Licence P1885

Blocks: 125/18, 125/19, 125/23, 125/24,

125/25

Rathlin Basin, Offshore Northern Ireland

Relinquishment Report

April 2016

Contents

1. Licence Information ........................................................................................................................ 3

2. Licence Synopsis .............................................................................................................................. 3

3. Work Programme Summary ........................................................................................................... 4

4. Database ......................................................................................................................................... 5

4.1 Seismic and Interpretation...................................................................................................... 5

4.3 Wells ........................................................................................................................................ 9

4.4 Seeps ..................................................................................................................................... 10

5. Petrophysics .................................................................................................................................. 11

6. FTG ................................................................................................................................................ 14

7. Magnetotelluric Survey ..................................................................................................................... 15

8. Play System ................................................................................................................................... 16

8.1 Reservoir - Carboniferous: .................................................................................................. 17

8.2 Reservoir Triassic .............................................................................................................. 17

8.3 Source ................................................................................................................................ 17

8.4 Seal .................................................................................................................................... 18

9. Polaris Lead ................................................................................................................................... 18

10. Volumetrics ............................................................................................................................... 19

10. Rathlin Basin – Challenges ......................................................................................................... 21

1. Licence Information

Licence Number :P1885

Licence Round : 26th Round

Licence Type : Frontier Production Licence

Block Number : Blocks: 125/18, 125/19, 125/23, 125/24, 125/25 All permissions have been sought to publish

2. Licence Synopsis

License P1885 (Rathlin Offshore), shown Figure 1 was awarded 1st of February 2012 for an initial 6

year period for Term 1 which forms the assessment and desk study phase of the licence (February 1st

2012 to January 31st 2018). Term two covers the drilling phase. The licence was awarded 100% to PR.

SINGLETON LIMITED (“Providence”) who operate the licence.

Figure 1 - Location map of P1885 on Terrain Corrected FTG data (data in the Rathlin Sound has been blanked as it is Rathlin Energy propriety data)

Although a well commitment is not required until 2018, as of April 2016 the company has decided

not to progress with this licence, and will relinquish the acreage held under Licence P1885. This

decision to relinquish the area is based on the lack of material prospectivity identified in the licence

area, as well as operational issues specific to the area. These are outlined in the following report.

3. Work Programme Summary

The following listing details the work programme commitment associated with P1885.

Since award of P1885 on July 2nd 2012 and up to April 2016, Providence has successfully completed

the following agree minimum work programme items, as well as additional technical studies carried

out as part of Providence’ evaluation of the licence.

P1885 Agreed Work Programme:

Part I

i) obtain 750km of 2D seismic data

ii) reprocess 250km of 2D seismic data

Part II

i) Drill or drop commitment

Additional Completed Work Items:

In addition to the agreed work programme (stated above), providence undertook the following

items of work in the course of its technical evaluation of licence P1885:

Regional well interpretation and correlation

Obtain existing gravity and magnetic data to assist with 2.5D modelling

Purchase of 2754km2 of Bell Geospace airborne Full Tensor Gradiometry (FTG) dataset, and

integration with seismic and well data

Purchase and review satellite seep data from offshore Rathlin Basin

Review of basin petroleum system

Acquisition of magnetotelluric (MT) survey to image sub basalt structures in data gap in the

area of the Rathlin Basin

Mapping and evaluation of leads, including risk assessment

The following provides a technical review of the licence area, and integrates the outcomes of the

above work programme.

4. Database

4.1 Seismic and Interpretation

The seismic database in the Rathlin Basin is comprised of a number of vintage datasets dating from

the 1970s through to 1995. Providence purchased all of the released seismic data available, totalling

over 1500 line km (which includes onshore Antrim data). Figure 2 shows the offshore dataset used in

this report. The majority of the available offshore seismic data in the area is of very poor quality,

being blighted by a very strong seabed multiple and subsequent multiple train. This is because of

very hard baked chalk and basalt flows at the seabed together with various Cenozoic-aged sills and

dykes. The onshore North County Antrim seismic data has very little acoustic penetration through

the thick basalt cover.

