Gunther Newcombe

Director, Exploration and Production

Oil and Gas Authority

Promoting the Exploration Potential of the UKCS

Exploration

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Promoting Exploration Potential of UKCS

OGUK Conference, June 2016

Gunther Newcombe (Director , Exploration & Production)

PROTECTIVE MARKING(as appropriate)Exploration Storyboard

OGA has a clear plan to promote & revitalize exploration in UKCS

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Purpose To revitalise exploration in the UKCS in order to add reserves to replace production and secure

longevity of the North Sea

Priorities• Promote exploration potential & improve technical understanding

• Optimize licensing approach to maximise frontier and mature potential

• Incentivize exploration through a combination of fiscal and non-fiscal initiatives

MembersRon Roberts (Apache) Ruud Zoon (GDF) Tom Dreyer (Statoil)

Chuck Guderjahn (BP) Roberto Cerro (ENI) Ben Hillier (Shell)

Jon Parry (DONG) Mike Tholen (OGUK)

Industry lead Phil Kirk (Chrysaor) Support lead Gunther Newcombe (OGA)

Progress update

MERUK Exploration Board

• Licensing strategy task group developed Innovate Licence Approach 1Q 2016

• Seismic Industry Group data acquisition proposal 2Q 2016

• Developing framework for 2016 UKCS geotechnical study

Tripartite approach to promoting & revitalizing exploration

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OGA Monthly Performance Pack 2015Significant additional potential in mature areas

Mature Yet-to-Findc

NNS

WOS

SNS

OGA Data Base

CNS

NNS

WOS

SNS

Number of Wells

NNS

CNS

WOS

SNS

9 bnboe

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MustardBoatswain Callater

CoronaDrumtochty

Dalziel

CorfeSeagull

Appraisal Wells

Exploration Wells

Oil Discoveries

UKCS 2015 Discoveries

2015 Technical Success Rate 60%, $6/boe finding cost with 150mmboeOGA Data Base

Gas Discoveries

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20

17

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Sillimanite

• High well cost, mis-alignment & funding

• OGA actively promoting exploration and engaging investor

community

• Well costs being worked by industry task force

• OGA working near term issues such as regional exploration focus

with operators, JV mis-alignment, farm-outs and rig market

• Industry 3D seismic group shoot proposal being worked

• Discussions ongoing with government

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OGA Competition to Define Potential

• £1m prize money shared between 2015 & 2016

New World-Class Visualization Facility

• £700,000 funding for Lyell Centre in Edinburgh

Post-Doctoral Appointments

• £750,000 for three post-doctoral appointments (Durham,

Aberdeen & Herriott Watt) in geoscience and reservoir

engineering

2015 & 2016 Seismic Acquisition Programs

• £40m UK government funding seeking to promote underexplored

areas of UKCS

The UKCS North Sea also has significant frontier potential

Frontier Exploration6

Geotechnical Studies

• Post well analysis OMF completed end 2015

• Palaeozoic study completed May 2016

• Developing West Britain & Orcadian study 2016

PROTECTIVE MARKING(as appropriate)Offshore Licensing Rounds

29th Round will focus on under-explored areas

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PROTECTIVE MARKING(as appropriate)Innovate Licence

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Developed by industry for industry

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Core 6500 km

Ext 4000 km

New Seismic

West Britain

Core 6100 km

Ext 5500 km

New Seismic

Orcadian

2016 Seismic ProgrammeReprocessing

Key Areas

40 – 70,000 kms

Geotechnical studies complement new & reprocessed seismic

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• OGA working closely with Industry & Government to

revitalize exploration

OGA Monthly Performance Pack 2015

Key Messages

The UKCS North Sea has both mature and frontier potential

• Considerable potential remains in both mature and frontier

areas of UKCS North Sea

• Government seismic programme & associated studies

aimed at unlocking frontier potential

• Challenge on industry to increase seismic coverage &

exploration drilling in UKCS

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