sorochynska reserves report (sor-201 b-18 reservoir) · pdf filesorochynska reserves report...

Sorochynska Reserves Report

(Sor-201 B-18 reservoir)

for Hawkley Oil & Gas

B-18 am plitude m ap Sorochynska block

Peter Chandler, Liam Finch, Anuar I shniyazov, Roger Jenner, Ole Krogh Jensen, Ksenia Shm yglia, Bjørn

Sm idt -Olsen

26 th Septem ber 2013

TRACS Reser v es St at em en t on Sor ochy n sk a asset s f or Haw k ley Oi l & Gas

AGR TRACS I nternat ional Ltd September 2013

This report was prepared in accordance with standard geological and engineering methods generally accepted by the oil and gas indust ry, in part icular the 2007 SPE PRMS. Est imates of hydrocarbon reserves and resources should be regarded only as est im ates that m ay change as further product ion history and addit ional inform at ion becom e available. Not only are reserves and resource est im ates based on the informat ion current ly available, these are also subject to uncertaint ies inherent in the applicat ion of judgemental factors in interpret ing such inform at ion. AGR TRACS I nternat ional Consultancy Ltd shall have no liabilit y ar ising out of or related to the use of the report .

A com prehensive glossary of technical term s, units, and abbreviat ions com m only used is included at the back of the report .

Status Approved

Revision 1

Date 2 6 t h Sept . 2 0 1 3

I ssued by

Peter Chandler

Liam Finch

Anuar I shnyazov

Roger Jenner

Ole Krogh Jensen

Ksenia Shm yglia

Bjørn Sm idt - Olsen

Approved by Nigel Blot t

TRACS Reser v es Repor t on Sor ochy nsk a asset s f or Haw k ley Oi l & Gas

AGR TRACS I nternat ional Ltd September 2013 i

SOROCHYNSKA Reserves Repor t for HAW KLEY OI L & GAS

Contents

Figures ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Tables .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Cover Let ter .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v ii

Disclaim er .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .x i

Execut ive Summary .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x iii

1. I nt roduct ion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. I n-Place Volum e Stat ic Model .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2.1. Seism ic data available .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2.2. Past Drilling .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.3. Sorochynska St ructural Mapping ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.3.1. Sorochynska B-18 Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.3.2. Sorochynska B-19 Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

2.3.3. Sorochynska B-24 Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

2.3.4. Sorochynska Upside Potent ial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

2.4. Pet rophysics Review ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

2.4.1. Data Available .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

2.4.2. Data Quality .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

2.4.3. Evaluat ion Procedure ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

2.4.4. Net Pay I ntervals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

2.5. Sorochynska B-18 Pet rel Model .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

2.5.1. Pet rel Database ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2.5.2. Well correlat ion ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

2.5.3. St ructure Model .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

2.5.4. Gas-Water Contacts .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

2.5.5. Property m odelling .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

2.6. I n-Place Volum et r ic Est im ates ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

2.6.1. B-18 Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

2.6.2. B-19 Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

2.6.3. B-24 Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

3. Sorochynska Reservoir Engineering Review ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

3.1.1. Sorochynska gas format ion volum e factors .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

3.1.2. Product ion history and forecast for the B-18 reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55


AGR TRACS I nternat ional Ltd September 2013 ii

3.2. Well 469 perform ance analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

3.3. Well 110 perform ance analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

3.4. Well Sor-201 perform ance analysis and forecast .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

3.4.1. Well 201 pressure t ransient analyses ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

3.4.2. Well Sor-201 product ion data analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

3.4.3. Well Sor-201 product ion forecasts .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

3.4.4. P/ z data analysis of B-18 Upper reservoir in the area of wells 110 and Sor-201 70

4. Econom ic Evaluat ions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

4.1. Ukrainian fiscal term s ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

4.2. Cost assum pt ions for Sor-201 evaluat ions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

4.3. Gas and condensate prices .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

4.4. TRACS econom ic evaluat ions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

5. Reserves Est im ate .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

5.1. Sor-201 B-18 Upper reservoir East block .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

5.2. B-19 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

5.3. Reconciliat ion with 2012 Reserves Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

5.3.1. I n-place volum es (GI I P) – com parison Moyes vs. TRACS ... . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