Figure 2 – Location map showing Bathymetry, Wells and Seismic Surveys

The most extensive offshore survey was the ESI81 dataset, totalling 467 line km shot in a grid

orientation. Only sepia copies were available and the search for the original field tapes proved

fruitless. This dataset was scanned and vectorised by Lynx Information Systems of London in 2011. A

further 315 line km of vintage offshore 2D reflection data was reprocessed by CGG in 2012 with very

encouraging results (Figure 3 & Figure 4). There has been no seismic data acquired on Rathlin Island

itself which has left a considerable data gap. An attempt has been made to address this with the

acquisition of MT data in 2013.

Figure 3 - Vintage v 2012 reprocessing, data courtesy WesternGeco

Figure 4 - Vintage v 2012 Reprocessing, data courtesy WesternGeco

Data courtesy WesternGeco

Data courtesy WesternGeco

There is no direct seismic to well tie, with the onshore Portmore well, being the best correlation

between the seismic data and known horizon depths. This well is approximately 3 km from the

nearest offshore seismic line. Two events have been interpreted regionally on the seismic database,

tentatively at near Top Sherwood Sandstone and near Top Carboniferous levels. Providence has

based these horizon picks on the Portmore well, the known geology of the area and on experience

from other basins in the Irish Sea area such as the Larne and Kish Basins where there is good well to

seismic control. Figure 5 is an interpreted seismic line from north of the island showing many

features of the basin; the thicker Permo-Trias and Lower Jurassic section in the hanging-wall of the

Tow Valley Fault in the south-east and the subcropping of the older stratigraphy to the north west as

the basin shallows. Many of the smaller faults shown appear to be very late with little or no growth

across them. Some of the faults also appear to have a seabed expression.

Figure 5 - Interpreted Seismic Line, data courtesy WesternGeco

The Top Sherwood Sandstone depth structure map is shown in Figure 6. Depth is in metres.

Data courtesy WesternGeco

Figure 6 - Top Sherwood Sandstone Structure, with grid of 2D seismic used in interpretation.

4.3 Wells

Providence purchased the following wells in the basinal area - Portmore and Magilligan (which is

actually in the separate nearby Foyle Basin but which is interpreted to have a similar stratigraphy to

that of the Rathlin Basin), as well as some additional wells in the nearby Lough Larne-Lough Neagh

basin which provide a more regional content for the basinal geology of the area.

The company also purchased wells on the basin shoulder which were drilled on the Ballycastle Coal

Field. These wells, which intersected the Lower Carboniferous provide important information on the

oil and gas source potential of the area, as well as the Carboniferous reservoir potential which is

interpreted to exist in the basin proper.

In addition, a recent (2008) well, the Ballinlea-1 well was drilled in the onshore part of the Rathlin

Basin, however this was not available to Providence as it remains “tighthole” status and as such has

not yet been publically released. We do know however, from information on the Rathlin Energy (the

current operator and participant in the drilling of Ballinlea-1) website that this well was oil-bearing in

Lower Carboniferous sandstones, Figure 7. Rathlin Energy had planned to appraise the Ballinlea

structure in Q1 2015, and planning for this was submitted in June 2013, however as of October 2015

they have since relinquished the acreage. The Ballinlea-2 well was to be drilled up-dip from the

existing discovery well (based on FTG data) where the hydrocarbon column is interpreted to be

thicker. It is thought that the Ballinlea-1 well was drilled close to the OWC.

Figure 7 - Ballinlea-1 well and proposed Ballinlea-2 well (Rathlin Energy website)

The Portmore and Magilligan are vintage wells, both of which were drilled in the 1960’s, and as a

result only a limited amount of data is available for these wells.

4.4 Seeps

Satellite seep data was purchased from InfoTerra, Figure 8 below shows the available coverage of

this dataset.

Figure 8 - Map showing availability of Seep data

Seep data identified along an interpreted fault zone in the west of the basin, where the Triassic and

Carboniferous shallows towards the seabed. The presence of the seeps, along with the oil found in

the Ballinlea well suggest oil has been generated and is moving in the basin.

The precise location of seeps cannot be displayed in this report due to third party ownership rights

issues.

