relinquishment report for licence p.1832, block … · relinquishment report p.1832, block 204/14c...
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Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 1
RELINQUISHMENT REPORT FOR LICENCE P.1832, BLOCK 204/14c and 204/19c
Licence: P.1832
Blocks: 204/14c and 204/19c
26th Round Traditional Licence
Operator: Ithaca Energy Inc. 25%
RWE Dea UK SNS Limited 20%
Sussex Energy Limited 15%
Edison International SpA 25%
Oyster Petroleum Limited 15%
LICENCE SYNOPSIS
Valiant Petroleum was initially awarded 100 % interest in licence P.1832, Blocks 204/14c and
204/19c in the 26th Licensing Round with a start date of 10th January 2011 (Figure 1). Valiant
transferred a 10% carried interest to Sussex Petroleum in P1832 Blocks 204/14c and 204/19c in Q4
2011. Subsequently Valiant farmed out 20% of licence P.1832 (and P.1631 which included the
Handcross South prospect) to RWE Dea on 28th March 2013 reducing its interest to 70%. In April
2013 Valiant Petroleum was acquired by Ithaca Energy Inc. through a corporate transaction. On
17th June, Ithaca Energy executed a farm-out agreement with a subsidiary of Edison International
SpA for a 25% interest in the licences containing the Handcross prospects. On 23rd September 2013
Ithaca Energy announced the farm-out to Oyster Petroleum Limited of a 9% working interest and a
further 5% working interest to Sussex Energy Limited. Finally on 20th December 2013 Ithaca
Energy announced the divestment of a further 6% working interest to Oyster Petroleum in the
Handcross licences, prior to the conclusion of the Handcross exploration well.
Blocks 204/14c and 204/19c lie in the West of Shetlands in the Judd Basin. Commercial
accumulations are found in this area in sandstone reservoirs of Palaeocene age. These sands were
deposited as submarine fans and form high quality reservoirs although are often dependant on
stratigraphic closure for success. Foinaven, Schiehallion and the Loyal Fields are successful
examples to the south while the Suilven Field is located in the adjacent block 204/14a and the
Tornado discovery lies only 5km to the northwest (Figure 1).
Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 2
The Handcross North Prospect has been defined as part of a larger seismic anomaly which also
delineates the Handcross (South) Prospect and extends across Blocks 204/18b and 204/14c. The
overall structure is closed by the lateral pinchout/shale out into a submarine fan neck at the T36
level of the Palaeocene. Detailed mapping shows that the anomaly is divided by the Suilven fault
with the Handcross North Prospect lying in Block 204/14c and mapped as a small footwall crest
structural closure on this fault. The contingent well commitment of licence P.1832 rested on the
results of the Firm commitment to drill a well on the Handcross (South) Prospect in License P.1631,
Block 204/18b.
The firm commitment well 204/18b-2A was drilled on the Handcross (South) Prospect and reached
its final depth in January 2014 but no hydrocarbons were found in the target T36 and T35 sands.
The negative result of this well significantly downgraded the Handcross North prospect in that the
geophysical attribute anomaly was proved not to be a hydrocarbon indicator. The licensees were
subsequently granted a waiver on the Contingent commitment well for P.1832 and have since
surrendered the licence.
Fig 1. Location of Block 204/14c and 204/19c
Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 3
WORK PROGRAMME SUMMARY
The licencees made a firm commitment to reprocess 170km2 of 3D seismic data and undertook a
contingent commitment to 'drill one well on the Handcross North lead to a depth of 300m or 50m
into the T35 shale whichever is the deeper'. The contingent commitment was to be based on the
technical evaluation of the reprocessed and inverted 3D seismic data and calibration using results of
the firm well on Handcross (South) (204/18b-2A). The DECC agreed to waive the contingent well
commitment further to the failure to find hydrocarbons at the Handcross (South) well location.
DATABASE
Recent broadband 3D seismic data was obtained from PGS (PGS Geostreamer FSB11 survey,
PSTM and Simultaneous Inversion data) and this was used to validate the Handcross prospect
(Figure 2). Initial definition of the Handcross prospect area had been undertaken using
conventional 3D seismic data utilising 1400km2 of the CGGV UTMOST survey (consisting of
PSTM, PSDM with Pre-stack AVO inversion, Figure 2). A full suite of offset wells was available
for the evaluation.
