How fast can a falcon fly?

DEVEX

9th May 2012

Peter Brand

• Overview

• Timeline

• Appraisal

• Development

• Performance

• Potential

• Summary / Conclusions

Overview

Overview - Location

Shetland

Islands

Tern

Kestrel

Falcon

Overview

Overview – ‘Tern North’

1995 1996 1997 1998 2000 Shell/Esso discovered Falcon with 210/25a-9 exploration well

Timeline

1979 Shell/Esso licensed the area (P296)

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1999

2001 2002 2003 2004 2005 2006 2007 2008 TAQA bought the Tern field

•TAQA bought

the area

containing

Falcon

•Drill 210/25a-10

(explore ‘H’ block)

•Complete

project

•First oil •Drill 210/25a-10Z

(appraise Falcon)

•Run

completion

•Commence

subsea

development

• Fallow acreage initiative?

• Field redetermination on economic grounds

– Possible to carve-out from the Tern PRT area

– IF Falcon had proved connected to Tern

• Small Fields Allowance

Timeline – Regulatory Enablers

• Seismic section

• Well logs

• RFTs

• Faulting

• Appraisal plan

• Results

Appraisal

Appraisal - Seismic section

Kimmeridge Clay

Heather

Base Mid Ness Shale

Cormorant 1

Paleosol

Basement

G Block H Block I Block Falcon

Abercromby

Tern Main

Field

NE SW

Appraisal – Well Logs

TA05S1

ODT

8105 ft

TVDSS

210/25a-9

OWC

8500 ft

TVDSS

Plotted in TVD and hung on Base Mid-Ness Shale for thickness comparison

Upper

Ness

Lower

Ness

/Etive

Appraisal - RFT data

25a-10z May10

Simulation model

provides reasonably

good match to depletion

data

Solid = measured

Open = simulated

E1 Dec97

P2 Jul01

TA05S1 Jan94

25a-9 May00 Pinit

Appraisal - Tern and Tern North faulting

F G H

I

Main Tern Field

IOWC 8258’

Internal faults can seal up to

1200psi ΔP on production

Initial oil fill - Partially sealing fault compartments

filled down past their individual spill points – fill and spill

Partial sealing becomes evident during production

Tern initial seal requirement is 120psi

(1450’column, ΔP oil/water 0.08pis/ft)

Tern North

220’ column - seal requirement 18psi

G Block

IOWC

8117’

Falcon

IOWC 8500’

F-G and I-Falcon are major sealing faults,

with Brent/Brent but no ‘good res’ connection

G-H and H-I faults are lesser faults, with minor

‘good res’ juxtaposition towards their crests

Juxtaposition caused by anticlinal flexure

towards fault block crests

8120’

8500’

8258’

• Updip targets from old well with indications of

oil in Upper Ness

– First branch to H block, upside location

– Second branch to NE of old well, with higher

CoS, planned as keeper

• Fast Track ‘Appraise while developing’

• Avoids winter working

• Fast track procurement, based on delivery

• Significant pre-sanction commitments

• Approval cycle discussed with DECC

Environmental

• Deliveries discussed with key suppliers

Appraisal - Plan

• H-block well wet

• Falcon N well

– (210/25a-10Z)

– 23’ shallow to prognosis

– 20’ more net reservoir

– Slightly higher porosity

• so higher permeability

– 5’ deeper OWC

Appraisal - Results

Falcon S Falcon N

Plotted in TVD and hung on Base Mid-Ness Shale for thickness comparison

• Modelling

• Schematic

• Development plan

• Lessons

Development

• New seismic interpretation

• 2 new wells

• Structurally quite complex – 79 faults

• Property modelling relatively simple

• 100m x 100m x 20 layers for simulation

• Primary purpose: Falcon development plan

• Secondary purposes: Kestrel and G-block development planning

Development - Modelling

Falcon South

Falcon North

Development - Modelling

• Oil in place: Falcon South 13 mmbbl Falcon North 18 mmbbl

Kestrel

G BlockFalcon

H I

Kestrel

G BlockFalcon

H I

Preliminary initialization

of new reservoir model

(oil saturation)