5.3.2. Reserves as per Moyes report 1.1.2012 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

5.4. Reconciliat ion between Moyes (2012) and TRACS (2013) Reserve Est im ates ... . . . . . . 81

6. Conclusions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

7. References ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

8. APPENDIX 1 - Pet roleum Resources Classificat ion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

9. APPENDIX 2 - Glossary .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88


AGR TRACS I nternat ional Ltd September 2013 iii

Figures

Figure 1.1: Locat ion m ap of Sorochynska Licence within Dnieper-Donets Basin, Ukraine ... . . 1

Figure 1.2: Sorochynska well locat ions and nearby fields .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Figure 1.3: St rat igraphic colum n Sorochynska area with key targets highlighted ... . . . . . . . . . . . . 3

Figure 2.1: Sorochynska Base Map ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Figure 2.2: Random seism ic line showing well t ies .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Figure 2.3: Seism ic line ( I nline 320) illust rat ing pinchout .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Figure 2.4: Top B-18 TWT m ap showing pinchout edge ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Figure 2.5: B-18 Amplitude map showing volumet r ic polygons ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Figure 2.6: Surface to Top B-18 velocity funct ion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Figure 2.7: Surface to Base B-18 velocity funct ion ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Figure 2.8: B-18 Upper depth st ructure m ap ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Figure 2.9: B-18 Lower Base depth st ructure map ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Figure 2.10: B-19 Lower Base TWT m ap ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figure 2.11: Top B-19 Upper to Base B-19 Lower Minim um amplitude ... . . . . . . . . . . . . . . . . . . . . . . . . 15

Figure 2.12: Surface to B-19 Lower base velocity funct ion. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Figure 2.13: B-19 Lower base depth m ap ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Figure 2.14: B-19 Upper depth map ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Figure 2.15: Line 390 through Sorochynska-110 well . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Figure 2.16: Pay zones in the B-24 reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Figure 2.17: B-24 Upper zone RMS amplitude ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Figure 2.18: B-24 Lower zone RMS amplitude ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Figure 2.19: Base B-19 to Top B-24 velocity funct ion ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Figure 2.20: Top B-24 Depth m ap t ied to wells .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Figure 2.21: Wells used in Pet rel model of B-18 unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Figure 2.22: Sorochynska well correlat ion through Sor-110 and Sor-201 ... . . . . . . . . . . . . . . . . . . . . . 37

Figure 2.23: Grid skeleton from Sorochynska B-18 Pet rel model .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Figure 2.24: Sorochynska Top B-18 Upper reservoir depth m ap used in Pet rel m odel .. . . . . . 39

Figure 2.25: Sorochynska Top B-18 Lower reservoir depth m ap used in Pet rel m odel .. . . . . . 40

Figure 2.26: East area - cross-sect ions illust rat ing Low/ Mid and High case contacts ... . . . . . . 42

Figure 2.27: Cent ral and West areas - cross-sect ions illust rat ing contacts .. . . . . . . . . . . . . . . . . . . . . 43

Figure 2.28: Sorochynska B-18 unit - up-scaled and pet rophysical analysis logs ... . . . . . . . . . . . 44

Figure 2.29: Sorochynska B-18 interval seism ic m in amplitude m ap ... . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Figure 2.30: B-18 facies dist r ibut ion through Sor-202, Sor-201 and Sor-110 ... . . . . . . . . . . . . . . . 47

Figure 2.31: Sorochynska B-18 – N/ G sect ion through Sor-202, Sor-201 and Sor-110 .... . 48


AGR TRACS I nternat ional Ltd September 2013 iv

Figure 2.32: Cross-sect ion through Sor-202, Sor-201 and Sor-110 illust rat ing effect ive porosity (PHI E) dist r ibut ion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Figure 2.33: Sorochynska B-18 – effect ive porosity histogram ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Figure 3.1: Pressure and temperature for Sorochynska ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Figure 3.2: Sorochynska - product ion history for well 469 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Figure 3.3: Sorochynska - CGR and GOR from well 469 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Figure 3.4: Sorochynska well 469 - gas rate vs. cumulat ive gas product ion (Gp) . . . . . . . . . . . . . 58

