601st Quarter 2013

newsletterMULTI-CLIENT SEISMIC IMAGING

Lebanon is ready. Are you?

Also in this edition...• Brazil: Exploration tools for round 11• Action stations in Western Mediterranean• New East Indonesia regional survey

• Spectrum extends 2D seismic into S. Africa• Revived exploration offshore Iceland• An interview with CEO, Rune Eng

The first Lebanese Offshore Licensing Round is upon us. Modern, high-quality 3D seismic data will be the key to evaluating this prospective and unexplored area.

Spectrum’s new-look quarterly news round-up

Brazil: Spectrum Multi-Client seismic to offer advantagein Round 11Brazil’s President Dilma Rousseff has now ratified the long-awaited licensing Round 11 and the ANP has released the blocks to be included in Round 11 which is anticipated to

close in May 2013.

Spectrum has recently acquired 38,588 km of new long offset 2D seismic data covering the Foz do Amazonas, Barreirinhas, Ceará and Potiguar Basins in the Equatorial Margins offshore Brazil. In addition, a re-processing effort is underway on a seismic dataset tying the Foz do Amazonas, Pará-Maranhão and Barreirinhas Basins. Spectrum offers over 48,000 km of Multi-Client seismic in this area of

extremely high prospectivity.

“High levels of acquisition productivity during the shooting of these surveys enabled Spectrum to respond to industry interest and add the Potiguar basin survey as the last phase of the Round 11 campaign”, commented Richie Miller, Spectrum EVP for North and South America, “Spectrum now

has a new long offset dataset over most of the deep water blocks that are being offered by ANP in Round 11”.

Spectrum’s Multi-Client seismic data is located in all but one offshore basin that are included in Round 11 and cover most of the deep water blocks that have been released by the ANP. Final PSTM, PSDM and other ancillary products are

available, or will be available, from Spectrum for Round 11.

New Seismic Acquisition

Foz do Amazonas Ph1 and Ph2 21,369 km

Northern Margins Barreirinhas 6,614 km

Northern Margins Ceará and tie-lines 6,466 km

Potiguar 4,139 km

Total new acquisition 38,588 km

Newly Re-processed Seismic

Foz do Amazonas - Pará-Maranhão 9,663 km

Total data available for Round 11 48,251 km

Dates Announced for First Lebanese Licensing Round

Spectrum have now completed the acquisition of more than 3,000 sq. km of 3D Multi-Client seismic data in the south west EEZ offshore Lebanon.

Spectrum’s initial interpretation of the seismic demonstrates this area has the highest chance of successful hydrocarbon exploration offshore Lebanon. The data shows that structures in south-west Lebanon are less complex than those encountered in the southern Levant gas discoveries to the south, and suggests that the low risk Lebanese structures will usher in an age of hydrocarbon richness for the Lebanese nation.

Delivery of the PSTM cube will be in March 2013.

Lebanese Cabinet Ministers attend a session at Baabda Palace on 27th December and announced the dates for the 1st Offshore Bid Round

3D Multi-Client Seismic shows huge prospects

LEB

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SPECTRUM 3D SEISMIC

During a meeting of the Lebanese Cabinet chaired by President Michel Sleiman at Baabda Palace on Thursday December 27th 2012, the timetable for the 1st offshore Lebanon bid round was discussed and agreed.

The announcement of the opening of the first bid round has been eagerly anticipated for more than two years. This follows very soon after the appointment of a six member Petroleum Administration in November.

The ball is now well and truly rolling and the next stage is for oil companies to submit proposals for pre-qualification

from 1st February, 2013. The list of successful companies will be made public on 18th April 2013.

The next key date is May 2nd with the formal opening of the bid round. At least 3 companies are required in each bidding group. According to a recent report from Upstream, the round will focus on areas close to the borders with Israel and Cyprus. Three types of licenses are available, reconnaissance (3 yrs), exploration (10) and production (10).

This year, 100 km off the coast from Barcelona, exploration is hotting up as the Spanish Authorities have gazetted a number of exploration License applications. These applications lie over the deep water basin at the confluence of the Ebro and the Rhone deep water fans, and represent one of the last great unexplored oil basins in the Mediterranean.

