SKUA® Structure and Stratigraphy

A Need for Change The search for hydrocarbons takes place in a broad range of geological settings. Geoscientists face constant challenges in the characterization and modeling of subsurface geology, and new demands for increased accuracy and detail. Traditional modeling processes are limited by their design constraints, and can only operate through compromises and approximations. Outdated techniques, using pillar-based 3D modeling, fail in the presence of Y faults, oblique faults or thin layers. Until now, the workaround has been to simplify the fault geometry or to remove faults from the model. Pillar-based techniques also introduce deformations of the grid cell geometry, which adversely affect the distribution of petrophysical properties and the reliability of flow simulation results.

A Revolution in Modeling Paradigm™ has met this challenge through the development of a mathematically-derived 3D methodology, known as the UVT Transform, that decouples the model from

the grid and removes subsequent limitations and distortions. Enabled by Paradigm SKUA® (Subsurface Knowledge Unified Approach) the UVT Transform generates a fully-3D description of the subsurface, including the structure, stratigraphy, geological grid, and flow simulation grid.

A Model with Many Uses

In addition to the comprehensive description of the subsurface, the direct output of the SKUA UVT model can be used to compute a wide variety of structural attributes that facilitate fault trap and fractured reservoir analysis. These include:

• Displacementmapseverywhereonthe fault surface

• Juxtapositionmaps

• Shale-gougeratioandweighted-shale- gouge ratio on faults

• Spillpoints

• Deformationoflayers,strainandstress

• Probabilityoffracturinganddirection of fractures

UVT Transform®: A New Understanding The UVT technology is based on the understanding that horizons represent paleo-geochronological surfaces. Working with a paleo-geographically non-deformed grid, geoscientists can model geobodies, reservoir properties and other attributes in their true depositional state without distorting the current geometry or paleo-geometry.

The geological constraints under which the SKUA UVT model operates provide the interpreter with confidence that the model honors basic geological principles, including:

• Seismicinterpretationdataand well markers

• Dip/azimuthinformation anywhere in the volume

• Wellpathinformation

• Faulttype(normal,inverse) information

• Sequentialstratigraphicand erosion rules

• Intra-formationchrono- stratigraphy

Faciesjuxtaposition,branchingfaultsandhorizontracesonafaultsurface,computedonageologicgrid

SKUA geological grid created using UVT Transform techology

Interpretationand Modeling

Structure and Stratigraphy

© 2011. Paradigm Ltd.and its subsidiaries. All rights reserved. The following are trademarks or registered trademarks of Paradigm Ltd. or its subsidiaries (collectively, “Paradigm”): Paradigm™,Paradigmlogoand/orotherParadigmproductsreferencedherein.Allothertrademarksareownedbytheirrespectiveowners.

www.pdgm.com

The Paradigm Advantage

+ SKUA delivers a true shared earth model with many direct uses, faster processing cycles and higher consistency.

+ Avoids deformation, incorrect spatial correlations and wrong volumetrics common to pillar modeling approaches.

+ Uses all available data and enforces geologic rules to ensure model accuracy.

Features

- Automatic fault network construction

-Faultedhorizonsextendedupto fault planes to create seal models

- Horizon position constrained by well path, even for horizontal wells, and fault displacement information

-Fittowellmarkers,forreviewing seismic interpretation to well mismatch

-Automaticidentificationoffault/ fault contact and manual editing

-Horizon/faultcontactediting

-Faultdisplacementand juxtapositionmaps,SmearGouge Ratio

- Computation of thickness maps, gross-rock volume

- Horizon deformation computation

-Fractureprobabilitycomputation

- Output of T-surfaces to SeisEarth®

Interoperability All Epos®-based applications enable interoperability with third-party data stores, including:

- OpenWorks® 2003.12, R5000

-GeoFrame® 4.5

- OpenSpirit® 3

System specifications - 64-bit, for x64 architecture processors

- Microsoft® Windows® 7, XP, Vista

- Red Hat® Enterprise Linux® 5.3 and above, 6.0 and above

Workflow Optimization The intrinsic knowledge contained in the UVT model enables a one-click generation of many types of data representations required for a variety of workflows:

• 3Dgeologicallyconsistentmapsareautomatically constructed from the faulted and sealed horizons, saving time and improving accuracy when compared to traditional 2D mapping.

