sw cut off gives 25.5ft of Pay (17ft in the Cretaceous Upper and 8ft in the Cretaceous Lower sand) The Cretaceous sands have an average porosity of around 22-23%. The upper sand has a NtG of 98% whilst the lower sand has a NtG of 70%. Neither sand is a blocky high perm (GR, den/neut, NMR, MDT mobilities all indicate this). Clair Group has a residual oil column. The Cretaceous upper and lower sands are clearly different from each other, as seen from biostratigraphy, core descriptions, ADT log, PEX data and Vp vs Rho cross plots (to be discussed later), plus wetability may be also be different (oil stained cores in Lower but not upper sand).

Oil Quality Two single phase oil samples were acquired from the Cretaceous (Lower sand) from a depth of 6,357ft MD (2,823psi and 70deg C). Both samples were contaminated by water, attributed to the high conate water saturation of the rock. Oil quality was measured at 19o API (density of 0.847 g.cc) with a viscosity of 5.72cP-broadly comparable to the Clair Field, whilst the oil was under-saturated (some 709psi above the bubble point). This appeared to be only slightly biodegraded with comparison to other North Sea heavy oils based on chromatogram analysis.

In combination with the apparent good reservoir quality, these oils were deemed be producible via normal techniques, however specific challenges such as emulsion would need to be examined. Itr was therefore concluded that oil quality would not appear to be the limiting factor on the development of Fulla

No oil sample was recovered form the Clair Group, however two multiphase samples were acquired in the water leg at 6,507ft MD.


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Fig. 4.5 206/5a-1 CPI

Fig. 4.6 206/5a-1 CPI Pay Statistics


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MDT Pressures There was a high degree of scatter on the MDT pressure measurements taken most likely due to a combination of poor reservoir quality/thin beds (laminations) and likely poor vertical communication. MDT pre-test derived fluid mobility's supported the PVT and MRX results (5-6 cP). Excess pressure technique indicated possible gravity segregation (increasing fluid density with depth) within the Cretaceous sands which were likely to not be in direct pressure communication with each other. Whilst not definitive, it was the most likely scenario that the Cretaceous sand and Clair Group were NOT in pressure communication although it is extremely difficult to propose a geological model to support this result. Making this assumption, it was concluded that either that the aquifer was over pressured relative to the Oilifer or else major salinity changes were occurring thereby making the aquifer gradient non-linear in nature. Establishing a precise water gradient was very difficult, and that the measured Rw and implied water gradient was a poor statistical fit, although the implied salinity was comparable to the Clair Field (25,000ppm NaCl). The most robust water gradient interpretation put the salinity to be around 60,000ppm NaCl.

Biostratigraphy & Regional Correlation The Cretaceous sands observed in 206/10a-1 (Freya) were labelled as "Whiting Sands" which were attributable to Coniacian of the Upper Cretaceous. The sands encountered at Fulla were initially assumed to be of similar age, however subsequent biostratigraphic analysis confirmed that the Upper Sand was actually Cenomanian in age (Haddock Sandstone equivalent) whilst the Lower sand was of Albian age (Victory formation equivalent). Depositionally, the Victory sands represented transgressive shoreface deposits whereas the Haddock Sands represented the chalk equivalent unit of the Faroe Shetland Basin, typically characterised by inter-beds of limestones & sandstone.

Volumes Based on the well result, a detailed re-mapping exercise was carried out to fully understand the volumetric implications (Fig. 4.7). Given that there was still an uncertainty over the issue of pressure communication between the Cretaceous and Devonian/Carboniferous (Clair Group) reservoirs, two scenarios was assumed as depicted and summarised in Fig. 4.8. The resulting volumes indicated a mean STOIIP volume of between 15mmboe and 24mmboe at Fulla.

Implications to the Freya Discovery This result meant that there is still a significant uncertainty with regards to the oil quality at Freya. Comparative petrophysics indicated that Freya still had a full live oil column (not breached) and was therefore different to Fulla, however given what was now known about the high water saturations it was likely that Freya would now have more uncertainty. i.e. the Fulla volume could only get worse rather than improve (water saturations likely to be high like Fulla). Volumetric uncertainty would need to be taken into consideration with the economic and/or commercial assessment as Freya now had far less margin of error. Freya development scoping would have to assume high water handling capacity etc.

Final Conclusion Fulla has a combined range of 12-40MMboe of STOIIP with a mean of around 25MMboe. It exhibits a breached, residual oil column in the Clair Group whose palaeo-contact approximates to the structural spill indicating that the trap was once full of oil. Looking at the Fulla STOIIP is would be fair to say that it would


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Fig. 4.7 BCU Regional Depth Structure map

Fig. 4.8 Fulla Volume Summary


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be uneconomic as a stand alone discovery, and at best a 1 or 2 well tie back to a potential Freya development.


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5 Conclusions

Freya has a mean STOIIP of 141mmbls with an associated recoverable reserve of 35mmbls however still carries a degree of risk with regards oil quality of the Clair Fm. Fulla has a combined STOIIP range of 12-40MMboe with a mean of 25MMboe, however it has a confirmed PVT fluid properties of 19o API, and 5 cP viscosity.

The mean volumes presented for the combined Freya and Fulla discoveries were found to be too small with regards to a minimum economic threshold, and therefore a decision was made to relinquish the licence.

6 Clearance

Faroe Petroleum as operator has approved this relinquishment report for publication by the DECC.

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P1161 Relinquishment Report · An RFT oil gradient interpretation by PGL of 0.347psi/ft also...

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