Spain has an “open door” licensing policy, so oil companies choose the areas they are interested in and apply directly. If the applications are suitable, the areas requested are gazetted and competing companies have 60 days to make a counter proposal. The clock is ticking and the latest blocks are open for competing bids only until March 17th 2013.

But what do we know of the prize here? Actually Spectrum has an industry leading position offshore Spain as we have the only Multi-Client dataset comprising of vintage data and our own data acquired in 2001, both reprocessed in 2011. Last year we added data that allows the near-shore fields and discoveries to be tied into the deep-water basin. These data illuminate a deep basin with >10 km of sediments, and an especially thick Tertiary sequence that mirrors the geology of the Eastern Mediterranean. On our reprocessed seismic we can map thick sands in sheets and channels with organic mudstones, ripe for being reservoirs and source rocks. Suspended in this sequence is a flat, dinner-plate shaped unit of impermeable salt near the sea bed. This salt “canopy” is also present in the Eastern Med lying above the super-prolific reservoirs and traps of the Early Miocene there. Yet the basin is different in two, very exciting ways.

Firstly, whilst the recent giant discoveries offshore Israel have found dry gas formed from bacterial activity, the West Med basin offshore Spain is an active thermogenic oil basin. Oil fields in shallow water up on the shelf have a Miocene and Oligocene source rock that has charged fields there with over a billion barrels of oil. Down in the basin centre the same source rock is present and natural oil slicks or “seeps” are seen on satellite images of the Mediterranean sea in a “ring of oil” above the edges of the salt canopy.

So oil is being generated below the salt and migrating up vertically above the edges of the impermeable salt canopy.

Secondly, the salt is so mobile in the deepest part of the West Med basin that the sediments above it have started to sink through the salt and settle on the base salt – creating a window for oil to migrate through the middle of the salt canopy – like a hole through a donut! All around these holes or “salt-welds” are beautiful post salt oil traps – looking just like prolific analogues from many other salt basins in the world.

With our un-paralleled imaging of the post salt and pre-salt sandstones and Cretaceous limestone plays, we have evaluated the deepwater potential of the newly gazetted blocks and the unbelievably still unlicensed acreage that surrounds them. There is little doubt that this could be a fantastically prospective region in the future – yet the gazettal of the first blocks suggests that the glorious future for the West Med basin has already arrived. As the Spanish winter yields to the rising sap of a vigorous spring, it’s action stations for application for offshore Spanish acreage!

Action stations in theWestern Mediterranean

Spain

France

Italy

CorseCorse

Pais VascoPais Vasco

La RiojaLa Rioja

CantabriaCantabria

Isles BalearesIsles Baleares

BanzartBanzart

AndorraAndorra

BajahBajah

AragonAragonCatalunaCataluna

Castilla-La ManchaCastilla-La ManchaSardegnaSardegna

AndaluciaAndalucia

ValencianaValenciana

Castilla y LeonCastilla y Leon

Midi-PyreneesMidi-Pyrenees

NavarraNavarra

AquitaineAquitaine

Languedoc-RoussillonLanguedoc-Roussillon

Provence-Alpes-Cote d'AzurProvence-Alpes-Cote d'Azur ToscanaToscana

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Spectrum's Multiclient 2D Seismic survey projects in the Western MediterraneanSpectrum's 2D Acquired, Reprocessed and current reprocessing projects in the Western Mediterranean Datum: WGS84

Projection: UTM 31NDate: 23 January 2013

±0 50 100 150 200

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West Mediterranean 2D Multi-Client Seismic Coverage

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Spectrum multi-client 2D seismic surveys, South Africa

Datum: WGS 84Date: January 2013

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Spectrum 2D seismic surveys, South Africa

Spectrum multi-client 2D seismic surveys, South Africa

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Spectrum multi-client 2D seismic surveys, South Africa

Datum: WGS 84Date: January 2013

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Spectrum 2D seismic surveys, South Africa

Spectrum multi-client 2D seismic surveys, South Africa

Spectrum has commenced the next phase of its 2D Multi-Client campaign in South West Africa with a 9,000 km seismic survey over the South Africa Orange basin. The program ties in with the survey over the Namibia Orange Basin that was acquired in Q4 2012.

The seismic data is being acquired by the vessel Northern Explorer and the data will be processed at Spectrum’s processing center in the UK, with the final products scheduled for delivery at the end of Q2 2013. The survey is supported by industry funding.