• An infinite number of faulted chrono-stratigraphic seismic slices can be extracted directly from the UVT model, enabling a quick and efficient interpretation of stratigraphic formations.

• Paleo-flatteningofseismicvolumescan be performed in order to QC the interpretation and the UVT model, and ensure proper use of seismic attributes inside the reservoir model.

• 3D paleo-geographically consistent geological grids can be computed directly from the UVT model and populated with geologically coherent rock properties, with no need for user interaction.

• SKUAdeliversreservoirgridsoptimizedfor reservoir simulation, including all necessary faults. These can be extracted directly from the UVT model.

• Geomechanical meshes for coupled flow-geomechanical simulations may be exported directly, reducing the need to perform time-consuming, finite element mesh construction.

• 4Dbasinmodelinggridscanbecreated, using a combination of the SKUA model and Paradigm 3D restoration to construct a present-time grid of the basin, and to restore it sequentially and automatically through geological time.

SKUA geological cross-section

3D consistent structural map from SKUA model Faultedchrono-stratigraphicsliceinsideSKUAmodel highlighting stratigraphic features

SKUA® Reservoir Modeling

A Step-Change in Modeling

Accurate reservoir models are essential to hydrocarbon exploration and production, as they are the foundation on which field development optimization and reserves estimation are built. With the Paradigm™ Reservoir Modeling solution, powered by SKUA®, geologists and reservoir modelers have the next-generation software they need to create accurate, unbiased and geologically realistic reservoir models.

Enhanced User Efficiency In one integrated 3D modeling environment, Paradigm Reservoir Modeling provides the workflows, tools and flexibility needed to efficiently and accurately represent the subsurface and its petrophysical content. Thanks to a user-friendly interface, automated work processes, and a complete audit trail, even the novice user can model faster, while tracking every modeling change.

Accurate Uncertainty Assessment The Paradigm solution facilitates the investigation of alternative scenarios as well as the quantification of uncertainties related to the reservoir structure and the

“The efficiency of Paradigm’s SKUA-based Reservoir Modeling solution allows our interpreters to focus more on the interpretation of data and less on modeling limitations. The user-friendly interface, automated processes, and ability to track changes in real time have helped us increase our productivity substantially.”

data and parameters used to construct the model. This results in reliable hydrocarbon-in-place distributions, ranked reservoir models that are representative of the spread in reservoir volumes, and summary uncertainty maps or volumes that are ideal for development or infill target identification.

A Fully Integrated Solution The application’s complete and flexible suite of geostatistical algorithms allows for the integration of a wide range of constraints, including well data, seismic attributes and other geologic information. Tight integration with other Paradigm Epos®-based products enables direct access to facies and logs derived from Geolog®, inversion data from Vanguard® and seismic facies from Stratimagic®, all for use in the reservoir modeling.

No Gridding Artifacts The SKUA Reservoir Modeling solution is unique in offering a reservoir grid that prevents gridding artifacts from affecting facies and petrophysical property models, thus ensuring accurate sand volumes and reservoir connectivity.

SKUA Stratigraphy

Construct a reservoir grid

Perform rigorous data analysis to infer representative input

Populate using geostatistical algorithms for realistic

reservoir models

Quantify uncertainty on any model parameter and rank the resulting realizations

Paradigm SKUA Reservoir Modeling offers step-by-step, integrated workflows.

Reservoir Characterization

Reservoir Modeling using SKUA

SKUA RESERVOIR MODELING FUNCTIONALITIES Paradigm SKUA Reservoir Modeling includes a wide range of functionalities to help users create accurate, unbiased and geologically realistic reservoir models.

SKUA Stratigraphy Using the unique, patented SKUA UVT Transform® technology, Paradigm SKUA Stratigraphy constructs reservoir grids that, unlike pillar-based grids, do not bias the distribution of facies and petrophysical properties. The reservoir grids can be built in any subsurface environment, regardless of the structural and stratigraphic complexity of the reservoir. This improves model quality and accuracy, reduces cycle time, and enables repeatability.