5. Petrophysics

PortMore

Figure 9 - Petrophysical CPI showing Sherwood Sandstone Fm in the Portmore well

Figure 10 - Petrophysical CPI on PortMore well, and results

Hard copy log data was provided to Providence by the DETINI whereby it was digitised and supplied

back to the DETINI in LAS format. Petrophysics were run on the digitised dataset (Figure 9, Figure

10), however the data is limited with old style neutron tool which was recorded through casing,

therefore porosity is qualitative rather than quantitative and not very reliable. In fact the porosity

from the log data reads far lower than porosity from core readings which were supplied in reports

from DETINI, Figure 11. Average porosity from the log data was 8-9% in the Sherwood Sandstone,

while the range of porosity in the core data is 7-24% with an average of 17%.

No net pay was recorded in this petrophysical analysis.

Figure 11 - Porosity from DETINI reports

6. FTG

An FTG dataset was acquired by Bell GeoSpace in March 2012, and subsequently purchased as a

propriety dataset by Providence.

The technique is an excellent way of screening large areas in frontier basins containing little to no

subsurface data control, in a cost efficient, envoirnmentally sensitive and timely manner. The survey

at Rathlin was acquired over the 6 offshore blocks (P 1885) as well as over Rathlin Island itself (PL

5/10), with a strip between Rathlin Island and the NI mainland kindly given to Providence as courtesy

data by Rathlin Energy Ltd (Figure 12) which cannot be included in this report as it is non-proprietary

to Providence.

Figure 12 - Rathlin Island FTG Acquisition (green is Providence propriety data, blue is Rathlin Energy data)

The survey was shot in an E-W 500m line spacing with a 5000m N-S tie line spacing.

A large structure located in the Rathlin Sound, and subsequently titled “Polaris” has been high-

graded based on FTG data and the M91 2D seismic line. The FTG dataset fits, in terms of size,

faulting and morphology with the one good quality seismic line (M91-NC-12) which traverses the

structure. In addition to this, the overall Polaris anticlinal shape, with opposing dips can be observed

on the poorer quality ESI81 dataset. It is reassuring that this lead was identified in a broad sense on

the original 2D dataset (pre-2013 reprocessing), which was mapped prior to acquisition of the FTG

dataset.

A potential northerly extension of the Polaris lead can be mapped on the FTG data underlying

Rathlin Island Figure 13. In the absence of seismic data over the island to confirm the presence of

such a structure it is unknown whether this anomaly is due to surface topography and/or incorrect

filtering of the basalt surface geology of the island.

Figure 13 - FTG dataset (Unfortunately the Polaris Lead was identified on the Rathlin Energy FTG dataset and so cannot be shown in this report).

7. Magnetotelluric Survey

A magneto-telluric (MT) survey was acquired over Rathlin Island in April 2013, in conjunction with

IRETHERM. Two personnel from Providence joined two personnel from IRETHERM to acquire data at

12 MT stations on the Island over an E-W and N-S trajectory, Figure 14.

Figure 14 – MT Acquisition Programme. Note that sites denoted “RIE00_” were used to create an E-W 2D data profile, while sites denoted “RIN00_” were used to create a N-S 2D data profile

The objective of the study was to image predicted porous sediments which underlie the island and

determine the depth to basement, as no seismic data have ever been acquired on the island. To

date only a preliminary report has been issued by IRETHERM (Sept 2013).

One dimensional and two dimensional models were constructed. The 2D model allowed for static

shifts. A thin resistive layer which represents the basalt cover is seen.

An update set of images were presented at the IGRM 2014 in UCD, which clearly highlight the

structure of the basin. The presentation includes data from the onshore part of the basin in Antrim.

The Tow Valley fault is clearly imaged, and a large anomalous body is present in both profiles, which

is also observed on aeromagnetic data.

Unfortunately, this work remains incomplete at the time of submission of this document so no

definitive statements can be made on the subsurface structure beneath Rathlin Island. Two

preliminary resistivity profiles show a thin, highly resistive cover across much of the island. This layer

is assumed to represent Cenozoic basalt. A more conductive layer lies below this, which is

interpreted to represent water bearing sediments of Cretaceous to Triassic age. This preliminary

model suggests that the maximum likely depth of the basin is circa 2km (i.e. depth to electrical

basement).

8. Play System

8.1 Reservoir - Carboniferous:

Visean and Namurian aged fluvial / deltaic sandstones of the Ballycastle Group are the primary

reservoir target in the offshore basin. Oil was recovered from Lower Carboniferous aged sands at

Ballinlea-1 (2008). Onshore lateral continuity of Lower Carboniferous sands on the Antrim coastline

is known from outcrop and 12 onshore coal exploration boreholes around the Ballycastle coal field

located on the eastern shoulder of the Rathlin Basin.