The extraordinary oil and gas potential offshore South West Africa has clearly been underestimated, however new exploration technologies are rejuvenating this margin. Abundant oil seeps, basin model studies and high resolution 2012 seismic underpin excellent prospects for exploration drilling campaigns.

In neighbouring Namibia the first offshore exploration well, Kudu 9A-1, was drilled in the Orange Basin and discovered gas between 1.3 and 3.0 TCF in Lower Cretaceous

sandstones intercalated with volcanic layers. The Orange basin hydrocarbon discoveries have primarily been gas, leading to the perception that the region is primarily gas prone. However previous studies have proposed an oil case for these basins. A number of oil shows/indications in wells imply there is a working oil prone hydrocarbon system present in the shallow water areas and can be extrapolated into the deepwater.

Spectrum extends its 2D campaign into South Africa

Spectrum commencesnew MC2D survey inEasternIndonesiaSpectrum, in partnership with Nordic Geo Services Ltd, has commenced the acquisition of a 5,000 km 2D Multi-Client seismic survey offshore Eastern Indonesia.

The East Indonesia Regional (EIR-13) program will consist of long-offset marine seismic data shot over a number of unexplored/underexplored basins of East Indonesia. This ground-breaking programme is located in open acreage and includes lines close to recognised hydrocarbon areas. Nordic Geo Services is providing acquisition services, with Spectrum providing seismic processing of the acquired data. Final deliverables, including PreSTM and AVO products, are expected to be available in July 2013.

Pelotas Basin offshore Brazil:New 2D SeismicSpectrum is acquiring 7,500 km 2D Multi-Client seismic survey in the Pelotas basin offshore Brazil in anticipation of future licensing rounds.

The Pelotas basin is a frontier area with little seismic coverage. The survey will tie in to the extensive 2D seismic coverage in neighboring Uruguay that Spectrum markets to the industry.

Revived Explorationoffshore Iceland

Iceland is not producing oil or gas but has initiated

exploration offshore by the award of it first two exploration

and production licenses in January 2013.

Iceland announced their very first oil and gas licensing round of some 40,000 square kilometres on the Jan Mayen Ridge that lies between Norway and Iceland in 2009. In October 2011 the second licensing round was announced for the Icelandic Continental Shelf, in the Dreki Area northeast of Iceland. This resulted in the award in January 2013 of its first licenses for exploration and production of hydrocarbons to operators Faroe Petroleum and Valiant Petroleum.

TOOLS FOR EXPLORATION

No deep wells have been drilled on the Icelandic Shelf. However, for the purpose of exploring for hydrocarbons, exploration activity and data acquisition has been ongoing on the Icelandic Shelf and Jan Mayen Ridge from the 1970’s. Seismic data has been acquired by different geophysical companies of which a substantial part (more than 10,000 km) is available through Spectrum, including long-offset seismic ideal for AVO analysis. More recently an aeromagnetic survey and Satellite Synthetic Aperture Radar data have been acquired. Finally the prospectivity has been highlighted in a sampling survey uncovering good quality sands and rocks of the same age as source rocks on Greenland as well as 10 gravity cores and 2 dredges in 2011 indicating active seepage of Jurassic oil and the existence of a petroleum system on the Jan Mayen Ridge.

GEOLOGICAL SETTING

The license areas are on a ridge that forms part of the Jan Mayen microcontinent, that lies between the conjugate margins of both East Greenland and the Norwegian Continental Shelf. The Jan Mayen Ridge is therefore thought to have potential for hydrocarbon accumulations because of

its geological similarity to hydrocarbon basins including the Jameson Land Basin onshore East Greenland, where oil is known to have been generated and preserved in sandstone bodies, as well as West of Shetland, the Norwegian Sea

and the North Sea. Seismic data from the area highlights the possibility of pre-rift sedimentary sequences below the basaltic complex and could offer a potential hydrocarbon source. Furthermore bright spots on the seismic as well as pockmarks on the seafloor indicate the presence of

hydrocarbons in the basin.

WHAT’S NEXT

With the licensing round further exploration activity will happen to unravel the Icelandic Continental Shelf. As part of the awards the two licenses are required to undertake geophysical work including a drill/drop decision in both licenses in 3 sub-periods with the possibility to relinquish after each until year 2020 for license 2013/01 and year 2023 for license 2013/02.

