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RPS Energy Oza&Atala Independent Estimate of Reserves and Resources
Table of Contents
1. EXECUTIVE SUMMARY................................................................................. 1
1.1 Oza ....................................................................................................... 1
1.2 Atala...................................................................................................... 2
2. OZA................................................................................................................. 4
2.1 Geology and Geophysics...................................................................... 4
2.1.1 Database.................................................................................... 4
2.1.2 Seismic Interpretation ................................................................ 4
2.1.3 Depth Conversion ...................................................................... 4
2.1.4 Detailed Discussion of Structure Maps ...................................... 5
2.2 Petrophysics ....................................................................................... 11
2.3 Volumetric Estimates .......................................................................... 11
2.3.1 K7.2.......................................................................................... 11
2.3.2 L2.2 .......................................................................................... 12
2.3.3 L2.4 .......................................................................................... 13
2.3.4 L2.6 .......................................................................................... 13
2.3.5 L7.0 .......................................................................................... 14
2.3.6 M5.0 ......................................................................................... 15
2.4 Reservoir Engineering ........................................................................ 16
2.4.1 First Phase: Re-start Production from Existing Wells............... 17
2.4.2 Second Phase: Drill Additional Production Wells ..................... 18
2.4.3 Later Developments ................................................................. 20
2.5 Cost Engineering ................................................................................ 21
2.6 Economical Analysis ........................................................................... 24
2.6.1 Commodity Price and Inflation Assumptions............................ 24
2.6.2 Oza Fiscal and Related Assumptions ...................................... 24
2.6.3 Oza Cashflow Sharing Arrangement........................................ 26
2.6.4 Net Revenue Sharing............................................................... 27
2.6.5 Oza Field – Reserves Portion – Hardy’s Net Share of
Production and Cashflow ......................................................... 31
2.6.6 Conclusions (Reserves Portion)............................................... 34
3. ATALA .......................................................................................................... 35
3.1 Geology and Geophysics.................................................................... 35
3.1.1 Database.................................................................................. 35
3.1.2 Seismic Interpretation .............................................................. 35
List of Figures
List of Tables
Table 2.31: Oza Field – Reserves Portion – P90 Case – Hardy’s Net Cashflow ... 32
Table 2.32: Oza Field – Reserves Portion – P50 Case – Hardy’s Net Cashflow ... 32
Table 2.33: Oza Field – Reserves Portion – P10 Case – Hardy’s Net Cashflow ... 33
Table 2.34: Oza Field – Reserves Portion – Key Volumetric Outcomes................ 34
Table 2.35: Oza Field – Reserves portion – NPV Net to Hardy at various
Discount Rates ................................................................................... 34
Table 2.36: Oza Field – Reserves Portion – Key Dates......................................... 34
Table 3.1: U1 Input for Volumetric Estimates ...................................................... 41
Table 3.2: U1 Volumetric Estimates (mid case)................................................... 41
Table 3.3: U2 Input for Volumetric Estimates ...................................................... 42
Table 3.4: U2 Volumetric Estimates (mid case)................................................... 42
Table 3.5: U3 Input for Volumetric Estimates ...................................................... 43
Table 3.6: U3 Volumetric Estimates..................................................................... 43
Table 3.7: U4 Input for Volumetric Estimates ...................................................... 43
Table 3.8: U4 Volumetric Estimates..................................................................... 43
Table 3.9: U7 Input for Volumetric Estimates ...................................................... 44
Table 3.10: U7 Volumetric Estimates..................................................................... 44
Table 3.11: Atala Contingent Resources (Oil) ‘Development Pending’.................. 45
Table 3.12: Atala Contingent Resources (Gas) ‘Development Pending’................ 47
1. EXECUTIVE SUMMARY
RPS Energy was asked to assess independently the reserves and resources for two
Nigerian marginal fields, Oza and Atala and the value to resources, for which a
development plan exists. Both fields have a number of reservoirs and initially the
volumetric estimates were critically reviewed and where needed adjusted. After this,
production forecasts were updated by either simulation efforts (for the Reserves part)
or by decline curve analysis. After a critical review of the corresponding development
costs, an economical valuation. Below, a more detailed summary is given for each
field separately.
1.1 Oza
The Oza field is located in the OML-11 concession and contains oil and gasbearing
reservoirs. Four wells were drilled in the field and production from three wells took
place between 1960 and 1983. Hardy Oil and its partner Millenium Oil and Emerald
Energy Resources plan to re-develop the field in two phases. The first phase is well
under way and consists of re-starting production from the Oza-1, -2 and -4 wells,
including additional perforations of reservoirs, which are currently not producing.
After volumetric review, the available simulation models for the K7.2, L7.0 and M5.0
reservoirs were updated and forecasts were generated. Production forecasts for the
M1.0 and M2.2 reservoirs, accessed via Oza-2, have been generated with decline
curve analysis. Production is assumed to commence as of April 2010. The resulting
technical reserves (gross) for six reservoirs can be summarised by:
A quick cost review was performed prior to economical analysis. After an economic
limit test and taking Hardy Oil’s net revenue interest in the field (after royalty), the
following reserve range and corresponding value can be quoted for the first phase of
the development:
During the second phase of development for Oza, up to seven additional wells will
be drilled. This phase is however less well defined whilst budgets are not final and
depend to some extent on the results of the first phase, expected by 3Q10. The
resources, associated with this second development phase in Oza are therefore
categorised as Contingent Resources ‘Development Pending’ and are likely to be
materialised as Reserves during 2010, when additional data become available and
budgets will be finalised. Key data in this respect are production performance of the
newly perforated K7.2 and L7.0 and PVT data from M5.0 (Oza-1).
Additional contingent resources exist for Oza, but no development plan is available.
RPS Energy estimates around 1.8 MMbbl gross resources (‘Development on Hold’)
can be recovered from other oil and gas-bearing reservoirs. Further upside exists in
prospective resources (at least 0.2 MMbbl gross but unrisked) and drainage from
reservoirs extending outside the acreage held be Hardy Oil, Millenium and Emerald.
1.2 Atala
The Atala field is located in OML46 and was discovered by the Atala-1 well. After log
evaluation, several reservoirs were found to be oil and gas bearing, but no
production tests were carried out. Hardy Oil foresees future development of five
reservoirs by 2012 by two wells and one gas disposal well, after testing Atala-1
during 2010. Initially 3 oil bearing reservoirs will be developed and after 12 years
two more gas bearing reservoirs.