Figure 2. Seismic & Well Database
Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 4
PROSPECTIVITY UPDATE AND FURTHER TECHNICAL WORK
Handcross North Prospect
The Handcross feature is defined by an extensive amplitude anomaly which is mapped at the top
T36 seismic event and calibrated to dry wells 204/14-2 and 204/18-1 that have well developed
reservoirs at the target T36 level (Figure 3). The Handcross North Prospect was identified as the
northern part of this feature. The northern part is separated from the south by the Suilven Fault and
was mapped as a small footwall crest structural closure on this fault (Figures 4 and 5).
Figure 3. T36 Upper sand Vp/Vs Response (Depth contours 10m)
Figure 4. Handcross North Depth Map at T36 Sand level
Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 5
The anomaly south of the Suilven Fault, in the adjacent Block 204/18b was recognised as a separate
but larger prospect known as Handcross (South) (Figure 3). In order to de-risk both prospects
further work was undertaken to better understand the nature of the amplitude anomaly.
Figure 5. Seismic lines over the Handcross North Prospect, (Data courtesy of PGS).
AVO attribute processing was undertaken in an attempt to characterise the amplitude anomaly prior
to drilling. Fluid substitution modelling demonstrated that a characteristic change of amplitude
should be observed with offset for oil or gas filled formations. Applying the AVO methodology to
3D seismic data shows an anomaly in the Vs/Vp domain. This was considered most probably the
result of a hydrocarbon fluid effect.
One dimensional modelling for the target formation was undertaken using the 204/14-2 well. Fluid
effects are shown to result in a drop in acoustic impedance and Vp/Vs, separating the response from
that of water (Figure 6). The anomaly conforms to a Class III AVO anomaly which means that in
the case where oil or gas is present, a slight increase in amplitude occurs with offset. Some
encouragement was also provided by the anomaly being conformable to structure over the
Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 6
Handcross North Prospect (Figure 4). Subsequently, the absence of any hydrocarbon (oil or gas)
found in the Handcross well, 204/18b-2A, has demonstrated that the geophysical anomaly does not
represent a hydrocarbon fill indicator at the T36 sand interval.
Figure 6. Fluid Substitution Modelling
A detailed rock physics study was carried out by Ikon Geoscience post drilling the Handcross
(South) well in order to properly understand the link between the log responses and the mapped
seismic anomaly. The conclusions of this study are summarised in the relinquishment report for
Licence P1631.
Whilst the geophysical anomaly forms the basis of the Handcross North prospect it is evident that
the results of the Handcross South well significantly increase the risk that the seismic response at
Handcross North is not associated with hydrocarbons and any well drilled on the Handcross North
prospect is likely to be dry.
Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 7
Other Leads in Blocks 204/14c and 204/19c
Two additional small and high risk leads were identified in Block 204/19c, namely the Ard and the
Ech leads, (Figure 1). Both leads are mapped at the T45 level and are thought to have been
developed on a deeply incised Top Balder landscape creating structural and partly stratigraphic
features that lie to the north and south of the well 204/19-5 (Figure 8). A thin oil leg at the T38
level was encountered in 204/19-5, but alone this does not significantly reduce the seal risk
attributed to these leads.
Neither lead is considered large enough to warrant further investigation, given the failure to find
hydrocarbons in the Handcross prospect (Table 1).
Figure 8. Depth Map and Geoseismic Section over the Ard and Ech Leads
Relinquishment Report P.1832, Block 204/14c & 204/19c April 2015 Page 8
Table 1. Summary Table of Volumes and Risks for Remaining Prospects and Leads in Blocks
204/14c and 204/19c
Resource and Risk Summary
Prospect Stratigraphic
Lead level Unrisked recoverable resources
Discovery Oil MMbbls Gas BCF
Name Low Central High Low Central High
Geological Chance of Success
%
Handcross North Paleocene T36 7.5 11.6 17.5 10.1 13.6 18 10
Ard Paleocene T45 45 10
Ech Paleocene T45 35 10
CLEARANCE
Ithaca confirms that the OGA (DECC) is free to publish this report and that all third party
ownership rights have been considered and appropriately cleared for publication purposes.