Document last updated 11-05-2012 11:10 BST

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1 License P1604 Relinquishment Report

Table 1.1: Licence details:

Licence Number: P1604

Licence Round: 25

Licence Type: Traditional

Block(s): 219/20 & 220/16

Table 1.2: Consortium details:

Companies Equities

GDF SUEZ E&P UK Ltd (Operator) 100%

Fig. 1.1

Fig. 1.1 License P1604 Location Map

GDF SUEZ E&P UK Ltd confirm that DECC is free to publish information documented in this report

and that all 3rd party ownership rights have been considered and cleared for publication

purposes.

GDF SUEZ E&P UK - License P1604 2012

License P1604 Relinquishment Report

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Synopsis Licence P1604 is a Traditional Licence awarded in the 25th Licensing Round. At the time of the application,

the main target was a 4-way closure, mapped at the Top Balder Tuff horizon with Lower Palaeocene deep

water turbidite fan sandstone objective (Fig. 1.2). The Cnut structure extended into Norway blocks 6200/6

and 6201/4, with the structural culmination in Norway block 6200/6.

Top Balder Depth Map (m, tvdss)

Fig. 1.2 Cnut Structure and Surrounding Prospectivity

The recognition of an extra seismic package within the Palaeocene sequence offset to the northwest of the

219/20-1 dry hole was the main driver for the evaluation of the hydrocarbon prospectivity at Palaeocene

level in the area. The keys to enhancing the hydrocarbon prospectivity of the Cnut Prospect were: (1)

identifying if the seismic package extended northeastwards into the main closure; (2) determining if the

package could contain porous sandstones of Palaeocene age; and (3) being able to predict the depth of the

Upper Jurassic Kimmeridge Clay source rocks in the area and hence their maturity and hydrocarbon

migration history.

Following the results of a set of studies discussed in the following sections, the Licence was firstly partially

relinquished in February 2011 and finally, fully relinquished on 12th February 2012.

Exploration Activities

The following activities have been undertaken on the License:

Purchase and reprocessing of a total of 1650km 2D seismic (NSR survey), of which 69km lies on

Blocks 219/10, 219/15, 219/20 and 220/16. To determine if: (a) the Palaeocene seismic package

extends across the Cnut structure from block 219/20, (b) if there is any petro-acoustic and AVO

response from the Palaeocene of well 6302/6-1 and the seismic package to suggest sand presence;

(c) to improve the quality of the deeper seismic data so that the Base Cretaceous and or Jurassic can

be mapped and the depth estimated for hydrocarbon maturation and generation modelling for the

Kimmeridge Clay formation. Available lines of the Corona Ridge Regional Geostreamer 2D survey

intersecting the blocks of interest have also recently been purchased.

Chemostratigraphy and heavy mineral analyses of the Palaeocene sections of wells 219/20-1 and

Norway 6302/6-1; to determine if the sandstones were derived from East Greenland.

Advanced modelling and processing of marine controlled source electromagnetic (CSEM) sounding

data collected on Norway Block 6201/4 in September 2006; to analyse whether the survey data has

sensitivity to the region of interest identified and potentially determine hydrocarbon presence.

GDF SUEZ E&P UK - License P1604 2012

License P1604 Relinquishment Report

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2 Prospectivity Analysis

Summary of Studies

Reservoir

The Early Palaeocene Sullom sandstone was the primary reservoir target for the Cnut structure and the

nearby leads. The only well with evidence of Palaeocene sandstones in this part of the Møre Basin was

thought to be the Tulipan discovery well 6302/6-1 located 100km to the northeast in the Norwegian

sector. This well penetrated a 180m gross sequence of Palaeocene, containing 98m of sandstones overlying

Cretaceous mudstones and limestones. Three cores were taken in the Palaeocene section of 6302/6-1

indicating porosities of 14 to 29%, with an average of 18%; permeabilities ranged up to 350md. Wireline

logs indicate that the 98m gross section contains 40m of net porous sandstone. Given that there was no

evidence of sand sourced from the South or East, consideration had been given to the hypothesis that

these sands may have been sourced from East Greenland and could reach the Cnut prospect.

The License evaluation has however challenged this hypothesis:

A proprietary heavy mineral analysis and provenance study was conducted by HM Research

Associates. It indicates that the Tulipan sandstone was sourced from Western Norway

(Grenvillian/Sveconorwegian). This appears consistent with the source of the Ormen Lange sands

(Fonneland et al., 2004), due to the Grenvillian/Sveconorwegian peak.

A detailed review of the well 219/20-1 has indicated that Sullom sands were present in this well albeit

only 3m thick. The heavy mineral analysis and provenance study was also carried out for this well. The

zircon age spectrum of 219/20-1 presents the same Grenvillian/Sveconorwegian mineral peaks as

seen in 6302/6-1 but additional peaks that do not match those seen in any sandstone with MN3

mineralogy are also observed. This may suggest a multiple provenance, with a mineralogy reflecting

intra-basinal mixing from a combination of local Shetland Platform supply and Western Norway

supply, with minor inputs from East Greenland.

These results together with the new seismic data have an negative impact on the Cnut prospect:

The Tulipan sands are clearly seen pinching out before reaching the 4-way closure (Fig. 2.1).

