1 Relinquishment Report Licence P1673 (Block 44/28a) December 2015 Centrica North Sea Gas Limited Atlantic Petroleum North Sea Limited Document nr. CEU-SUB-GEN-REP-0004 Disclaimer No liability whatsoever is accepted and no representation, warranty or undertaking, express or implied, is or will be made by Centrica plc or any of Centrica plc's subsidiaries, or any of their respective agents, being their directors, officers, employees, advisers, representatives or other agents, for any information, projections or any of the opinions contained in this report or for any errors, omissions or misstatements in this report. Neither Centrica plc nor any of Centrica plc's subsidiaries, nor any of their respective agents makes or has authorized to be made any representations or warranties (express or implied) in relation to any of the matters described herein or as to the truth, accuracy or completeness of this report, or any other written or oral statement provided. This report shall not be deemed to be an offer to sell or invitation to invest in Centrica plc or any of its assets and no information set out in this report is intended to form the basis of any contract, investment decision or any decision to purchase or invest in any such assets. Neither Centrica plc nor any of Centrica plc's subsidiaries nor any of their respective agents undertakes any obligation to provide any recipient with access to any additional information or to update or correct any inaccuracies in or omissions from this report. This report should not be considered as a recommendation by Centrica plc or any of Centrica plc's subsidiaries or any of their respective agents to invest in any securities (including, without limitation, those issued by Centrica plc) or any other assets. Recipients should rely solely on their own judgment, review and analysis in evaluating the information set out herein.
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Relinquishment Report
Licence P1673 (Block 44/28a)
December 2015
Centrica North Sea Gas Limited
Atlantic Petroleum North Sea Limited
Document nr. CEU-SUB-GEN-REP-0004
Disclaimer
No liability whatsoever is accepted and no representation, warranty or undertaking, express or implied, is or will be made by Centrica
plc or any of Centrica plc's subsidiaries, or any of their respective agents, being their directors, officers, employees, advisers,
representatives or other agents, for any information, projections or any of the opinions contained in this report or for any errors,
omissions or misstatements in this report. Neither Centrica plc nor any of Centrica plc's subsidiaries, nor any of their respective agents
makes or has authorized to be made any representations or warranties (express or implied) in relation to any of the matters described
herein or as to the truth, accuracy or completeness of this report, or any other written or oral statement provided. This report shall not
be deemed to be an offer to sell or invitation to invest in Centrica plc or any of its assets and no information set out in this report is
intended to form the basis of any contract, investment decision or any decision to purchase or invest in any such assets. Neither
Centrica plc nor any of Centrica plc's subsidiaries nor any of their respective agents undertakes any obligation to provide any recipient
with access to any additional information or to update or correct any inaccuracies in or omissions from this report. This report should
not be considered as a recommendation by Centrica plc or any of Centrica plc's subsidiaries or any of their respective agents to invest in
any securities (including, without limitation, those issued by Centrica plc) or any other assets. Recipients should rely solely on their own
judgment, review and analysis in evaluating the information set out herein.
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Contents
1. Licence Information .................................................................................................................... 3
A single block Traditional Licence (P1673) was awarded as a result of a 25th Licence Round
application and is currently held by Centrica North Sea Gas Limited (Operator, 95%) and partner
Atlantic Petroleum North Sea Limited (previously Volantis Exploration) (5%). Hereinafter referred to
as the “Group”.
Licence Number P1673
Licence Round 25th Seaward Licence Round Licence Type Traditional Block Number 44/28a Licence Start Date 12th February 2009 Licence End Date (Initial) 11th February 2013 Licence End Date (2nd Term) 11th February 2017 Table 1. Licence details
2. Licence Synopsis Based on a comprehensive evaluation of the subsurface prospectivity in the area, the Group decided
to drill the Fulham exploration well; 44/28-06 in 2010 to fulfil the ‘drill or drop commitment’ of the
licence. The partners surrendered part of the licence, and the initial term was extended from 11th
February 2013 to 11th February 2017 for the remaining block. Licence P1673 comes to the end of the
second term of the Traditional Licence on 12th February 2017 and after fulfilment of the work
programme and careful consideration the Group has decided to relinquish Licence P1673.
The current licence holders of P1673 (44/28a) are as follows; Centrica North Sea Gas Limited
(Operator, 95%) and Atlantic Petroleum North Sea Limited (5%).
3. Work Programme Summary
3.1. Drill-or-drop Commitment (1st Term)
Drill one well to 4000m or to the Westphalian B Horizon, whichever is the shallower or elect
to allow the licence to automatically cease.