Resources (MMbbl)
Reservoir 1C 2C 3C
Resources (Bscf)
1C 2C 3C
Development Pending
Additional contingent resources for Atala can be found in four other Atala reservoirs,
but since, no development has been planned as yet, these resources can only be
categorised as Contingent Resources ‘Development on Hold’. RPS Energy did
independently verify the largest of these reservoirs (U6.0), see Table above.
It is envisaged that after testing and data gathering of Atala-1 and potential
adjustments to the development plan, most of these resources can move to the
‘Reserves’ category.
2. OZA
Oza is located in onshore Nigeria in the SPDC operated OML11 block in the
southwestern part of Abia State1. The Oza concession area is ~20 sq km and
contains a number of faults, providing structures for hydrocarbon accumulation. The
Oza field is contained in sands of the Agbada Formation and alternate shales
provide a seal. The underlying Akata Shale is the main source rock in the region. A
more detailed description can be found in ref. 1.
2.1.1 Database
Hardy has provided RPS Energy the following database for the Oza field:
• 3D seismic in Landmark™ project with wells, well picks and horizons K7.0, L2.6,
L7.0 and M5.0 interpreted.
• Top and base depth grids for horizons L2.2, L2.4, L2.6, L7.0, L9.0, M5.0, K7.0
and K7.2.
• Time grids for horizons K7.0, L2.6, L7.0 and M5.0.
• Fault files for each horizon.
• Deviation surveys for wells Oza-1, Oza-2, Oza-3 and Oza-4.
• Tops for each well.
• Checkshot survey for Oza-2.
1
Draft Field Development Plan Phase 1, Millenium Oil and Gas Company Ltd. September 2009
wells and decreases away from the wells. Hardy’s depth maps match the well tops
and RPS noticed that the structures are broadly similar in both the verified time-
maps and Hardy’s depth maps. RPS has therefore used these maps to calculate
GRV.
Horizons K7.2, L2.2 and L2.4 were not interpreted in the Landmark™ project: L2.2
and L2.4 are derived from interpreted horizon L2.6 and K7.2 is isopached from
interpreted horizon K7.0 by adding 82ft.
2.1.4.1 K7.2
K7.2 was not interpreted in Landmark™ and therefore the depth map is derived by
adding 82ft to the K7.0 depth map. Pay is calculated in Oza-1. No pay is calculated
by Hardy in Oza-3 and Oza-4 which are close to the main NW-SE trending fault and
down-dip from Oza-1. K7.2 has not produced or been tested.
K7.2 is a 4-way dip closure in the P90 case and a 3-way dip closure against a
NW/SE striking fault in the P50 and P10 cases (Figure 2.1). Hardy’s depth grids do
not cover the entire structure and contingent resources lie outside of the Oza
concession block. RPS has fitted a polygon around the structure to exclude western
prospective resources and contingent resources outside the concession block in the
volumetric calculations.
2.1.4.2 L2.2
L2.2 is not interpreted in the Landmark™ project and the depth map is created from
horizon L2.6. Pay is calculated in Oza-1, yet downdip wells Oza-3 and Oza-4 on the
same fault block (albeit close to the fault) have no pay. An OWC of 6176 ftTVDSS is
estimated from petrophysics carried out by Hardy. L2.2 has not produced or been
tested.
L2.2 consists of two small 4-way dip closures and a large 3-way dip structure
(Figure 2.2). The large structure to the east is not closed within the Oza concession
area.
Polygon
OWC
P90 5829 ft
P50 5831 ft
P10 5850 ft
Polygon
OWC 6176 ft
2.1.4.3 L2.4
L2.4 is not interpreted in the Landmark™ project and the depth map is created from
the L2.6 horizon. Pay is calculated in Oza-1 and none is found in downdip wells Oza-
3 and Oza-4, albeit that they are located close to the downdip fault. An OWC of 6242
ftTVDSS is estimated from petrophysics carried out by Hardy. L2.4 has not produced
or been tested.
L2.4 consists of a number of highs with dip closure and fault closure (Figure 2.3).
The structure to the east is not closed within the Oza concession area.
Polygon
OWC 6248 ft
2.1.4.4 L2.6
L2.6 is interpreted in Landmark™ and was depth converted using the checkshot
survey of Oza-2. Pay is calculated in Oza-1 and Oza-4 with 5 ft pay in Oza-3. An
OWC of 6350.7 ftTVDSS is estimated from petrophysics carried out by Hardy. L2.6
has not produced or been tested.
L2.6 consists of a 4-way dip closure with a small component of fault closure in the
western area of the fault block (Figure 2.4). A large structure near the wells contains
a number of highs and the main structure is not closed within the Oza concession
area.
Polygon
OWC 6356 ft
2.1.4.5 L7.0
L7.0 is interpreted in the Landmark™ project and depth converted using the
checkshot survey from Oza-2 and subsequently well tied. Pay is calculated for Oza-3
and Oza-4, but none for down-dip Oza-1. An OWC of 7266 ftTVDSS is estimated
from petrophysics carried out by Hardy. L7.0 has not produced or been tested.
L7.0 main structure is a 3-way dip closure along a fault (Figure 2.5). Additional
prospective resources exist to the west, but spill up-dip to the west away from the
Oza concession area.
2.1.4.6 M5.0
M5.0 is interpreted in the Landmark™ project and depth converted using the
checkshot survey from Oza-2 and subsequently well tied. The M5.0 pick in the 3D
seismic level does not tie with well Oza-2 due to the quality of the seismic at that
level. M5.0 has produced from Oza-1 and Oza-4.
Polygon
OWC 7266 ft
M5.0 is interpreted in the Landmark™ project and depth converted using the
checkshot survey from Oza-2 and subsequently well tied. The M5.0 pick in the 3D
seismic level does not tie with well Oza-2 due to the quality of the seismic at that
level. M5.0 has produced from Oza-1 and Oza-4.
M5.0 closure is fault controlled and has been split into two structural areas: the Oza-
1 area and the Oza-4 area with an E-W fault separating the two structures. The
areas have separate OWC.
The Oza-1 area has an estimated OWC of 9393 ft TVDSS from Hardy’s petrophysics
and is away from the crest of the structure. There is a 3-way dip closure at ~9320
ftTVDSS onto the southern NW-SE trending fault and the E-W trending fault
separating Oza-4 (Figure 2.6). The structure spills up to the west out of the Oza
concession area. The resulting structure is one which terminates against three
different faults and making the majority of the structure filled with hydrocarbons.
The Oza-4 area has an estimated OWC of 9328 ftTVDSS from Hardy’s petrophysics.
The area is composed of an E-W fault separating the Oza-1 area and 2 NW-SE
faults (Figure 2.7). A small WSW-ENE fault can be observed in the SE corner. The
Oza-4 structure continues to the SE beyond 3D seismic coverage.