A detailed interpretation of the Palaeocene interval on the new 2D lines show that within the Cnut

structure itself the reflectors are sub-parallel. The isopach maps are relatively uniform and does not

support sand presence. This strongly contrasts with the packages observed to the northwest of the

219/20-1 dry hole clearly imaged on the geostreamer data (Fig. 2.2).

Chance on the presence of an Effective Reservoir for the Cnut Prospect has been reduced from 50 to less

than 30%. It is considered to be a prospect killing factor and is the key driver for the relinquishment of

License P1604. Although Lead B (Fig. 1.2) would have a higher chance of success, it is sub-economic

(120bcf in place in a P50 gas case or 50mmboe in an oil case) and cannot justify drilling activity in the area.

Closure

The Cnut Prospect was defined as a 4-way closure. Further work on the interpretation and depth

conversion has confirmed the trap definition. Although the seismic coverage has improved since 2008, the

prospectivity is still mapped on a sparse 2D line grid.

Chance on the Closure remains 80%.

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Prospectivity Analysis

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Sea Bed

Fig. 2.1 Tulipan Sandstone Pinch-Out. Seismic interpretation and tie to the 6302/6-1 well indicate that the lower Palaeocene sandstone sequence at 6302/6-1 onlaps and pinches out to the NE of the Cnut closure

NW SE

NW

SESyn-Inversion structure with possible turbidite pond.

Sea bed

MC2D_CRRG09_110 2D Line*

* Corona Ridge 2009-2011 Geostreamer Survey. Courtesy of PGS

Fig. 2.2 Seismic Line Through Lead B. Extra seismic package within the Palaeocene sequence offset to the northwest of the 219/20-1 dry hole.

Seal and Retention

The thick overlying Palaeocene mudstone is expected to be a reliable top seal. At the time of the

application, normally pressured reservoirs were expected within the Palaeocene, but evidences from the

well 219/28-2 and 219/28-2Z today support overpressure up to 730 PSI below the Balder in the target area.

Retention was not and is still not seen as a critical issue. Chance on Seal and Retention remains 80%.

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Prospectivity Analysis

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Source, Timing and Charge

The primary source rocks for the East Shetland Basin and Tampen Spur are the shales of the Upper Jurassic,

Kimmeridge Clay formation. The 6201/11-2 well on the southern flank of the Møre Basin, some 60km

south of the Cnut prospect, is the closest well to have penetrated Kimmeridge Clay. The Upper Jurassic in

this well comprises over 400m, with 200m of radioactive Kimmeridge Clay formation, 120m of Heather

formation and 80m of Dunlin formation to TD. The TOC values of the Kimmeridge Clay range from 2.5%

to 8.9%, while those of the Heather Shales range from 2.5% to 7.75%. Hydrogen indices (HI) for the

Kimmeridge Clay range from 192 to 307, with most being around 300. For the Heather Shales the HI range

from 82 to 225. The Kimmeridge Clay vitrinite reflectance values are all around 0.57 (early-mid oil

window), while the SCI values are between 5.0 and 6.0. Clearly, this is an oil prone source rock similar to

that of the East Shetland Basin. The 6201/11-2 well, being at the margin of the Møre Basin, is no guide to

the maturity beneath the Cnut prospect and current seismic data between the two remains of too poor

quality to map the Base Cretaceous between them. The prediction of the maturation history and

hydrocarbon generation and migration in the Cnut area is still not possible with the current seismic data

set. There is also the possibility that the Kimmeridge Clay could have passed through the hydrocarbon

generation phase prior to trap formation in the early Eocene. There is good evidence for faulting within the

Cretaceous to allow any hydrocarbons to migrate vertically from the Jurassic into the Palaeocene.

Chance on Source, Timing and Charge remains 50%.

Chance of Success

The geological POS for the Cnut Prospect has been reduced from 18 to 9.6%.

No risk modifier was applied:

No AVO effect has been observed on the Cnut structure.

The CSEM survey line (MS06_01) was designed to detect a prospect with smaller lateral extent than

Cnut. Whilst other survey parameters are suitable, the survey line does not extend far enough to

provide sufficient off-target data. All but one receiver are situated on-target, which means that the

survey data lacks off-target constraints. The complexity of the background resistivity structure in this

region, and in particular the increase in resistivity beneath the prospect depth, makes it difficult to

provide clear, unambiguous evidence for either presence or absence of the target with this dataset.

Remaining Prospectivity

The combined results of the heavy mineral analysis and the structural reconstruction of the area, indicate

that during the Palaeocene, there was less fault activity regionally and continued inversion of the Ben Nevis

structure (Brendan Dome) which remobilized already deposited sediments in this area (Egbeni et al., 2011).

This switched the depositional direction from the NW direction to the N-NE direction (Norway) creating a

major depositional basin to the North-East, away from 219/20-1. Regional 2D seismic lines across this area

support this hypothesis and show strong structural control on deposition. This observation gives us

confidence that an Early Palaeocene Sullom Play exists away from the license area, mostly in the Norwegian

sector. The Sullom T10 Play may therefore be further explored in the future.

GDF SUEZ E&P UK - License P1604 2012

Prospectivity Analysis

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