Niadar – A Rotliegendes opportunity – missed?

May 2016

Niadar

May 2016 Page 1North Sea Equity Showcase

Licence details (Block 49/19b)

Block: 49/19b

Licence: P.1914 awarded in 26th Round, 4 year termEffective date: 01/02/12, extended to end Dec 2017

Equity: SR (100%)

Reservoir: Permian

Facies: Rotliegendes aeolian sandstone

Licence: Firm Commitment: Reprocess 300km2 of 3D seismic data to PSDM (completed) & drill a well on Niadar to 2900m to the Leman Sandstone

Niadar

May 2016 Page 2North Sea Equity Showcase

Quad 48 & 49 Fields and Infrastructure

Niadar

May 2016 Page 3North Sea Equity Showcase

Overview – Sterling Plans

• 3D seismic reprocessing of prospect completed in 2013

• Well planning

– Bottom hole location identified

• On exploration success seek expedient route to development

– Feasibility study on development scenarios via nearby infra-structure

completed

– Positive economics based on current price deck

Niadar

May 2016 Page 4North Sea Equity Showcase

Regional Top Leman Sandstone (Depth), Prospect, Leads and Fields

Niadar

Brigantine

Depth (ft)

Niadar

May 2016 Page 5North Sea Equity Showcase

Regional Seismic Line

Top Chalk

Top

Leman

BCU

Top

Zechstein

Brigantine D

NiaNiadar

Tertiary

Chalk

Lead 2

Lead 6

Triassic

Zechstein

L.Cret.

Carboniferous

Leman Sst..

W E

Depth (ft)

4 km

49/18-5

Niadar

May 2016 Page 6North Sea Equity Showcase

Niadar Top Leman Sandstone (Depth)

CI 200 ft

Minimum contact 9100 ft ?

Brigantine D

Brigantine C

BR Platform

R1

R2

R3

Niadar Prospect

Niadar

May 2016 Page 7North Sea Equity Showcase

Niadar Prospect Illustration – X-Line 2745

R3

Top Leman Penetration

9197 ft TVDss

Niadar Prospect Top Zechstein

Top Leman

Base Permian

1 km

8800 ft

9000 ft

Tie Line Intersection

Dep

th (

ft)

PreSDM Depth Volume

SW NE

Niadar

May 2016 Page 8North Sea Equity Showcase

Tie Line to Illustrate the Leman Pick in the Upthrown Block

Intersection with X-line 2745

Imaging problems

(over-migration)

Top Zechstein

Top Leman

Base Permian

Dep

th (

ft)

1 kmPreSDM Depth Volume

NW SW

Niadar

May 2016 Page 9North Sea Equity Showcase

49/13-2X

49/14a-2

49/18-249/18-5z

49/19-1

49/19-3

49/19-5

49/19-6Y

49/19-749/19-R1

49/19-R2

49/19-R3 (UT)

7500

8000

8500

9000

9500

10000

7500 8000 8500 9000 9500 10000

Wel

l Dep

th (

ft)

TVD

ss

PSDM Depth (ft) TVDss

PSDM vs Actual Top Leman Sandstone Depth

PSDM Top Rotliegend Depth Prediction Error at Wells

374 ft

Top Leman

Depth TVDss

Grid : Top Leman Depth PSDM Rev4

Well Grid depth (ft) Well depth (TVDss ft) Difference

49/13-2X 9946 9913 -33

49/14a-2 9476 9737 261

49/18-2 8706 8750 44

49/18-5z 8880 8805 -75

49/19-1 7919 7926 7

49/19-3 7850 7832 -18

49/19-5 8098 7989 -109

49/19-6 7513 7417 -96

49/19-6Y 8216 8211 -5

49/19-7 7839 7987 148

49/19-G1 7465 7402 -63

49/19-G2 7315 7297 -18

49/19-R1 7766 7936 170

49/19-R2 8413 8326 -87

49/19-R3 (DT) 9267 9193 -74

49/19-R3 (UT) 8819 9193 374

Exc. R3 (UT) Average 3

Standard Deviation 109

Niadar

May 2016 Page 10North Sea Equity Showcase

Multi Layer Depth Conversion Workflow

• The following interpreted layers were used in the depth conversion

1. MSL to Seabed

2. Seabed to Base Tertiary

3. Base Tertiary to Base Chalk

4. Base Chalk to Top Zechstein

5. Top Zechstein to Base Zechstein

– In some realisations, the Zechstein was further divided into a hard layer (anhydrite, dolomite) and soft layer (salts). In this case, the hard-rock thickness was estimated by kriging thicknesses encountered in the wells.

• Work was undertaken by Earthworks using HIIP software

• Well data from R3 not provided or included

Niadar

May 2016 Page 11North Sea Equity Showcase

Impact on Niadar Area – Depth X-Section (Xline 2745)

Depth

TVDss (ft)

Uncorrected PreSDM (depth)

Corrected PreSDM (depth)

Earthworks Best Technical (not tied to R3)

Alternative Earthworks Outcomes (not tied to R3)

Niadar Prospect

R3

(orthogonal to

trajectory)

Top Leman Penetration

9197 ft TVDss

Niadar

May 2016 Page 12North Sea Equity Showcase

Depth Conversion Summary

• All depth conversion methods suggest that the R3 Top

Rotliegendes is more likely to have penetrated the

downthrown side of the fault

• The multi-layer depth conversion methods are generally

predicting shallower depths than the PreSDM depth

volume, in the Niadar area

Niadar

May 2016 Page 13North Sea Equity Showcase

Niadar Petrel Modelling

R3

Brigantine development Niadar BTC Depth Structure Map

Niadar

May 2016 Page 14North Sea Equity Showcase

Niadar Volumetrics (variable contact)

MinimumCrest 8375ft ss

GWC 9100ft ss

Avg Phi 15%

Avg Sw 35%

FVF 240

IGIP 61bcf

BTCCrest 8375ft ss

GWC 9250ft ss

Avg Phi 15%

Avg Sw 25%

FVF 240

IGIP 109bcf

MaxCrest 8375ft ss

GWC 9600ft ss

Avg Phi 15%

Avg Sw 15%

FVF 240

IGIP 227bcf

Niadar

May 2016 Page 15North Sea Equity Showcase

Niadar well planning and costs

Niadar Cost Summary Dry Hole Success Total

(£mm) 8.7 (5.3) 5.14 13.8

($50,000 rig rate)