Polygon
Oza-1 West
OWC 9393 ft
Oza-1 area
Min Polygon
Mode Polygon
OWC 9328 ft
2.2 Petrophysics
Petrophysical log evaluation on the four Oza wells was independently verified by
RPS Energy. Overall the evaluation approach was considered to be reasonable. A
number of comments can be made however:
2.3.1 K7.2
Petrophysics carried out by RPS has determined OWC P90-P50-P10 of 5820-5831-
5850 ft TVDSS. Different Sw based on the height of the oil column are considered:
above the P90 OWC, Sw is estimated at 43 %. Below the P90 OWC, Sw is
estimated at 55%
The RPS input parameters for the deterministic estimates of STOIIP are summarised
in Table 2.1. An area thickness approach is taken to estimate GRV by using Hardy’s
top and base depth maps. A polygon is used to restrain the area for volumetric
estimate calculation.
2
Four Well Basic Log Evaluation of Oza Field, Nigeria, HuntWallace report dated 9 June 2008
STOIIP (MMstb)
P90 P50 P10
K7.2
6.1 8.9 15.7
The most likely (P50) figure is substantially lower than the single STOIIP estimate for
Hardy oil of 13.8 MMstb, mainly as a result of the different contact assumptions.
2.3.2 L2.2
RPS has used Hardy’s STOIIP input parameters for calculating volumes for L2.2.
The input parameters for the stochastic estimates of STOIIP are summarised in
Table 2.3. A constant OWC of 6176 ft TVDSS is used from Hardy’s calculations. An
area thickness approach is taken to estimate GRV by using Hardy’s top and base
depth maps. A polygon is added to exclude western up-dip spills and resources
outside the Oza concession area.
The stochastic volumetric estimates of STOIIP for L2.2 are summarised in Table 2.4.
STOIIP (MMstb)
P90 P50 P10
L2.2
11.3 14.9 19.4
2.3.3 L2.4
RPS has used Hardy’s STOIIP input parameters for calculating volumes for L2.4.
The input parameters for the stochastic estimates of STOIIP are summarised in
Table 2.5. A constant OWC of 6242 ft TVDSS is used from Hardy’s calculations. An
area thickness approach is taken to estimate GRV by using Hardy’s top and base
depth maps. A polygon is added to exclude western up-dip spills.
The stochastic volumetric estimates of STOIIP for L2.4 are summarised in Table 2.6.
STOIIP (MMstb)
P90 P50 P10
L2.4
12.4 16.4 21.3
2.3.4 L2.6
RPS has used Hardy’s STOIIP input parameters for calculating volumes for L2.6.
The input parameters for the stochastic estimates of STOIIP are summarised in
Table 2.7. A constant OWC of 6356 ft TVDSS is used from Hardy’s calculations. An
area thickness approach is taken to estimate GRV by using Hardy’s top and base
depth maps. A polygon is added to exclude western up-dip spills.
The stochastic volumetric estimates of STOIIP for L2.6 are summarised in Table 2.8.
STOIIP (MMstb)
P90 P50 P10
L2.6
15.7 20.6 26.8
2.3.5 L7.0
RPS has used Hardy’s STOIIP input parameters for calculating volumes for L7.0.
The input parameters for the stochastic estimates of STOIIP are summarised in
Table 2.9. A constant OWC of 7266 fttVDSS is used from Hardy’s calculations. An
area thickness approach is taken to estimate GRV by using Hardy’s top and base
depth maps. A polygon is added to exclude western prospects.
The stochastic volumetric estimates of STOIIP for L7.0 are summarised in Table
2.10.
STOIIP (MMstb)
P90 P50 P10
L7.0
3.4 4.6 6
2.3.6 M5.0
To start with, RPS has used Hardy’s STOIIP input parameters for calculating
volumes for M5.0. A constant OWC of 9393 ft TVDSS is used for the Oza-1 and
Oza-1 West areas. However, uncertainty exists as to the GOC in the main fault
compartment, as Oza-1 had an OUT of 9367 ft TVDSS and the structure extends
substantially updip. A triangular shaped distribution of the GOC P90-P50-P10 as
9350-9275-9200 (top structure) ft TVDSS is taken into volumetric estimation of the
Oza-1 area.
The input parameters for both areas for the stochastic estimates of STOIIP are
summarised in Table 2.11. An area thickness approach is taken to estimate GRV by
using Hardy’s top and base depth maps. A polygon is added to the Oza-1 area near
the up-dip spill (see Figure 2.6) to exclude the Oza-West area, which is considered
as prospective. The Oza West area is further discussed under section 2.4.3.
GRV P90-P50-P10 for the Oza-1 area is 15.2-17.9-20.6 km3 based on area
uncertainty of 85-100-115%.
GRV P90-P50-P10 for the area west of Oza-1 is 10.2-12-13.9 km3 based on area
uncertainty of 85-100-115%.
There is only negligible uncertainty to the GOC in the Oza-4 block as Oza-4 is near
the crest of the fault block. A constant OWC of 9328 ft TVDSS is used for the Oza-4
area. Polygons are used to obtain the minimum and mode GRV followed by a
triangular shape distribution to obtain the maximum GRV.
GRV P90-P50-P10 for the Oza-4 area is 24.4-29.5-34.7 km3 based on the minimum
and mode polygons (black bounded and pink polygons respectively in Figure 2.7). A
triangular shaped distribution is derived from this to obtain the maximum GRV, which
therefore implicitly includes GRV to the SE, outside of the Oza concession block.
The stochastic volumetric estimates of STOIIP for M5.0 Oza-1 area and the area
west of Oza-1 are summarised in Table 2.12.
STOIIP (MMstb)
P90 P50 P10
M5.0 Oza-1 3.7 5.5 7.6
M5.0 West 0.7 1.4 2.5
The stochastic volumetric estimates of STOIIP for M5.0 Oza-4 area are summarised
in Table 2.13.
STOIIP (MMstb)
P90 P50 P10
M5.0 Oza-4
7.5 10.2 13.6
Hardy has calculated a single STOIIP figure of 6.5 MMstb for the Oza-1 area, which
is substantially different from the RPS figure, which assumes a uncertainty in the
GOC. For Oza-4 Hardy calculated a single STOIIP figure of 11.8 MMstb.
Hardy Oil intends to develop the Oza field in phases1. In the first phase, the existing
Oza wells are restarted and will be produced via the neighbouring Isimiri flowstation.