Figure 3.5: Sorochynska - p/ z plot for well 469 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Figure 3.6: Sorochynska - product ion history for well 110 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Figure 3.7: Sorochynska well 110 - gas rate vs. cumulat ive gas product ion (Gp) . . . . . . . . . . . . . 60

Figure 3.8: Sorochynska - CGR and GOR from well 110 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Figure 3.9: Sorochynska - p/ z plot for well 110 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Figure 3.10: Well Sor-201 - pressure derivat ive plot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Figure 3.11: Schem at ic of Sorochynska B-18 reservoir (wells 110 & Sor-201 region) ... . . . . 62

Figure 3.12: Well Sor-201 – B-18 reservoir product ion history to 30 th June 2013 ... . . . . . . . . . . 63

Figure 3.13: Well Sor-201 - m easured WHP and est imated BHP ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Figure 3.14: Well Sor-201 NFA forecasts (gas rate vs. cum. gas product ion) .. . . . . . . . . . . . . . . . . . 65

Figure 3.15: Well Sor-201 NFA forecasts (gas rate vs. t im e) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Figure 3.16: Well Sor-201 – inflow-out flow relat ionship .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Figure 3.17: Well Sor-201 schem at ic .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Figure 3.18: Well Sor-201 forecasts (gas rate vs. t im e) , w/ com pr. from 1st March 2014 ... 67

Figure 3.19: Well Sor-201 forecasts (gas rate vs. cum . gas product ion) , w/ compression from 1st March 2014 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Figure 3.20: Well Sor-201 condensate product ion forecasts .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Figure 3.21: Sorochynska - p/ z plots of wells 469, 110 and Sor-201 (each well separate) . 71

Figure 3.22: Sorochynska - p/ z plots of wells 110 and sor-201 (assuming that wells drain sam e block) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Figure 3.23: P/ z plot for wells 110 and Sor-201 (each well separate) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Figure 5.1: Reserve Sum m ary shown as Figure 19 in 2012 Moyes & Co., I nc report .. . . . . . . . 80


AGR TRACS I nternat ional Ltd September 2013 v

Tables

Table 0.1: Sorochynska - reconciliat ion of gas reserves B-18 Upper reservoir, East block . viii

Table 0.2: Sorochynska - reconciliat ion of condensate reserves B-18 Upper reservoir, East block .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v iii

Table ES.1: Sorochynska East block - TRACS and Moyes GI I P est im ates ... . . . . . . . . . . . . . . . . . . . . . x iii

Table ES.2: Sorochynska - reconciliat ion of gas reserves B-18 Upper reservoir, East block xiv

Table ES.3: Sorochynska - reconciliat ion of condensate reserves B-18 Upper reservoir, East block .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x iv

Table 2.1: B-19 Hydrocarbon presence ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Table 2.2: B-24 Hydrocarbon presence ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Table 2.3: Sorochynska wells - shale volum e m ethod and param eters .. . . . . . . . . . . . . . . . . . . . . . . . . . 26

Table 2.4: Sorochynska wells – porosity m ethod and parameters .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Table 2.5: Sorochynska wells - Rw values ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Table 2.6: Sorochynska wells – possible pay intervals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Table 2.7: Sorochynska - pay interval propert ies using porosity > = 8% and Sw < = 45% .. 32

Table 2.8: Sorochynska - pay interval propert ies using porosity > = 5% and Sw < = 70% .. 33

Table 2.9: Sorochynska - pay interval propert ies for carbonate sect ion using porosity > = 5% and Sw < = 70% .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Table 2.10: Sorochynska B-18 – GI I P est im ates ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Table 2.11: Correlat ion tops Sorochynska B-18 Pet rel study ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Table 2.12: Sorochynska B-18 Pet rel model layering scheme (~ 2m / layer) . . . . . . . . . . . . . . . . . . . . 39

Table 2.13: Gas-water contacts used in Sorochynska B-18 Pet rel m odel... . . . . . . . . . . . . . . . . . . . . . . 41

Table 2.14: Sorochynskaya B-18 interval variogram range for facies m odelling ... . . . . . . . . . . . . 45

Table 2.15: Sorochynskaya B-18 variogram range for property m odelling ... . . . . . . . . . . . . . . . . . . . 46