3.2. Firm Commitments (2nd Term)
None
3.3. Work Undertaken
The Fulham well 44/28a-6 was drilled by Centrica Energy in July 2010. The well, located north of
Chiswick and east of Ketch (Figure 1) encountered gas in basal Westphalian B sands with a clear gas
water contact at 3664 m TVDSS. This contact coincides with the contact observed in the Arrol well;
44/28-3, however, the well test shows that there are barriers to flow within 250m of the wellbore.
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Prior to the drilling of 44/28a-6 the following work programme was completed to fully evaluate the
subsurface opportunities within the licence:
Data clean up and acquisition of relevant well data
Regional well top correlation
Petrophysical analysis of Fulham area (FWL’s, Sw, Phi, fluid gradients)
Regional surface mapping TWT (PGS mega survey and Conoco 3D)
Finalization of regional seismic interpretations of faults and key surfaces (over-burden &
intra-Carboniferous)
Attribute analysis (RMS Amp with A/B, Sweetness, Variance, CosPhase, Ant Track, Chaos)
Velocity modelling and depth conversion
Static modelling (structure, properties)
Volumetrics
Prospect/appraisal target generation and risking
4. Database Seismic reflectivity data coverage is good over the area of interest with the PGS Megamerge survey
covering from far south of Markham all the way North to the Arrol discovery (Figure 2 Blue lines).
Data quality is good above the Zechstein but below this it becomes very poor making horizon and
fault interpretation very difficult. To the North of Arrol, and with a significant overlap to the South is
the Conoco Phillips 3D dataset (Figure 2 Green lines). This is of much better quality in the
Carboniferous than the PGS Megamerge survey; however interpretation is still very difficult. Near
and Far offset volumes were not available.
All wells in the area are available but checkshots, logs and deviation surveys are often missing. There
is a reasonable amount of core data available especially from the producing fields and older wells
and these were used by SGS Horizon in the petrophysical evaluation of a number of wells. Key wells
for modelling include 44/28-3 (Arrol), 44/28a-6 (Fulham), 44/29-3 (Ealing) and 44/28-2 (Ketch).
Many other wells were included for the regional mapping work.
5. Prospectivity Update The Fulham Prospect is located in the Southern North Sea in the UK Sector in license 44/28a. A well
was drilled in 2010 (44/28a-6) targeting a four way dip closure at the base Permian unconformity
between the Ketch and Murdoch Caister fields. Reservoir is the Murdoch sands of the basal
Westphalian B, sealed by the Silverpit Formation. The hydrocarbons are sourced from the
Carboniferous coal measures.
5.1. Regional Mapping
There is no PSDM seismic over the Fulham structure, therefore interpretation was carried out on
TWT reflectivity data using both the PGS Megamerge and Conoco 3D surveys. Preference was given
to the Conoco 3D as the data quality is better than that of the PGS Megamerge volume, however
this does not cover the structure to the south of the Area of Interest (AOI). Regional surfaces were
interpreted as input for the velocity model. Surfaces interpreted include:
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Sea floor
Top Chalk
Top Triassic
Top Zechstein
Top Rotliegendes
Near Top Murdoch (Figure 3)
Near Top E2
Pre-halite horizons were relatively straightforward to interpret however the Carboniferous events
carry a large uncertainty. The more reliable horizon in the Carboniferous is the Near Top E2 pick as it
is less affected by erosion at the top of the structure. The amplitudes of these events are highly
variable, and in some cases; phase was a more reliable attribute to map. The Near Top Murdoch
event is eroded at the crest of the structure and therefore unreliable when close to the erosion
surface. In the model the lower Near Top E2 horizon was used up to and including the Top Murdoch
so that the horizon could be properly truncated by the Base Rotliegendes.
Faults were interpreted both regionally and locally and were used to constrain horizon maps and as
inputs tor the static model.
5.2. Depth Conversion
Mapping was carried out in TWT, therefore a number of depth conversion velocity models were
created and compared. Regional surfaces were mapped based on changes in interval velocity and
V0K used to create the velocity model in Petrel (Table 2).
The basic models created include:
V0K functions derived from time depth data using Excel
V0K functions from Velocity Manager
V0K functions from the TNO VELMOD and EBN regional database (TNO Built Environment
and Geosciences, 2006)
These models were fine-tuned testing iterations such as using a constant velocity for the Zechstein
versus a V0K function and the residuals compared. It was found that the TNO / EBN derived model
produced the smallest residuals (derived from the untied entire model) and this was chosen as the
base case velocity model. The models were built in Petrel using the velocity modelling functionality.