Since the re-development is well underway, the resources related to the restart of
the existing wells can be classified as reserves. After some months of production, a
second phase is planned, consisting of drilling additional wells in the field. The
resources associated with production of these new wells are considered as
contingent resources, since they are dependent on data gathering and production
performance of the existing wells as well as the fact that subsurface well locations
are not completely finalised.
Oza-1:
Long string: existing M5.0 reservoir.
Short string: Perforate and produce the K7.2 reservoir (Mar’10 workover)
Oza-2:
Long string: existing M2.2 reservoir
Short string: existing M1.0 reservoir
Oza-4:
Long string: existing M5.0 reservoir.
Short string: Perforate and produce the L7.0 reservoir (Dec’10 workover)
Hardy oil provided RPS Energy with a number of Eclipse models. The models
required updates for the STOIIP-ranges and more realistic well parameters (too low
bottomhole flowing pressures were found in the model: in one occasion only 1000
psia and in another occasion the default (=atmospheric) pressure). The following
main changes were applied to the models:
• Start date 1 April 2010 and 1 Jan 2011 for the L7.0
• A BHFP limit of 2000 psia
• A starting rate of 1000-1500 bopd
• An abandonment rate of 10 bbl/d (providing enough tail to determine economic
cutoff)
• Changes in reservoir pressures, to allow the use of only one PVT-table for all the
reservoirs
The models for the M5.0, K7.2 and L7.0 were used to determine a range in
remaining reserves, based on a STOIIP range as descibed in the Geology section.
For Oza-2 decline curve analysis was used to determine the remaining reserves (see
Figure 2.8) and cut-off at 10 bopd.
10
1
month 1
month 13
month 25
month 37
month 49
month 61
month 73
month 85
month 97
month 109
month 121
month 133
month 145
month 157
month 169
Figure 2.8: Oza-2 Range in Production Declines from the M2.2 and M1.0
Reservoirs
Table 2.14 summarizes all reserves estimates (cut-off at 10 bbl/d) for the six
reservoirs, being developed in the first phase of development:
Table 2.14: Reserves Summary for Six Oza Reservoirs, being developed in
the First Phase of Development
The corresponding production forecasts are listed in Enclosure 1 together with the
cost forecast.
ref. 1 also had to change because of the location of the K7.2 target. An updated
completion programme is suggested by RPS-Energy and mentioned in Table 2.15,
which also limits the number of completions/well to two.
It should be noted that the additional well in the M5.0 reservoir in the Oza-1 block
has an appraisal character, due to the uncertainty of a gascap. This may trigger an
additional well in the P10 case for this reservoir, but for valuation only one well has
been assumed. With a maximum of two strings per well, more wells are required in
the L2 reservoirs to achieve three penetrations than proposed in ref.1, leaving the
K7.2 target for one well only. For costing reasons this well has been assumed as a
workover of any wells of the wells B, C, D or F rather than a newly drilled well.
Based on a Jan’11 start-date, the following notional drilling sequence has been
assumed in Table 2.16:
Dec-10 WO Oza-4
Jan-11
Feb-11 Well C
Mar-11
Apr-11
May-11 Well D
Jun-11
Jul-11
Aug-11 Well F
Sep-11
Oct-11
Nov-11 Well E
Dec-11
Jan-12
Feb-12 Well A
Mar-12
Apr-12
May-12 Well B
Jun-12
Jul-12
Aug-12 Well G
Sep-12
Oct-12
Incremental forecasts for each of the reservoirs have been generated using
simplified Eclipse models and similar cut-off criteria were used for the new wells. The
resulting technical resources are listed in Table 2.17 and the corresponding
production forecasts are mentioned in Enclosure 2.
ECV 1538 19 January 2010
RPS Energy Oza&Atala Independent Estimate of Reserves and Resources
Note that the low case for M5.0 does not carry any reserves (unsuccessful
appraisal), but costs for the well will be included.
It is realised that the STOIIP calculations are carried out within the concession
boundary and are subsequently modelled by ECLIPSE. For some reservoirs, a larger
recovery may be expected, by draining additional reserves from STOIIP, situated
outside the concession boundary. This is in particularly true for the eastern part of
the L2 reservoirs. This upside is hard to estimate and has therefore not been taken
into account.
Although RPS Energy did not independently verify the volumetric estimates for these
reservoirs, Hardy’s estimates for these reservoirs are considered reasonable, based
on the fact that most of the other reservoirs (in the Reserves and Contingent
Resources (pending development) categories) had volumetrics in reasonable
agreement with RPS Energy’s estimates. It should also be noted that for the M1.1
reservoir only, Hardy has calculated pay3. Other references1,2 (Hunt Wallace and
Eogas, see Table 8 in ref. 1) do not show any pay in the M1.1. A payflag exists in
the M1.1 in the Oza-2 CPI in ref. 2 and RPS-Energy agrees that is indeed correct,
but not reported.
Hardy also mentions potential upside for the M2.2 reservoir, which has produced in
Oza-2. Given the limited pay column in Oza-2 and the absence of pay in Oza-3 and
3
Re-evaluation report of Oza Field, Nigeria. G&G Team. Hardy Oil (India) July 2009
Oza-4, RPS-Energy does not see any further upside for the M2.2 reservoir, other
than estimated from decline curve analysis of Oza-2 (see Table 2.14).
It is noted that a 30% ultimate recovery factor had been applied to the STOIIP
figures of the three above mentioned reservoirs. In the light of the simulation work for
the other categories and their very small oil columns in relation to their lateral extent,
this was seen as excessive. A more appropriate recovery factor of 15% has been
assumed by RPS. Only 2C resources are quoted for these ‘Contingent Resources,
Development on Hold’ and the results are quoted in Table 2.18.
Prospective resources are calculated in the M5.0 Oza West structure, west of a near
saddle. An unrisked STOIIP of 1.4 MMbbl was calculated for an area up to the
concession boundary and using the same petrophysics as the M5.0 Oza-1 block.
With a 15% recovery factor this translates in an unrisked resource of 0.2 MMbbl.
Additional prospective resources may be present in the western area on L2.4, L2.6
and L7.0, but they were considered riskier than the M5.0 due to the presence of a
spillpoint. They have therefore not been quantified any further.
Information of the costs, associated with the Oza development can be found in ref.1,
but a number of amendments have been made:
• The gas pipeline to Okoloma is only ready by 1Q11. In the meantime Hardy oil
assumed flaring in Isimiri during 2010 and believes this can be agreed with the
authorities. The costs of the pipeline from Isimiri to Okoloma will need to be borne
by the first phase development to allow post-2010 production.
• $1.5 M has been included at Isimiri for tying in the pipeline and general
rehabilitation work.