Log sections from Cross, Magilligan and Bath Lodge-2 boreholes highlight sand bodies over 70ft

thick. 15-17% porosity (core poroperm from the Magilligan well) has been documented, although up

to 29% seen due to the significant secondary porosity that is known to occur locally. The

Carboniferous is potentially up to 1000 m thick in the offshore basin, based on interpretation of

gravity and seismic data.

Overall the Carboniferous is a fining upward sequence with marine influences increasing in

prevalence further up the sequence. Red staining has also been recorded in the majority of the logs

for the sandstone units of the Ballyvoy group. This oxidization has been attributed to meteoric fluids

filtering through the Carboniferous strata (Wang 1992).

A fluvial-dominated lower delta zone is the envisaged environment of deposition. The flood

basins/plains would have been densely vegetated, generating a large amount of plant matter on the

floor of the delta plain. Periodic inundations of both fresh and mainly marine water occurred,

leading to the thin limestone bands found throughout the section. While earlier in the Carboniferous

there is evidence of a semi-arid climate, for the majority of a section a wet-tropical and quite

possibly, a monsoonal climate is predicted (Cleal & Thomas 1994).

8.2 Reservoir Triassic

The Sherwood Sandstone Group (SSG) is the secondary reservoir target in the basin. It is known in

the Larne, Rathlin and Lough Neagh Basins, from both wells and outcrop. The SSG produces large

amounts of oil and gas in the East Irish Sea Basin (EISB), offshore Liverpool.

The alluvial/fluvio-deltaic sands average 17% porosity and permeability values between 100mD and

1D (core poroperm from Portmore well, onshore Rathlin Basin). The sands were deposited in a

similar setting to those in the EISB.

A recent K-feldspar provenance highlights a SSG sand provenance divide at the Ulster Basin with a

large linked river system draining northwards from Variscan uplands to the EISB, Wessex Basin and

the Kish Basin. Northern located basins such as Slyne, Rockall and the Faroe-Shetland Basin appear

to have been fed from the Greenland Massif to the north. (Tyrrell 2011).

8.3 Source

Carboniferous deltaic shales and coals are the primary source for both oil and gas, respectively.

Paralic coals developed in deltaic coastal environments. These types of seams tend to be thin, but

laterally continuous (thus providing a good correlative marker across wells). Coal measures appear

to occur in cycles as a result of marine conditions which switch to continental sedimentation (Wilson

and Robbie, 1966). Cycles begin with fossiliferous marine mudrock to non-marine mudrock, a

coarsening upward sequence of siltstone to sandstone follows. Seat earths or fireclays general

overlie these sandstone units before the deposition of the coal seam (Tucker, 1995).

A Geochem Labs (1982) study found the onshore Rathlin Basin coals to be “very rich” for gas as well

as liquid hydrocarbons. Also Visean age samples from the Cross borehole show potential for both oil

and gas. However, the report found that spore coloration indicated immaturity, although this

maturity is from a surface sample and so is not indicative of the deep basinal sections. We know that

the source is mature at the Ballinlea-1 well location as oil was recovered from the Carboniferous in

this well.

The Magilligan borehole generally has organic matter present as inertinitic and woody debris with

low TOC’s. However, one siltstone horizon (686ft) showed high TOC (3.51%) with dominantly algal

kerogen and was deemed “Capable of generating liquid hydrocarbons”. The North Antrim coals are

also considered very rich with a considerable amount over 40% TOC. Some samples from the

‘Ballyvoy Coals’ in the Cross borehole are recognised as oil-shales, giving very high hydrogen indices.

TOC in the Ballyvoy coal seems are: 13.5 13.7, 19.5, 12.4, 13.6%. (Parnell, 1991).

8.4 Seal

The Triassic Mercia Mudstone Group (MMG) halite is regionally recognised (EISB, Kish Basin, Larne-

Lough Neagh) as the seal for the Triassic reservoir.

However, no salt has been found in the Triassic in either the Portmore or Magilligan boreholes, or

the West of Scotland, SW Arran, BGS boreholes Malin area. Only evidence of gypsum and anhydrite

are noted. It is possible that halite is present in the deeper basinal area of the Rathlin trough, which

lies offshore under the Polaris lead, and would lie on trend with halite deposition in the Larne-Lough

Neagh Basin.