Facies Modeling Facies modeling offers tools and algorithms to generate geologically realistic representations of depositional facies and post-depositional features. Integrated with Paradigm Reservoir Properties and used in combination with Paradigm Reservoir Data Analysis tools, the Paradigm Facies Modeling module includes a flexible, object-based, stochastic simulation algorithm, and an efficient multiple point simulation (MPS) algorithm, IMPALA, developed in collaboration with Ephesia Consult.

Reservoir Properties The Reservoir Properties application contains a flexible and dynamic workflow to populate reservoir grids. It offers an extensive suite of geostatistical algorithms for spatial interpolation (mapping), as well

The Paradigm Advantage

+ Unique and efficient reservoir uncertainty modeling tools investigate the full range of uncertainty.

+ A user-friendly interface and automated work processes help even the novice user model faster.

+ Workflow-based modeling techniques ensure rapid model updating.

+ Paradigm SKUA-based solutions reduce risk by quickly and easily creating multiple, traceable scenarios.

+ The UVT Transform technology improves model quality and accuracy while reducing cycle time.

Permeability model Reservoir risk assessment (JACTA)

Interoperability - Epos 4.1 - Landmark® OpenWorks 2003, R5000 - GeoFrame® 4.5 - Rescue/RESQML™/WITSML - ECLIPSE/CMG/VIP

System specifications - Microsoft® Windows® 7, XP, Vista

Professional (32 and 64-bit)

- Red Hat® Enterprise Linux® 5.3 and above, 6.0 and above (64-bit)

as stochastic simulation for modeling geological facies and petrophysical properties, such as porosity and permeability. A post-processing workflow provides tools for summarizing and analyzing simulation results, together with decision-making support tools such as hydrocarbon column maps and connectivity analysis.

Reservoir Data Analysis The Reservoir Data Analysis module guides users through all the steps required to establish reliable input statistics for constructing robust reservoir property models. It focuses on de-clustering, histogram identification and trend modeling for both facies and continuous petrophysical properties, with or without seismic data.

Reservoir Risk Assessment (JACTA®) (Developed in collaboration with Total)

The Reservoir Risk Assessment system is the industry’s leading tool for evaluating uncertainty in the position and volume of hydrocarbon plays. Designed to integrate

in-place volumes, the system guides users through all stages of the construction of a full 3D reservoir model, capturing uncertainty on algorithms, data and parameters. Hundreds of models can be efficiently generated and analyzed through the combination of scenarios and stochastic simulation.

© 2011. Paradigm Ltd.and its subsidiaries. All rights reserved. The following are trademarks or registered trademarks of Paradigm Ltd. or its subsidiaries (collectively, “Paradigm”): Paradigm™, Paradigm logo and/or other Paradigm products referenced herein. All other trademarks are owned by their respective owners.

www.pdgm.com

SKUA® Reservoir Engineering Reservoir

Engineering

A Comprehensive Solution for Geologists and Reservoir Engineers

In order to present informed reserve estimates, one needs reliable production forecasts, which can only be achieved if they are based on an accurate description of the reservoir. This in turn is dependent on the joint efforts and knowledge of reservoir geologists who construct the geological model, and reservoir engineers who perform a flow simulation of that model.

Until now, these two processes have been completely separate – once the geological model leaves its environment for the engineer’s desktop, it never returns. The Paradigm™ Reservoir Engineering product suite, powered by SKUA® and the patented UVT Transform® technology, bridges that gap by providing a collaborative modeling environment which enables geologists and reservoir engineers to understand, quantify, and document the impact of reservoir geology on production forecasts. It allows geoscientists and reservoir engineers to

efficiently forecast production, assess reserves and optimize field development, while yielding geologically sound production forecasts and production-coherent geological models. Eliminating the need to transfer data from application to application saves project turnaround time, while preserving data integrity.

For reservoir engineers, it also provides a collaborative reservoir flow simulation workflow that enables the production of geologically consistent production forecasts, as well as engineering validation of the reservoir models.