• $7.1 M has been included to purchase gas compression facilities in Isimiri in
2010 to allow gas export to Okaloma. This figure was supplied in a later mail,
dated 1 March 2010.
• Cost associated with reopening Oza-1, 2 and -4 were estimated to be $0.5 M per
well.
ECV 1538 21 January 2010
RPS Energy Oza&Atala Independent Estimate of Reserves and Resources
• Facility contingencies were increased from 10% to 20% in line with industry
norms and indirect costs were added at 25%.
• Variable Opex was taken at $3.50/bbl and a fixed Opex of $1.25 M p.a. was
assumed, only for phase 1.
• Yearly G&A costs of $1.2 M have been assumed.
The cost forecast together with the production forecasts are listed in Table 2.19 for
the phase 1 development.
RPS Energy
ECONOMIC INPUT DATA SHEET
COUNTRY: Nigeria Rev. 7
PROSPECT/FIELD: Oza US$MM
RESERVES: 3.17 MMbbls Job No. ECV 1538
DEVELOPMENT CONCEPT: Re-generation of small existing oil field 03-Mar-10
Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year
DESCRIPTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 TOTALS
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
1)
Compression at Isimiri 7.10 7.10
(no contingencies added, costs already detailed)
Fixed Field Opex 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.00 1.00 1.00 1.00 1.00 18.75
Variable Opex ($3.50/bbl) 2) 2.08 3.52 2.15 1.40 0.84 0.49 0.29 0.17 0.09 0.05 0.04 0.03 0.03 0.03 0.02 0.02 11.24
3.5
G&A 0.17 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 19.37
OPEX TOTAL 0.17 4.53 5.97 4.60 3.85 3.29 2.94 2.74 2.62 2.54 2.50 2.49 2.23 2.23 2.23 2.22 2.22 10.00 59.36
Opex/bbl 18.48
PRODUCTION
Oil-bopd 1632 2756 1679 1093 659 382 227 133 67 40 28 22 21 20 19 18 3.21
Gas-MMscfd 0.00
P50 1632 2756 1679 1093 659 382 227 133 67 40 28 22 21 20 19 18 3210.50
P10 2136 3309 2574 1727 1204 773 531 412 340 221 146 99 66 33 22 21 4968.79
P90 1426 1756 822 454 285 194 138 91 56 30 3 1918.43
Table 2.19: Cost and Production Forecast for Oza Phase 1 (Reserves Only)
Prices are assumed to increase at an annual rate of 2.0% (including after 2020), in
line with our USD inflation assumptions, shown in Table 2.21, below.
Inflation
Annual USD Price inflation rate 2.00%
Annual USD Cost inflation rate 2.00%
Deriving each partner’s share of volumes, revenue and costs, however, is more
complex than merely applying these WIs to the relevant field totals. This is due to the
ECV 1538 26 January 2010
RPS Energy Oza&Atala Independent Estimate of Reserves and Resources
different capex burdens partners have agreed to carry, and the cost recovery
mechanisms they have agreed to implement.
These arrangements are stipulated in a series of agreements (hereafter collectively
referred to as “the Agreements”), the most recent of which is a Heads of Agreement
(HOA) signed 18 December 2009 by the three JV partners and the company
Xenergi. (The HOA states that it is valid for 30 days, at which point it is to be
superseded by a more detailed agreement; as at 3 March, 2010, however, no such
new agreement had been signed, according to Hardy, which has advised to use the
terms of the HOA for economic analysis purposes).
Our economic analysis is based on our understanding – with guidance from Hardy --
of the terms stipulated in the Agreements.
Certain costs have been and are expected to be incurred up to and including the first
year of commercial production (2010). We term these costs “Upfront Costs”. They
consist of:
• USD 3.3 mm incurred by Hardy before 2009
• USD 3.5 mm incurred by Emerald before 2009
• USD $7.10 mm (in 2009 Real USD terms; or USD 7.24 mm in inflated,
money-of-the–day terms) in compression capex, to be incurred by Emerald in
2010, once first commercial production begins
• All field capex from 1 January 2009 until first commercial production begins, to
be incurred by Xenergi. We term this capex Xenergi’s “Principal”. (We assume
that Xenergi shoulders the capex already incurred, between 1 January 2009
and the HOA signing date of 18 December 2009 HOA, by way of reimbursing
the JV for this expenditure).
All other capex is to be funded by three JV partners, pro-rata to their WI’s in the Oza
license.
Xenergi is to recover its Principal (as defined above) from a share of “Net Revenue”
(as defined below). In addition, Xenergi is entitled to receive the following:
• reimbursement for USD 40,000 per month for G&A expenses it agrees to fund
before first commercial production (we assume Xenergi will fund this only
during the pre-production months – January through the end of March – of
2010)
• a Cost Surcharge equal to 10% of Xenergi’s Principal
• interest on the sum of (Xenergi’s Principal + the Cost Surcharge) at a rate
based on NIBOR. Hardy has advised us to assume an annual NIBOR rate of
10.00%, which translates into a quarterly rate of 2.41%.
• a Transaction Cost equal to 10% of Xenergi’s principal
a Production Operations Charge (POC). This is equal to 10% of Oza Gross Field
Revenue, until whichever of the following events occurs first:
a) cumulative Oza field production reaches 2 MMbbl or,
b) five years elapse from first commercial production
total Oza field “Net Revenue.” As the term is “Net Revenue” is not defined explicitly
in the Agreements, we assume, following Hardy’s guidance, that
• total Oza Field “Net Revenue” equals total field net operating cashflow, i.e.
sales revenue less all cash costs (including royalties, taxes and
miscellaneous levies) except for capex.
The following summarises our assumptions regarding the sharing of Net Revenue,
which we base on our reading of the Agreements and Hardy’s guidance.
• 30% of Net Revenue is reserved for the three JV partners’, to be allocated to
them according to their respective Working Interests.
• The remaining 70% of Net Revenue is to be made available to Xenergi for the
recovery of its Principal and other entitlements (described above) and to
Hardy and Emerald for the recovery of their respective Upfront Costs. For any
given year during which Xenergi, Hardy and / or Emerald are entitled to funds
from this 70% of Net Revenue,
o Xenergi has first call on these funds for repayment of its Principal and
other entitlements
o Any funds remaining from the 70% of Net revenue, after Xenergi has
received the sums due to it, are to be allocated
! a) 50% to Hardy and 50% to Emerald, until Hardy has recovered
its Upfront Costs, and
! b) 0% to Hardy and 100% to Emerald, until Emerald has
recovered its Upfront Costs.
o Any funds remaining from this 70% of Net Revenue, after Xenergi,
Hardy and Emerald have received the sums due to them, are added to
the 30% of Net Revenue reserved for the three JV partners, to be
allocated to them according to their respective Working Interests.
