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Oil & Gas UK Exploration Conference 2018Prospect Maturation & Post well Lookbacks: Sharing Good Practices for Success

Key Messages from the 2017 Exploration Drilling Programme

Alana Finlayson

Senior Exploration Geologist February 2018

Graphic3

Today’s agenda

2017 Performance

Rig Programme

Post Well Analysis Themes

Risk and Resource Assessment

• To date 16 wells concluded at an average well

cost of £21.5mm – halved since 2014

• 172 mmboe potentially commercial recoverable

resources in 7 discoveries

• 38% commercial, 44% technical success rate

• COS risking accurate, discovered volumes in

line with expectations

• Finding cost $2.5/boe @ $/£ 1.25

2017 Exploration Drilling Provisional Results – as at Prospex 2017….

Titan

Achmelvich

S. Maclure x 2

Capercaillie

Verbier

Shearwater

Sean Q

Temple Wood

Sturgeon

Sween

PartridgeRanger

Jock Scott

Craster

Rona Ridge*

* Rona Ridge under evaluation

E&A Well Activity

2017 2018 2019Q1 Q2 Q4Q3

CN

SN

NS

SN

S /

EIS

Wo

S

Winchelsea

Jock Scott

Verbier

Halifax

Avalon

S Maclure Mariner Seg 9/10

Skene N Tr

Titan

Callater SE

Shearwater

Yeoman

Q1 Q2 Q4Q3Q1 Q2 Q4Q3

Partridge

Trias

Craster

Sween

Sturgeon

Temple

Wood

Sean Q

Ranger

Achmelvich

Ravenspurn R1+DST

Capercaillie

Harrier

Exploration

Appraisal

Some rhetorical questions

Play analysis• Are we play as well as prospect driven?

Prospect evaluation• Do we deliver against our predictions?

• Do we consistently address risk and resource?

Portfolio analysis• What are our targets?

• Do we consistently value & rank our plays & prospects?

• Do we target the optimal drilling opportunities?

UKCS Discovered Resource 1965-2014

P01

P02

P05

P10

P20

P30

P40

P50

P60

P70

P80

P90

P95

P98

P99

0.1 1.0 10.0 100.0 1000.0 10000.0

Pro

bab

ility

of

esce

edan

ce

Rec Resource (mmboe)

1st Third 1965-1984:

2nd Third 1984-1993:

3rd Third 1993-2014:

UKCS Discovered Resource 2015-17

P01

P02

P05

P10

P20

P30

P40

P50

P60

P70

P80

P90

P95

P98

P99

0.1 1.0 10.0 100.0 1000.0 10000.0

Pro

bab

ility

of

esce

edan

ce

Rec Resource (mmboe)

1st Third 1965-1984:

2nd Third 1984-1993:

3rd Third 1993-2014:

2015-2017 discoveries

New plays

Chance of success

• OGA using historical well data to

calculate success rates for plays

across UKCS

• Historical success rates across all

plays tested 2015-17 45.3%

• Industry predicted COS 44.9%

• Actual success rate 45.2%

• When risking prospects take into

account historical success rates

and risk prospects relative to this

Reminder - Post-well analysis themes

• Missing regional play-based work, including charge

• Data/Knowledge limitations; postage stamps, acqn, management, continuity

• Improved peer review, performance tracking and continuous learning

• External impacts - corporate/NV, Firm wells [schedule, rigs, oil price]

• Over-reliance on geophysics / DHI & lack of geological model

Christian Mathieu Dec’15, 98 wells, 24 companies, 2003-2013 https://www.ogauthority.co.uk/exploration-production/exploration/21st-century-roadmap/

Post-well analysis themes- Geophysics

Why do things go wrong?

Misunderstood amplitude anomalies

• Consider alternative scenarios e.g. ‘freak’ lithologies

• Do the basic rock physics analysis

Poorly calibrated geophysical models

• Make sure that all available data is used

• Highlight data that doesn’t fit the model

Amplitude anomalies not evaluated/risked in a systematic manner

• More use of existing risk evaluation applications

Organisational culture - staff unable to challenge geophysical experts

• Continual learning

Key messages

UKCS exploration metrics on an upward trend

Discovered volumes predictable; discovery rates are high

E&A successes delivered across a range of basins and plays

What more can be done to stimulate E&A activity in UKCS?

OGA, industry and government need to continue to work together

Thank youQuestions?