Table 2.16: Sorochynskaya Field Sw average value ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Table 2.17: Sorochynska Field uncertainty in the m odel .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Table 2.18: Sorochynska B-18 GI I P est im ates ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Table 2.19: Sorochynska B-19 GI I P ranges (100% ) ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Table 2.20: Sorochynska B-24 GI I P ranges (100% ) ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Table 3.1: Sorochynska gas format ion volume factors for volum etr ic est im ates (Monte Carlo) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Table 3.2: Sorochynska well spud dates (source: Sorochynska TEO) ... . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Table 3.3: Sum m ary of p/ z data for wells 110, 469, and Sor-201 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Table 3.4: Sor-201 - perm eability and pressure from pressure tests analyses by ODI N reservoir consultants and TRACS ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Table 3.5: Sor-201 - Low Case (P90) technical product ion forecast w/ compression from 1st March 2014 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68


AGR TRACS I nternat ional Ltd September 2013 v i

Table 3.6: Sor-201 - Mid Case (P50) technical product ion forecast w/ com pression from 1st March 2014 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Table 3.7: Sor-201 - High Case (P10) technical product ion forecast w/ compression from 1st March 2014 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Table 4.1: Current Subsoil Use Paym ents in Ukraine ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Table 4.2: Current depreciat ion rates for capital costs .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Table 4.3: Summary of costs est imates 2013-2023 for Sor-201 well . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Table 4.4: Sor-201 - summary of econom ic cut -offs and remaining reserves for NFA and Com pression cases ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Table 5.1: Remaining gas and condensate reserves in Sor-201 B-18 Upper reservoir East block .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Table 5.2: TRACS and Moyes GI I P est im ates for Sorochynska East block only .. . . . . . . . . . . . . . . . 79

Table 5.3: Sum m ary of Moyes’ recovery factors and m ethods applied ... . . . . . . . . . . . . . . . . . . . . . . . . . 80

Table 5.4: Sorochynska - reconciliat ion of gas reserves B-18 Upper reservoir, East block . 81

Table 5.5: Sorochynska - reconciliat ion of condensate reserves B-18 Upper reservoir, East block .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Table 6.1: Sorochynska East block - TRACS and Moyes GI I P est im ates ... . . . . . . . . . . . . . . . . . . . . . . . 83

Table 6.2: Sorochynska - reconciliat ion of gas reserves B-18 Upper reservoir, East block . 84

Table 6.3: Sorochynska - reconciliat ion of condensate reserves B-18 Upper reservoir, East block .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84


AGR TRACS I nternat ional Ltd September 2013 v ii

Cover Let ter

The Directors Hawkley Oil & Gas, 45 Ventnor Avenue, West Perth, WA 6005, AUSTRALI A

26 th September 2013

Gent lemen,

Reserves Statem ent on Haw kley’s Sorochynska licence as of 3 0 th June 2 0 1 3

I n response to your request AGR TRACS I nternat ional Ltd ( “TRACS” ) has carr ied out a subsurface review and reserves assessm ent on the Sorochynska licence in eastern Ukraine held 100% by Hawkley Oil & Gas ( “Hawkley” ) . While the subsurface review and in-place est imates encompass three intervals; the B-18, B-19, and B-24, the reserves statement focuses solely on the B-18 interval within the East block. At present only one well (Sor-201) is on product ion ( from the B-18 Upper sand) , with no further dr illing envisaged. Low-Mid-High (1P-2P-3P) reserves est im ates were derived by TRACS for two scenarios; a No Further Act ivity (NFA) scenario, and a scenario with gas compression installed and operat ional from 1st March 2014.

The planned gas com pressor yields increased reserves for all three cases, but the incremental product ion for the 1P case is modest (est imated at 0.06 BCF) as this case is essent ially an accelerat ion case com pared to the 1P NFA case. The increm ental product ion for the 2P case with com pression is est imated at 1.73 BCF before econom ic cut -off is reached under Hawkley’s Base Case gas and condensate price assum pt ions, and represents an indicat ive incremental NPV(10% ) of some US$ 5.75m ln net to Hawkley.