We have summarised the method of our Net Revenue allocation calculations in
Table 2.27.
The partners’ Net Revenue Interests over the economic life of the Reserves portion
of the Oza field for each case are shown on annual basis in Table 2.28, Table 2.29,
and Table 2.30 below.
Table 2.28: Oza Field – Reserves Portion – P90 Case – Partners’ Net Revenue
Interests – Annual
Table 2.29: Oza Field – Reserves Portion – P50 Case – Partners’ Net Revenue
Interests – Annual
Table 2.30: Oza Field – Reserves Portion – P10 Case – Partners’ Net Revenue
Interests – Annual
2.6.5 Oza Field – Reserves Portion – Hardy’s Net Share of Production and
Cashflow
Hardy’s Net shares of production and cashflow are shown in Table 2.31, Table 2.32
and Table 2.33. below. Hardy’s Net Production is equal to Gross (i.e. total field)
value multiplied by Hardy’s Net revenue Interest for a given year.
The same calculation holds true for all items in the cashflow tables (except for Capex
after the first year of commercial production, which is calculated as Gross field capex
multiplied by Hardy’s Working Interest – but which in the three cases examined is
equal to 0.) For reasons of space, however, the Gross cashflow items are not shown.
They can be derived by dividing the corresponding net-to-Hardy value by Hardy’s
Net Revenue Interest for the year.
Case: Oil Total Facilities Drilling Total Total Aband. Educ. Tax, PPT Total Net Disc. Factor 1 Jan. 2010
Oza
NDDC (Inc. at 10% Disc.
Reserves -- Production Revenue Capex Capex Royalties Opex Provision Costs Cashflow
&SDC Tax) Disc. Cashflow
P90
Year mm bbl USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM Rate USD MM
2009 - - - - - - - - - - -
2010 0.03 2.28 - - 0.11 0.27 0.03 0.10 0.32 0.84 1.44 0.9535 1.37
2011 0.04 3.08 - - 0.15 0.31 0.03 0.09 1.22 1.80 1.28 0.8668 1.11
2012 0.07 5.91 - - 0.30 0.90 0.10 0.18 1.83 3.31 2.60 0.7880 2.05
2013 0.04 3.93 - - 0.20 0.92 0.12 0.12 0.72 2.07 1.86 0.7164 1.33
2014 0.01 0.57 - - 0.03 0.20 0.03 0.02 0.01 0.28 0.29 0.6512 0.19
2015 0.00 0.40 - - 0.02 0.19 0.03 0.01 0.08 0.33 0.07 0.5920 0.04
2016 0.00 0.29 - - 0.01 0.19 0.03 0.01 0.03 0.27 0.02 0.5382 0.01
Total from
0.20 16.45 - - 0.82 2.98 0.35 0.54 4.20 8.89 7.56 6.10
2010
Table 2.31: Oza Field – Reserves Portion – P90 Case – Hardy’s Net Cashflow
Educ. Disc.
Case: Oil Total Facilities Drilling Total Total Aband. PPT Total Net 1 Jan. 2010
Tax, Factor
Oza
NDDC (Inc. at 10% Disc.
Reserves -- Production Revenue Capex Capex Royalties Opex Provision Costs Cashflow
&SDC Tax) Disc. Cashflow
P50
Year mm bbl USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM Rate USD MM
2009 - - - - - - - - - - -
2010 0.04 2.61 - - 0.13 0.29 0.02 0.11 0.48 1.04 1.57 0.9535 1.50
2011 0.13 10.54 - - 0.58 0.85 0.05 0.31 4.46 6.26 4.28 0.8668 3.71
2012 0.08 6.62 - - 0.33 0.65 0.05 0.20 2.63 3.86 2.76 0.7880 2.17
2013 0.08 7.10 - - 0.36 0.87 0.08 0.21 2.55 4.07 3.03 0.7164 2.17
2014 0.05 4.39 - - 0.22 0.76 0.08 0.13 1.23 2.43 1.96 0.6512 1.28
2015 0.03 2.59 - - 0.13 0.69 0.08 0.08 0.88 1.87 0.72 0.5920 0.43
2016 0.02 1.57 - - 0.08 0.66 0.08 0.05 0.39 1.25 0.32 0.5382 0.17
2017 0.01 0.94 - - 0.05 0.64 0.07 0.03 0.07 0.87 0.06 0.4893 0.03
Total from
0.43 36.35 - - 1.87 5.43 0.51 1.13 12.70 21.64 14.70 11.46
2010
Table 2.32: Oza Field – Reserves Portion – P50 Case – Hardy’s Net Cashflow
Case: Oil Total Facilities Drilling Total Total Aband. Educ. Tax, PPT Total Net Disc. Factor 1 Jan. 2010
Oza Reserves --
Production Revenue Capex Capex Royalties Opex Provision NDDC &SDC (Inc. Tax) Costs Cashflow at 10% Disc. Disc. Cashflow
P10
Year mm bbl USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM Rate USD MM
2009 - - - - - - - - - - -
2010 0.05 3.41 - - 0.19 0.33 0.02 0.13 0.86 1.53 1.88 0.9535 1.79
2011 0.18 14.79 - - 0.81 1.12 0.05 0.44 6.41 8.82 5.97 0.8668 5.18
2012 0.15 13.05 - - 0.72 1.05 0.05 0.38 5.54 7.74 5.31 0.7880 4.19
2013 0.13 11.22 - - 0.56 1.06 0.06 0.33 4.54 6.55 4.67 0.7164 3.34
2014 0.09 8.00 - - 0.40 0.92 0.06 0.24 2.99 4.61 3.39 0.6512 2.21
2015 0.06 5.25 - - 0.26 0.81 0.06 0.16 2.17 3.47 1.78 0.5920 1.05
2016 0.04 3.68 - - 0.18 0.75 0.06 0.11 1.41 2.52 1.16 0.5382 0.62
2017 0.03 2.91 - - 0.15 0.73 0.06 0.09 1.04 2.06 0.85 0.4893 0.41
2018 0.02 2.45 - - 0.12 0.72 0.06 0.08 0.81 1.79 0.66 0.4448 0.29
2019 0.02 1.62 - - 0.08 0.70 0.06 0.05 0.40 1.29 0.33 0.4044 0.13
2020 0.01 1.09 - - 0.05 0.69 0.05 0.04 0.14 0.98 0.11 0.3676 0.04
2021 0.01 0.76 - - 0.04 0.62 0.05 0.03 0.01 0.75 0.01 0.3342 0.00
Total from 2010 0.78 68.23 - - 3.57 9.51 0.62 2.08 26.33 42.11 26.12 19.27
Table 2.33: Oza Field – Reserves Portion – P10 Case – Hardy’s Net Cashflow
Net present values, as at 1 January 2010 and at various discount rates, of Hardy’s
economic interest in the Reserves portion of the Oza Field are shown in Table 2.35
below. Note that in all of our NPV calculations we assume mid-year discounting.