Unlike competitive offerings that can only construct pillar grids which may not accurately reflect the reservoir geometry and may lead to numerical errors in flow simulation, Paradigm Reservoir Engineering offers an efficient and systematic integrated approach to coherent reservoir forecasting. Reservoir grids created using the Paradigm application maintain the integrity of the geology, limit numerical errors in flow simulators, and deliver simulation-ready reservoir models.

SKUA reservoir engineering streamlines LGR, production curves, and grids

UVT Transform: A New Understanding The UVT Transform technology was developed on the premise that 2.5D pillar gridding is insufficient to describe 3D reservoir models.

The UVT Transform is based on true 3D technology, which enables the modeling of reservoir properties and other attributes in their true depositional state, resulting in accurate reservoir models. This technology also allows the construction of optimal flow simulation grids which best respect cell orthogonality requirements, while handling any faulting.

The true 3D approach of the UVT Transform also guarantees a geologically coherent upscaling between the fine-scale geologic grid and the upscale flow simulation grid, as both are issued from the same UVT model.

Finally, the UVT Transform enables the creation of flow simulation grids with curvilinear pillars potentially aligned in 3D on the main faults, and/or stair-steps along antithetic faults.

Flow simulation grid inside a Y fault zone showing the required stair-step gridding

Reservoir Engineering powered by SKUA

Data Sharing Delivers Fast Results Paradigm Reservoir Engineering uses the patented UVT Transform technology to construct reservoir grids that are optimal for numerical flow simulation. Users can compare the dynamic behavior of fine geological models and coarse flow simulation models, set up and launch multiple flow simulation scenarios, and analyze and manipulate flow simulation results. Reservoir models may be screened by rejecting those whose dynamic behavior is inconsistent with field observations.

All modules are workflow driven to enable rapid iterations for production uncertainty analysis and history matching, while preserving the integrity of the geological model. The workflow approach is unique: It facilitates use of the software by non-expert users, and generates a rigorous audit trail by preserving all information related to the models.

Flow Simulation Grids The Flow Simulation Grid module enables the construction of reservoir grids optimized

The Paradigm Advantage+ Improves project turnaround time while yielding geologically sound production forecasts and coherent geological models.

+ Seamless integration of reservoir modeling and flow simulation eases collaboration between geoscientists and reservoir engineers.

+ Early understanding of the dynamic behavior of reservoir models enables focus on geological features that impact production.

+ Production uncertainty assessments based on multiple geological scenarios facilitate efficient investigation of development risks.

Interoperability - Epos 4.1

- OpenWorks® 2003.12, R5000

- GeoFrame® 4.5

- Rescue/RESQML™/WITSML

- ECLIPSE/CMG/VIP

System specifications - Microsoft Windows 7, Vista, XP Professional (32 & 64- bit)

- Red Hat® Enterprise Linux® 5.3 and above, 6.0 and above (64-bit)

for flow simulator requirements. The grids can be constructed, regardless of the structural and stratigraphic complexity of the subsurface, by creating stair-step faults. They can then be exported to all commercial flow simulators. Production Data Analysis/Reservoir Simulation Pre-processor These modules provide a collaborative environment for geoscientists and reservoir engineers. They enable the creation of input parameter files for commercially available reservoir flow simulators, the launch of simulation runs, and the loading, visualization, analysis and manipulation of historical production data and flow simulation results.

These applications are aimed at facilitating the comparison of alternative flow simulation scenarios. They also allow the investigation of uncertainty in both geological and flow simulation models, providing an understanding of the most important parameters and highlighting those models which are closest to

Flow simulation grid with LGR

observed historical production data scenarios and stochastic simulation.

LGR and Upscaler The LGR and Upscaler module provides a systematic yet flexible approach to grid coarsening (upgridding) and property upscaling; grid refining (downgridding) and property downscaling; and local grid refinement (LGR) construction, visualization and export to commercial flow simulators.

Fracture Modeling (FracMV™) FracMV (developed by structural geology experts Midland Valley) uses fracture density and orientation information to generate geologically constrained discrete fracture networks (DFN). It provides a method to generate fracture-related flow properties directly from the fracture network, which can then be exported to a reservoir flow simulator.

Multi-scenario reservoir simulation analysis