The new TRACS reserves est im ates were reconciled with the previous reserves est imates derived by Moyes & Co., I nc. dated 1st Jan. 2012, and the TRACS est im ates and the reconciliat ions are sum m arised for gas and condensate in Table 0.1 and Table 0.2 respect ively.

The reconciliat ion is done solely on the B-18 Upper sand in the Eastern block where the producing well Sor-201 is located. I nstallat ion of the compressor is scheduled for the winter of 2013-2014 and has therefore been termed undeveloped.


AGR TRACS I nternat ional Ltd September 2013 v iii

Descr ipt ion Date Gas BCF

Com m ents Low / 1 P Mid/ 2 P High/ 3 P

Proved Developed (NFA)

30.06.2013

1.56 2.05 2.68 NFA without compression

Proved Undeveloped 0.06 1.73 2.07 Addit ional by compression

Proved 1 .6 2 3 .7 8 4 .7 5

Proved Developed (NFA) 6.29 Moyes Report 1.1.2012

Product ion from 1.1.2012 to 30.06.2013 2.41

Reserves from Undev./ 2P to Proved -2.26 -0.10 0.87

Produced by well Sor-201 t ill 1.1.2012 2.12

Produced by well 110 3.10

Est imated Ult imate Recovery 9 11 12 Wells 110 and Sor-201

Volumetr ic in Place (Gas) 16 28 40

I mplied Recovery Factor 58% 41% 31%

Table 0 .1 : Sorochynska - reconcilia t ion of gas reserves B- 1 8 Upper reservoir , East block

Descr ipt ion Date Condensate Mstb



30.06.2013

24 32 42 NFA without compression

Proved Undeveloped 1 9 11 Addit ional by com pression

Proved 2 5 4 1 5 3

Proved Developed (NFA) 160 Moyes Report 1.1.2012

Product ion from 1.1.2012 to 30.06.2013 68

Reserves from Undev./ 2P to Proved -68 -52 -40

Produced by well Sor-201 t ill 1.1.2012 76

Produced by well 110 132

Est imated Ult imate Recovery 317 Wells 110 and Sor-201

Volumetr ic in Place (Condensate)# 720 1168 1862


# Based on a CGR range of 33 to 57 stb/ MMscf

Table 0 .2 : Sorochynska - reconcilia t ion of cond ensate reserves B- 1 8 U pper reservoir , East block


AGR TRACS I nternat ional Ltd September 2013 ix

The work was undertaken by a team of TRACS professional pet roleum engineers and geoscient ists based on data supplied by Hawkley. The data com prised details of licence and acreage interests, basic explorat ion geological and geophysical data, interpreted data, and technical presentat ions. TRACS have exercised due diligence on all technical inform at ion supplied by Hawkley. TRACS have not independent ly checked t it le interests with Government or licence authorit ies.

I n est imat ing prospect ive and cont ingent resources we have used the standard pet roleum engineering techniques. These est im ates are based on the joint definit ions of the Society of Pet roleum Engineer, the World Pet roleum Congress, the Am erican Associat ion of Pet roleum Geologists and the 2007 PRMS (Pet roleum Resources Managem ent System ) . TRACS has not conducted a site visit to independent ly verify the existence of physical assets.

Qualif ica t ions

AGR TRACS I nternat ional Ltd is an independent consultancy specialising in pet roleum reservoir evaluat ion and econom ic analysis. Except for the provision of professional services on a fee basis, AGR TRACS Internat ional Ltd does not have a commercial arrangement with any other person or company involved in the interests that are the subject of this report .

The project was m anaged and signed off by Nigel Blot t (M.Eng.) , a TRACS Manager. Mr. Blot t , a pet roleum engineer and SPE Mem ber, has 30+ years experience from the Middle East , South-East Asia, and NW Europe. AGR TRACS Internat ional Consultancy Ltd has conducted valuat ions for many energy companies and financial inst itut ions.

Basis of Opinion

The evaluat ion presented in this report reflects our informed judgem ent based on accepted standards of professional invest igat ion, but is subject to generally recognised uncertaint ies associated with the interpretat ion of geological, geophysical and subsurface reservoir data.

I t should be understood that any evaluat ion, part icularly one involving explorat ion and future pet roleum developm ents, m ay be subject to significant variat ions over short periods of t ime as new informat ion becomes available.