Oza Reserves -- Net present values (1 January 2010) to Hardy by case and discount rate, MOD USD mm
Discount Rate Oza Reserves -- P90 Oza Reserves -- P50 Oza Reserves -- P10
0.0% 7.56 14.70 26.12
5.0% 6.76 12.91 22.26
10.0% 6.10 11.46 19.27
15.0% 5.55 10.27 16.92
20.0% 5.08 9.28 15.03
25.0% 4.68 8.45 13.48
30.0% 4.33 7.74 12.20
35.0% 4.03 7.14 11.12
40.0% 3.76 6.62 10.20
45.0% 3.53 6.16 9.42
50.0% 3.32 5.76 8.74
Table 2.35: Oza Field – Reserves portion – NPV Net to Hardy at various
Discount Rates
3. ATALA
The Atala field, located in onshore Nigeria’s OML 46 concession, was discovered in
1982 . The Atala field now forms part of a 34 km2 farm-out area, which were awarded
to Bayelsa Oil Company Ltd and its joint venture partner Hardy Oil Nigeria. The
Atala-1 discovery well encountered a number of oil and gas reservoirs and was
logged but not tested. The reservoirs are contained between a number of near-
parallel faults. The fault block has a dipping component for the trapping of
hydrocarbons.
The Field Development Plan for Atala4 mentions the development of five of the
encountered reservoirs: U1, U2, U3, U4 and U7. This report will evaluate
economically the contingent resources of these reservoirs only.
3.1.1 Database
Hardy Oil has provided RPS Energy with the following geological and geophyiscal
data:
It is noted that the deviation survey in the Petrel project is different from the deviation
survey in the data package or the inferred deviations from the FDP-report4.
4
Field Development Plan for Atala Field by Eogas, March 2008
3.1.4.1 U1 Reservoir
Minor reinterpretation in the north of the structure was carried out to conform to the
seismic data: The original seismic interpretation shows the horizon pick steepening
up against the fault by not acknowledging the seismic data which creates additional
volumes.
U1 is a four-way dip closure bounded to the north and south by two NW-SE trending
faults. The OWC at 6985 ft TVDSS rests against the southern fault and the GOC at
6930 ft TVDSS forms a four-way closure (Figure 3.1). Note that no GOC was seen
in Atala-1 and that the mid case GOC is based on the mid-point between the crest of
the structure and the OUT in Atala-1 (see page 24 of ref. 4). Also note that the re-
interpreted crest of the structure is lower than the one mentioned and that this will
negatively affect the GOC and STOIIP. In view of the large uncertainties, already
present, the GOC in the FDP has been maintained.
GOC
OWC
3.1.4.2 U2 Reservoir
A full reinterpretation for U2 was carried out by RPS Energy and the resulting top
structure map is included as Figure 3.2.
The U2 horizon shows a three-way dip closure resting on the northern NW-SE
trending fault. The GOC is estimated at 8147 ft TVDSS and an OWC at 8219 ft
TVDSS. ). Note that no GOC was seen in Atala-1 and that the mid case GOC is
based on the mid-point between the crest of the structure and the OUT in Atala-1.
Note that the re-interpreted crest of the structure is lower than the one mentioned
and that this will negatively affect the GOC and STOIIP. In view of the large
uncertainties, already present, the GOC in the FDP has been maintained.
GOC
OWC
3.1.4.3 U3 Reservoir
A full interpretation was carried out for U3 as no interpretation was provided. The
resulting top structure map is shown in Figure 3.3.
The U3 accumulation shows a four-way dip closure at the 8400 ft TVDSS GOC
contact and a gas trap against the northern fault. The OWC at 8416 ft TVDSS
surrounds the main gas pool and spills out against the northern fault.
3.1.4.4 U4 Reservoir
No reinterpretation of U4 was carried out and the Eogas interpretation was
considered reliable. U4 is a three-way dip closure against the northern NW-SE fault
and contains two structural highs (Figure 3.4). The GOC is taken at 8693 ft TVDSS
from petrophysical evidence and the OWC at 8762 ft TVDSS.
GOC
OWC
GOC
OWC
3.1.4.5 U7 Reservoir
A full reinterpretation of U7 was carried out leading to a different structure map (see
Figure 3.5).
The U7 accumulation shows a pool against the northern fault with some minor
intersecting faults. Closure in the south-east is uncertain due to the limit of the 3D
survey. A GOC at 10745 ft TVDSS and a OWC at 10753 ft TVDSS have been
assumed from petrophysical evidence in Atala-1.
GOC
OWC
3.2 Petrophysics
The petrophysical log evaluation of Atala-1 was independently verified. The Atala-1
well had a full suite of modern logs and therefore the petrophysical uncertainty is
expected to be lower than the old Oza wells. However, pertinent log data below U5.5
was not supplied for this work. and could therefore not been verified. The Eogas
assessment5 mentions net pay sands of 180, 77 and 152 ft for the U6.0, U6.5 and
U7.0 respectively.
A Vshale cut off value of 30% is mentioned for Atala-15. This seems inappropriate,
since most reservoirs would turn out to be non-pay. It is suspected that a much
higher or no Vshale cut-off was used to determine average properties.
5
Petrophysical Evaluation of the Atala-1 well. Ankorpointe report, 2008.
The saturation calculations were based on m=n=2. Pickett plot evidence and
regional evidence suggest a lower m and n (1.8). This could lower water saturations.
The reported water saturations appear reasonable however.
It is noted that the tops and contacts, reported in Table 2 of ref. 5 are different from
the ones, mentioned in ref. 4 (Table 3). It is assumed that the data in ref. 4 are
correct, since they were used for further development planning work. Note however
that the FDP tops also differ with the Petrel project, but this has been rectified by
depth shifting to the tops, mentioned in ref. 4 (see section 3.1.3).
RPS has used Eogas’ input parameters for calculating volumes deterministically.
Although valuation will been done on a range of reserves it was decided to use a
relatively wide range on recovery factor only, whilst using a single volumetric
estimate. With contacts, obtained from ref. 4, separate estimates for GIIP and
STOIIP were made.