North

Tern Main ‘L’

Development - Schematic

• Also considered:

– Tie-in at Kestrel SSIV (near Tern)

– New riser at Tern

• Approvals schedule not under TAQA control

• Kestrel back-out estimation

• Cost growth due to high industry activity

• Schedule

– Drill rig availability for 2011 completion

– Tight schedule to first oil date (tree, controls, pipe, umbilical)

• Operability/Integrity

– Limitations of existing subsea umbilical for deploying chemicals for flow assurance

– Operability/integrity risks on existing Kestrel infrastructure, which had been in use

since 2001

• Additional risks

– Uncertainties on the initial flow rate and recoverable reserves

• After thorough analysis the cheapest route, via Kestrel, was selected

Development - Key project risks, May 2010

Development - Plan

• Approach

• Keep it simple

• Minimise impact on platform

• Minimise CAPEX

• Scope

• Complete well and run subsea xmas tree

• Install new production and gas lift pipelines and an umbilical

• Scope growth in platform modifications

• Late addition of Kestrel flexible riser replacement

• Obsolescence of Kestrel controls infrastructure identified late

• Subsea construction/installation required extra TAQA support

• Start-up was delayed by incomplete instrumentation commissioning

• Entire Appraisal-Development project under budget

• First oil < 1 month late compared to stretch target

Development - Lessons

• Oil rate

• Water cut

• History match: pressure

Performance and forecasts

• Has exceeded expectations so far

Performance – oil rate

oil rate

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

May

-12

Nov

-12

May

-13

Nov

-13

May

-14

Nov

-14

May

-15

Nov

-15

May

-16

Nov

-16

May

-17

Nov

-17

bo

pd

'Low' case

'Base' case

'High' case

Actual

New forecast

• Is similar to predictions

Performance – water cut

water cut

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

'Low' case

'Base' case

'High' case

Actual

New Forecast

• Matched with additional aquifer strength and internal reservoir connectivity

Performance - pressure

Well Falcon North Bottom Hole Pressures

0

500

1000

1500

2000

2500

3000

3500

Jul-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

Pre

ss

ure

(p

sia

)

Model

Actual

• Plan: Drill Abercromby prospect (next fault block north)

– Risk 1 – fault seal

– Risk 2 – migration

• Option: Drill Falcon 2nd producer and/or injector

– Depending on performance

– Maintaining history matched model

Potential

• Operability/integrity risks on existing Kestrel infrastructure,

which has been in use since 2001

• Uncertainties on the initial flow rate and recoverable reserves

Summary / Conclusions

• First oil schedule met (almost). On budget

• On reflection the schedule was very aggressive in a busy market

• This timeline would not be achievable today (longer regulatory timeframes,

even tighter services markets)

• Better than expected performance (better reservoir)

• Encouraged to explore further

• Considering further development

• Key project risks: – Approvals schedule not under TAQA control

– Kestrel back-out estimation

– Cost growth due to high industry activity

– Schedule • Drill rig availability for 2011 completion

• Tight schedule to first oil date (tree, controls, pipe, umbilical)

– Operability/Integrity • Limitations of existing subsea umbilical for deploying chemicals for flow assurance

• Operability/integrity risks on existing Kestrel infrastructure,

which has been in use since 2001

– Additional risks • Uncertainties on the initial flow rate and recoverable reserves

• TAQA Bratani Ltd

• TAQA - project team

• ADIL - development planning support

• DECC - fast turnaround of approvals

Acknowledgements

Bill Buchanan/USFWS

Finally, by the way

• How fast can a Falcon fly?

– RSPB: 60 mph (level flight)

– BBC: >180 mph (diving)

– National Geographic: 242 mph (diving)

– TAQA: acquisition to first oil in 22 months

Performance – Pressure Build-up Analysis

• Kh : 36000 mDft

• K : 148 mD

• Pwsi : 2970 psia (July 2011)

• Rectangle with const. Pressure Boundary

• Rectangle Size: 2220 x 7620 ft

• Rectangle Pore volume 170 MMbbl

Well Location

Const Pressure

(Kestrel)