Yours faithfully,

Nigel Blot t AGR TRACS I nternat ional Ltd (a com pany of the AGR group)


AGR TRACS I nternat ional Ltd September 2013 x

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AGR TRACS I nternat ional Ltd September 2013 x i

Disclaim er

I NDEPENDENT VALUATI ON OF HAW KLEY’s I NTERESTS

I N THE SOROCHYNSKA BLOCK,

EASTERN UKRAI NE

This report relates specifically and solely to the subject pet roleum licence interests and is condit ional upon the assum pt ions m ade therein. This report m ust therefore be read in it s ent irety.

This report was prepared in accordance with standard geological and enginHawkleying m ethods generally accepted by the oil and gas indust ry. Est im ates of prospect ive hydrocarbon resources should be regarded only as est im ates that m ay change as addit ional informat ion become available. Not only are these est imates based on the informat ion current ly available, but are also subject to uncertaint ies inherent in the applicat ion of judgem ental factors in interpret ing such informat ion. AGR TRACS I nternat ional Consultancy Ltd shall have no liabilit y arising out of, or related to, the use of the report .

26 th September 2013


AGR TRACS I nternat ional Ltd September 2013 x ii

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AGR TRACS I nternat ional Ltd September 2013 x iii

Execut ive Sum m ary

At the request of Hawkley Oil & Gas TRACS has carr ied out a com prehensive subsurface review of the Sorochynska licence based on the new 2012 3D survey, all available well data, pet rophysical logs and other reports, plus all recent and histor ic product ion data in order to provide a range of remaining reserves for the B-18 Upper reservoir in the East block as of 30 th June 2013.

The TRACS GI I P est imates for B-18 Upper and Lower reservoirs are based on the new depth maps derived from the 2012 3D seism ic survey (see Table ES.1) . By cont rast the GI I P est im ates of Moyes & Co. were based on older depth maps derived from legacy 2D seism ic data of m ixed vintages.

B- 1 8 Reservoir East Block only

GI I P Est im ates from TRACS Pet re l m odel ( BCF)

P9 0 P5 0 P1 0

Upper 16 28 40

Lower 5 8 11

Tota l 2 1 3 6 5 1

Moyes 3 5 * 6 0 * * 8 0 * * *

Note: * Volume connected to 110 well, well Sor-201 connected to 110

* * Combinat ion of Net Sand Map and lim ited drainage around Sor-201

* * * Assum es completely connected accumulat ion

Table ES.1 : Sorochynska East block - TRACS and Moyes GI I P est im ates

At present only one well (Sor-201) is on product ion ( from the B-18 Upper sand) , and no further drilling is envisaged. Low-Mid-High (1P-2P-3P) reserves est imates were derived by TRACS for two scenarios; a No Further Act ivity (NFA) scenario, and a scenario with gas compression installed and operat ional from 1st March 2014.


The new TRACS reserves est imates were reconciled with the Moyes est im ates of 1st Jan. 2012, and the TRACS est im ates and the reconciliat ions are summarised for gas and condensate in respect ively Table ES.2 and Table ES.3.

The reconciliat ion is done solely on the Eastern block (B-18 Upper sand) where the producing well Sor-201 is located. I nstallat ion of the compressor is scheduled for the winter of 2013-2014 and has therefore been termed undeveloped.

The reconciliat ion suggests that well Sor-201 will deplete the remaining reserves at tached to the well, but judging from the com parison to volum etr ic est im ate there m ight st ill be isolated pockets of gas that will remain undepleted. No further act ivit ies are envisaged by Hawkley.


AGR TRACS I nternat ional Ltd September 2013 x iv




30.06.2013



Proved 1 .6 2 3 .7 8 4 .7 5









Table ES.2 : Sorochynska - reconcilia t ion of ga s reserves B- 1 8 Upper reservoir , East block




30.06.2013



Proved 2 5 4 1 5 3










Table ES.3 : Sorochynska - reconcilia t ion of cond ensate reserves B- 1 8 Upper reservoir , East block


AGR TRACS I nternat ional Ltd September 2013 1

1. I nt roduct ion

The Sorochynska licence (3003) is located in the Myrhorod dist r ict of the Poltava Oblast approxim ately 240 km east of Kiev in the north-western part of the Dnieper-Donets basin, Eastern Ukraine (Figure 1.1) .