3.3.1 U1 Reservoir
Input parameters for volumetric estimates are summarised in Table 3.1.
The total GRV is 9.6 km3 split up over a gas cap (0.27 km3) and oil rim (9.33 km3).
The deterministic volumetric estimates of GIIP and STOIIP are summarised in Table
3.2.
GIIP STOIIP
U1 (bcf) (MMstb)
0.3 5.1
For comparison, Eogas has calculated a GIIP of 4.3 Bscf and a STOIIP of 8.4
MMbbls for the U1 reservoir.
3.3.2 U2 Reservoir
Input parameters for volumetric estimates are summarised in Table 3.3.
The total GRV is 20.2 km3 split up over a gas cap (1.96 km3) and the oil rim (18.24
km3).
The deterministic estimates of GIIP and STOIIP are summarised in Table 3.4.
GIIP STOIIP
U2 (bcf) (MMstb)
1.8 6.8
For comparison, Eogas has calculated a GIIP of 2.5 Bscf and a STOIIP of 5.6
MMbbls for the U2 reservoir.
3.3.3 U3 Reservoir
Input parameters for volumetric estimates are summarised in Table 3.5.
The total GRV is 9.42 km3 split up over a gas cap (4.87 km3) and the oil rim (4.55
km3).
The deterministic volumetric estimates of GIIP and STOIIP are summarised in Table
3.6.
For comparison, Eogas has calculated a GIIP of 19.6 Bscf and a STOIIP of 2.9
MMbbls for the U3 reservoir.
GIIP STOIIP
U3 (bcf) (MMstb)
5.4 2.3
3.3.4 U4 Reservoir
Input parameters for volumetric estimates are summarised in Table 3.7.
The total GRV is 14.5 km3 split up over a gas cap (1.15 km3) and the oil rim (13.35
km3).
Contact N/G Porosity Sw FVF
Unit ft TVDSS % % % scf/cf or rb/stb
Gas 8693 15 227.2
75 26.6
Oil 8762 21.9 1.66
The deterministic volumetric estimates of GIIP and STOIIP are summarised in Table
3.8.
GIIP STOIIP
U4 (bcf) (MMstb)
1.6 7.9
For comparison, Eogas has calculated a GIIP of 3.6 Bscf and a STOIIP of 10.8
MMbbls for the U4 reservoir.
3.3.5 U7 Reservoir
Input parameters for volumetric estimates are summarised in Table 3.9.
The total GRV is 118 km3 split up over a gas cap (112 km3) and the oil rim (6 km3).
The deterministic volumetric estimates of GIIP and STOIIP are summarised in Table
3.10.
GIIP STOIIP
U7 (bcf) (MMstb)
123 1.6
For comparison, Eogas has calculated a GIIP of 117 Bscf and a STOIIP of 2 MMbbls
for the U7 reservoir.
3.4.1 Methodology
A full simulation model was built for the reservoirs, proposed for development in
Atala.
For valuation purposes, development scenario A2 was selected, which avoids re-
using the 25 year old Atala-1 well. The A2 scenario consists of the following
ingredients:
Atala-1 was not production tested, but ref. 4 mentions a number of reasonable
assumptions for initial rate and fluid properties to be used. Other forecast
assumptions for the A2 scenario as listed in ref. 4, were considered reasonable if not
a bit too harsh (cut-off at BSW of 65%).
The simulation work from ref. 4 indicated an average recovery factors for the
developed reservoirs of 23.9%, which is considered reasonable for this type of drive
mechanism. No STOIIP variation was supplied in ref. 4 and it was decided therefore
to vary only the recovery factor to obtain a range in resource estimates. Note that the
range in resource estimates in Table 10 of ref. 4 was considered too narrow. For the
low and high cases, recovery factors of 15% and 35% have been assumed and the
forecasts have been adjusted accordingly by assuming a faster and slower decline
from the initial rate.
In this way the following resource distribution was obtained (see Table 3.11) for the
Contigent Resources, planned for Development:
Resources (MMbbl)
Reservoir 1C 2C 3C
The corresponding oil forecasts are shown in Figure 3.6. Note the timings of zone
changes.
The results for the gas recoveries, as mentioned in the FDP4, were not considered
reliable:
• The U3 reservoir had a total GIIP in the FDP of 22.32 Bscf (19.58 Bscf in the gas
cap and 2.74 Bscf as associated gas). A reported gas recovery of 20.77 Bscf or
93% seems excessive.
• The U7 reservoir holds a gas cap GIIP of 117 Bscf in the FDP which is more or
less confirmed by RPS, but the FDP only recovers 22.2 Bscf or 18%. This seems
excessively low even for one well.
RPS has reviewed the gas resources for Atala by applying the following recovery
factor range on the GIIP’s, determined by RPS (see Table 3.12):
6000
5000
Average yearly Oil Production (bopd)
4000
3000
2000
3C forecast
2C forecast
1C forecast
1000
0
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Reservoir
U3 U7 Total
Gas production forecasts were generated starting mid 2023, reducing the initial gas
production for U3, but increasing the plateau rate for U7 to 15 MMscf/d to
accommodate the increased resources. Due to the increased resources, the duration
of the 2C and 3C forecasts was extended as well. The corresponding forecasts are
shown in Figure 3.7.
20
Average Gas Production Rate (MMscf/d)
15
10
0
2020 2025 2030 2035 2040 2045 2050
Additional contingent resources in Atala were found in the U5.0, U5.5, U6.0 and U6.5
reservoirs. No development plan exists for these reservoirs, so they are contained in
a lower class of contingent resources: ‘Development on Hold’. Table 8 in ref. 4
mentions notional GIIP’s and STOIIP’s, calculated by Eogas for these Resources.
No seismic interpretation is available for these reservoirs, but RPS-Energy did carry
out an interpretation of the largest of these reservoirs, U6.0 (see Figure 3.8) . Based
on a GDT of 11163 ft TVDSS in Atala-1, a GIIP of 191 Bscf was calculated, which is
21% lower than the 240 Bscf GIIP, quoted for U6.0 in ref. 4. Using the same
recovery factor of 78.5%, RPS-Energy arrives at a resource volume of 150 Bscf for
the U6.0 reservoir. It should be realised that the 191 Bscf represents a 1C figure
rather than a 2C, due to the conservative assumptions of a GDT and minumum 31.7
m pay in Atala-1.
The other reservoirs (U5.0, U5.5 and U6.5) have much smaller GIIP’s and were no
further verified by RPS Energy. It should be noted that no clear barrier exists
between the U6.5 and U7.0 reservoirs and is believed that the 27 Bscf Resources in
the U6.5 can probably be drained with U7.0 development wells.