Licenses 2013/01 %

Faroe Petroleum Norge AS (operator) 67,5

Iceland Petroleum 7,5

Petoro Iceland 25

Licenses 2013/02 %

Valiant Petroleum (operator) 56,25

Kolvetni 18,75

Petoro Iceland 25

Prospectivity map from “Preparations for awarding licences for exploration and production of hydrocarbons. Project G-1: Basic

premises, possible development paths and scenarios” by Sagex.

More high-calibre recruits for Executive ManagementDuring early 2013 more key personnel joined the Spectrum executive team. Kim Gunn Maver started in January 2013 as Executive Vice President of NW Europe. Kim joined from RXT where he had worked as VP of Sales and Marketing since 2011.

Previously, as Managing Director of Ødegaard, a service company focused on extracting rock properties from seismic data, he developed the company into a leading provider. In 2006 Schlumberger acquired Ødegaard and Kim became the VP of the merged seismic reservoir characterization businesses. Kim has a M.Sc. and Ph.D. in geology from Copenhagen University and a MBA from Copenhagen Business School.

As Executive Vice President of NW Europe Kim’s main responsibilities will involve the identification of new business opportunities and Multi-Client product development to enhance Spectrum’s portfolio in the region.

In February Spectrum welcomed Graham Mayhew as Executive Vice President for the Africa Business Unit. Graham has 30 years’ experience in the seismic industry, having previously worked for Western Geophysical, Cogniseis, Landmark and WesternGeco in various managerial roles.

During the last 14 years Graham has been focusing his efforts on developing new ventures and the Multi-Client business in Africa for WesternGeco where his last role was Multi-Client manager for Europe and Africa. Graham’s experience will be an important boost for Spectrum to further grow its presence in Africa.

In addition to new members of the Executive team, Spectrum is also pleased to announce the return of Mike Johnson as Senior Vice President, Business Development in the EAME region. Mike has extensive experience in designing and developing Multi-Client projects in NW Europe, Africa, the Mediterranean and as far afield as the south west Atlantic.

Interview with RuneThe Oil & Gas Financial Journal recently interviewed Spectrum CEO Rune Eng for one of their forthcoming Focus Reports. Below is a exerpt from that interview:

What can we expect to see from Spectrum in the coming years?

We aim to be number one in 2D seismic data. Spectrum will also step into the 3D market. We have already acquired out first Multi-Client 3D and we will acquire more 3D data. Most important is our vision. We want to differentiate ourselves so that we are delivering companies prospects rather than data. We have to be able to give them the results of previous wells and tell them why they were dry. We have to come up with our own exploration stories and think like an oil company. To this end, we are employing former exploration managers from oil companies who are the “storytellers” in our company. They bring credibility, logic and passion through the specific experience they have gained.

What is the next step in the development of the company?

2012 is not going to be a record year for very long. 2013 will be better and this is thanks to us having good visibility on projects and on the people who work for us. Our industry is based on skilled people. 2013 will be the first full year where the new organizational structure is tested and this will have a major impact on the growth of the business. I want our customers and the industry to look on us not as a seismic company, but one which sells prospects to oil companies - a type of prospect generator company. We use 2D, 3D and EM as tools to inform the oil companies on where they should go.

My vision for the company is that the client enters our interactive room with a global map of seismic data. They will ask for information on a region and we will call in our relevant expert who will have an encyclopedic knowledge of the region. We aim to astound the client with our in-depth analysis of seismic data around the world and deliver the client prospects. I see the seismic value chain as starting with airborne gravity magnetics, moving to 2D lines, infilling those lines, then 3D seismic, we want to be at the end of this value chain. If there was a hybrid company that sits between seismic companies and oil companies, that is Spectrum and we are getting there.

Full interview at http://www.energy.focusreports.net

United KingdomSpectrum Geo Ltd.+44 1483 730201 mc-uk@spectrumasa.com

United StatesSpectrum Geo Inc.+1 281 647 0602 mc-us@spectrumasa.com

SingaporeSpectrum (Singapore)+65 6827 9773mc-asia@spectrumasa.com

AustraliaSpectrum ASB Pty Ltd.+618 9479 5900mc-au@spectrumasa.com

www.spectrumasa.com

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