Figure 1 .1 : Locat ion m ap of Sorochynska Li cence w ith in Dnieper- Donets Basin, Ukra ine

The prim ary reservoir targets in this licence are the Carboniferous Upper Visean B-18 and B-19 clast ic reservoirs and the Lower Visean B-24 carbonate reservoir. Com m ercial product ion has taken place on the licence from the B-18 reservoir.

I n addit ion to the product ion on the licence, com m ercial rates have been achieved from a num ber of nearby fields including the Radchenkivke field to the south of Sorochynska. Hydrocarbons have also been tested in the Malisorochynts field to the west (see Figure 1.2) .



Figure 1 .2 : Sorochynska w ell loca t ions and nearby f ie lds

(Source: Moyes & Co., March 2012 Report )

The general st rat igraphy of the Sorochynska area is shown in Figure 1.3 and the various intervals of interest in the Sorochynska licence are highlighted.



Figure 1 .3 : St ra t igraphic colum n Soroch ynska area w ith key targets highlighted



2. I n-Place Volum e Stat ic Model

2.1. Seism ic data available

The data available for the Sorochynska licence consisted of a recent ly acquired 3D seism ic data set which covers an area of approxim ately 190 km 2 (of which approxim ately 100 km 2 is full fold) . The data quality is generally good and the key horizons can be m apped with a reasonable degree of confidence.

Eleven wells have been drilled on the licence the m ost recent of which is the Sorochynska-202 well which reached its target in Septem ber 2012. Log data was available for all these wells together with some test data. Locat ions for two wells dr illed outside the licence were provided but no data was available for these wells.

Figure 2.1 is the Sorochynska Base Map showing the extent of the 3D seism ic data and the well locat ions.

Figure 2 .1 : Sorochynska Base Map

I n addit ion to the seism ic and well data, various reports and presentat ions were also available.



2.2. Past Drilling

Eleven wells have been drilled on the Sorochynska licence. There has also been drilling act ivity in the surrounding areas although only two wells were provided outside the licence; the Sorochynska-106 and Sorochynska-107 wells. The Sorochynska-107 well is thought to be the Koshove discovery well, but only the locat ion was provided for this well.

The Koshove field to the north of Sorochynska is reported to have discovered gas condensate, but it is not clear if the field was commercial.

The wells dr illed within the Sorochynska licence have had varying degrees of success. The Sorochynska-469 well was the first well to be drilled in the licence and was spudded in 1981. I t tested from the Upper Visean B-18 sandstone reservoir in 1982 and the well was put on product ion in 1983.

Subsequent wells proved less successful with only the Sorochynska-110 well encountering significant hydrocarbons in the B-18 reservoir. This well com m enced product ion in 1989 and ceased in 1991 when water influx killed the well. I t has been interpreted that the water product ion was from B-17 and was caused by a casing leak although the evidence for this was not available for review.

The m ost recent wells (Sorochynska-201 and Sorochynska-202) were drilled close to the Sorochynska-110 well and encountered hydrocarbons in the B-18 reservoir. The Sorochynska-201 well is producing from this reservoir, while the Sorochynska-202 well, which reached TD in Septem ber 2012, is considered to have encountered an isolated sand at this level which depleted rapidly on test .

The remaining wells on the licence failed to encounter significant hydrocarbons in the B-18 reservoir. However, there is evidence for hydrocarbons in the deeper B-19 reservoir in several wells and also in the B-24 carbonate reservoir . Current ly, there have been no successful tests from the B-19 reservoir, and the B-24 reservoir contains only thin intervals of pay and has not tested at com mercial rates.

2.3. Sorochynska St ructural Mapping

The Sorochynska area is covered by a 3D seism ic data set and this has been reviewed to assess the volum etr ic potent ial for the B-18, B-19 and B-24 reservoirs. I nterpreted horizons were provided for each of the reservoirs.

The following sect ions provide a summary of the interpretat ion and the volum es est im ated for each reservoir.