From To V0 K
V=V0=VInt MSL Sea Floor 1500
V=V0+K*Z Sea Floor Base Tertiary 1650 -0.541
V=V0+K*Z Base Tertiary Base Chalk 2058 -1.194
V=V0+K*Z Base Chalk Top Zechstein 2701 -0.501
V=V0+K*Z Top Zechstein Top Rotliegendes 4327 -0.058
V=V0+K*Z Top Rotliegendes Top Carboniferous 1145 -0.94
V=V0+K*Z Top Carboniferous Base Model 3533 -0.217
Table 2. Base Case V0K Functions
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Whist horizons such the Top Rotliegendes are easily mapped and the residuals therefore real,
horizons such as the Top Carboniferous (ghosted from base Zechstein) and the two intra-
Carboniferous events are not attributable to any specific lithology or seismic event. This means that
there is great uncertainty in the pick itself and what it actually represents and therefore residuals at
these levels are quite meaningless. The intention here was more to achieve a similar residual in
every well rather than a number approaching zero. The Zechstein halite diapirs and carbonate
floaters have the most significant impact on depth conversion however, and the residuals at this
level were minimal using the base case velocity mode (Table 3).
Well Top Rotliegendes Top Carboniferous
44/28-3 8.1m 13.7m
44/28a-6 1.1m 8.8m
44/29-3 9.5m 3.1m
44/28-2 66.3m 57.3m
Table 3. Base Case Velocity Model Residuals (Shallower horizons untied)
The Petrel model originally was a NW trending rectangle but this only provided well control across
the crest of the structure. For some flank control the model was extended to the SW to include the
vertical Ketch well 44/28-2. (Figure 2). Deviation data was not available for this well but drift data
from the completion report showed a maximum drift of around 3 degrees at the bottom of the well
which would mean the well was a maximum of 12 metres too deep. With the Carboniferous pick
uncertainty this potential error is acceptable.
6. Further technical work undertaken
6.1. Development Opportunities
The group has carried out an extensive static/dynamic and economic study to verify the potential of
the joint development of the Arrol and Fulham discoveries. Economic evaluation shows that the
development of the Fulham/Arrol fields via the Chiswick platform would likely be a marginal project
mainly due to the requirement of a lengthy pipeline.
7. Resource and Risk Summary The well was a technical success the post drill volumetric calculations indicate a P50 GIIP of 27 Bcf.
(Table 4). The higher pre-drill volumes seem to be largely due to the shallow P90 GWC being the
post-drill reality. An effort was made to tie in the results with the existing Arrol discovery in order to
ascertain if there is any potential for a joint development, and if any of the other prospects on the
structure should be matured further.
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GIIP (Bcf)
Prospect / Lead Mean P90 P50 P10 Petrel Exp
Fulham 36 9 27 75 36
Arrol 56 16 43 111 43
Fulham / Arrol 81 24 69 150 79
Table 4. Volumetrics
8. Conclusions Fulham in itself, is not economical, however, the partnership has investigated a joint Arrol/Fulham
development. The joint development presumes two drainage points – one for each field - at
reservoir level. This is due to dynamic separation from Arrol according to the 44/28-3 well test.
Furthermore, reactivated ‘De Keyser’ faults through the centre and to the south of 44/28a-6 could
also adversely affect connectivity.
The development scenario evaluated consists of 2 wells drilled from the same subsea manifold.
Evacuation could be either through Centrica owned Chiswick platform (~25 km) or through Murdoch
platform (~15 km). A probabilistic/deterministic combination was used to determine the range of
gas production for the joint development of the Fulham and Arrol fields. The overall probability
distribution function of the gas production was generated by running Monte Carlo simulation.
The following cases were found: P90 – 16.6 Bcf, P50 – 42.4 Bcf and P10 – 62.9 Bcf. Production
profiles in time were extracted and passed on to economic evaluation. The screening level economic
valuation shows that the development of the Fulham/Arrol fields via the Chiswick platform would be
a marginal project and only considered attractive in an optimistic scenario which combines low
CAPEX, high case reserves and a high gas price.
Based on the above, the Group has elected to relinquish the licence.
9. Clearance The Partner (Atlantic Petroleum North Sea Limited) has reviewed this document and Centrica North
Sea Gas Limited confirms that the Oil and Gas Authority is free to publish this report and all 3rd party
ownership rights (on any contained data and/or interpretations) have been considered and properly
checked for publication purposes.
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10. Figures
Figure 1. Licence location (Initial term = red outline, 2nd
Term = Dashed outline)
2nd Term P1673 Initial Term
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Figure 2. Dataset. Blue lines = PGS Megamerge survey. Green lines = Conoco Phillips 3D dataset