A possible waste zone has been observed in the lower MMG (based on poor log data) at Portmore

where the formation becomes increasingly silty/sandy. For these reasons there is a top-seal risk

associated with the SSG in Rathlin Basin play.

Intraformational fluvio-deltaic shales seal the Lower Carboniferous reservoirs.

9. Polaris Lead

A number of leads have been identified from the mapping, both seismic and FTG. The most

promising of these is the Polaris Lead in the Rathlin Sound, Figure 15. This structure is a rather

complicated series of tilted fault blocks at Sherwood Sandstone and Carboniferous levels. The

structure is an apparent long lived one and is set up on a major easterly dipping normal fault which

developed antithetic to the basin bounding Tow Valley Fault. It has certainly undergone some

compression in the Cenozoic and a major sill of probable Palaeocene age is offset by a late stage

fault. The structure appears to be a valid target from Triassic to Carboniferous levels. The lead

identified from the seismic mapping has been confirmed by the FTG. It is worth noting that the

Polaris Lead is structurally on trend with the Ballinlea-1 oil discovery. From the FTG data, the Polaris

Lead appears to extend beneath the island of Rathlin. This cannot be confirmed by the seismic data

due to the data gap beneath the island.

Figure 15 - Reprocessed M91-NC-12 line

10. Volumetrics

Scoping deterministic volumes were calculated for the Polaris Lead. Inputs are as follows :

Area of Polaris polygon is c. 7000 acres (28 sq km)

Based on Bell Geospace FTG data there is c. 350m (1150ft) of relief on Polaris South.

Portmore Well - Base Sherwood = 1830m, Top 1317m - 513m thick (1680ft)

Average Sherwood porosity c. 8% & N:G c. 60 % based on Portmore borehole petrophysics

(log quality questionable, when compared with poro-perm plug data which has 17% avg.

porosity )

Oil FVF assumed 1.2

Conservative average gross thickness of 300ft relief in P50 volumetric calculation.

Figure 16 – Deterministic Volumes for Polaris Lead

10. Rathlin Basin – Challenges

While the Rathlin Basin is geologically attractive (being an analogue East Irish Sea Basin type play), it

is very much a frontier area, with subsequent associated risks - primarily seismic imaging, seal /

reservoir quality and whether sufficient volumes of hydrocarbons have been generated.

Operational difficulties are also an issue in the area.

During the course of the licence Providence contracted PGS to undertake a feasibility study for the

design and acquisition of a modern 3D seismic survey in the Rathlin Sound where the Polaris Lead

has been identified. This study determined the optimum acquisition requirements for better imaging

of the Polaris lead. Tides and currents were reviewed, along with vessel and streamer

manoeuvrability concerns. Manoeuvrability is a particular concern in this area given the confinement

of the survey area between the mainland and Rathlin Island, coastal bathymetry and the presence of

strong currents and cyclic tides.

The bathymetry surrounding Rathlin Island is complex with water depths typically 70m but reaching

depths of up to 126m. The Rathlin sound itself has a high density of shipping activity, owing to daily

ferry traffic between the mainland and Island, together with commercial fishing activity - both

activities pose navigational and planning risks and demand careful consideration. Metocean and

Mooring analyses feasibility studies commissioned to assess the probability of a MODU rig

emplacement in the Rathlin sound area, using modelled bathymetry, tide and current data (in lieu of

relevant, available environmental data) provisionally indicate that a standard 3rd generation rig could

be moored per API requirements, however, a detailed site survey would need to be conducted at the

location to determine actual seabed anchoring conditions and rule out any possible obstructions in

the area. Strong tidal flows are known to exist through the Rathlin sound and combined with the

complex bathymetry these can produce tidal races and eddies which can form at short notice with

excessive current speeds, making mooring operations very problematic. As such, material potential

risk exists regarding the feasibility of successfully mooring a MODU rig within the sound warranting

detailed further studies possibly extending to acquisition of a site survey in order to fully assess and

determine the full extent of the operational challenges in drilling a well in the Rathlin sound.

These operational difficulties, combined with the geological risk associated with the frontier nature

of the project – particularly in this low oil price environment have contributed to the decision to

relinquish this acreage.