2.3.1. Sorochynska B-18 Reservoir

The B-18 reservoir is interpreted as a fluvial deposit consist ing of sandstones and siltstones with inter-bedded claystones. The well results to date suggest that there m ust be som e degree of compartmentalisat ion of the reservoir because of pressure differences between wells and absence of hydrocarbons in other wells.

The previous m echanism for separat ing the wells was by fault ing between the wells. This was based on the old 2D seism ic data. However, the recent ly acquired 3D seism ic data does not support this interpretat ion and so som e other m ethod is required.



Hawkley provided a Top B-18 interpreted horizon and this was input to the Kingdom project . I t was found that this horizon was slight ly above the top B-18 seen in the wells. Figure 2.2 shows an arbit rary line across the area to illust rate the well to seism ic t ies. A new horizon was therefore picked and this is interpreted as the Near Top Upper B-18 reservoir. A further horizon was picked to represent the base of the Lower B18 event .

Figure 2 .2 : Random seism ic line show ing w ell t ies

Using these horizons to define the overall B-18 interval it was possible to ident ify a possible pinchout close to the Sorochynska-109 well where Hawkley interpret the B-18 to be absent (Figure 2.3) . This pinchout can be m apped across the licence and represents the updip lim it of the reservoir (Figure 2.4) . The reflector is variable in quality and the posit ioning of the pinchout edge is uncertain. However, the evidence for thinning of the interval seen in the data is reasonable. The reason for the relat ively poor quality of the reflectors, part icular ly near the pinchout could be due to tuning effects.



Figure 2 .3 : Seism ic line ( I n line 3 2 0 ) illust ra t ing pinchout



Figure 2 .4 : Top B- 1 8 TW T m ap show ing pinchout edge

The pinchout therefore provides a m echanism for separat ing the Sorochynska-469 and Sorochynska-110 wells from the updip Sorochynska-109 well. There is st ill a problem with separat ing the Sorochynska-469 and Sorochynska-110 areas where pressure data suggests that these two areas are not in com m unicat ion. Previously, a fault was interpreted between these wells to provide the separat ion based on the old 2D seism ic data. However, the 3D data does not support this interpretat ion.

I n order to t ry to ident ify an alternat ive m echanism for separat ing these areas, the am plitude between the top and base horizons was analysed. Although by no m eans conclusive, there is evidence on the amplitude display for lower am plitude zones between the Sorochynska-469 and Sorochynska-110 areas as well as between the Sorochynska-469 and the area to the west . Figure 2.5 shows these areas highlighted. These areas have been used to guide the polygon definit ion for volum etr ic est im at ion. Figure 2.5 also shows the polygons used in the volum et r ic est im at ion.



Figure 2 .5 : B- 1 8 Am plitude m ap show ing volum et r ic p olygons

The B-18 top and base t im e horizons were depth converted to produce depth surfaces. Various m ethods were invest igated to generate the depth gr ids. The preferred m ethod was a funct ion from surface to each horizon as this resulted in the smallest residuals at the wells. Figure 2.6 and Figure 2.7 show the funct ions used.



Figure 2 .6 : Sur face to Top B- 1 8 ve locit y funct ion

Figure 2 .7 : Sur face to Base B- 1 8 velocit y funct ion

The velocity funct ions were applied to the t im e grids to produce depth gr ids for the top and base B-18 surfaces. The grids were adjusted to t ie the wells and the result ing depth st ructure maps are shown in Figure 2.8 and Figure 2.9 below.



Figure 2 .8 : B- 1 8 Upper depth st ructure m ap



Figure 2 .9 : B- 1 8 Low er Base depth st ructure m ap

These grids were exported and input to Pet rel to produce a stat ic geological m odel for volum etr ic est im at ion. The Pet rel m odel and volumet r ic est imat ion is described Sect ion 2.5 below.




The B-19 reservoir consists of a series of interbedded shallow m arine sandstones and shales represent ing t ransgressive / regressive cycles. The B-19 reservoir appears to be present in all the wells although not all of them contain hydrocarbons.

Table 2.1 shows the wells that appear to contain hydrocarbons.

Table 2 .1 : B- 1 9 Hydrocarbon presence

Hawkley provided a B-19 interpreted horizon which was loaded into the Kingdom project . The seism ic reflector appears to be consistent across the area and following som e edit ing of the horizon outside the licence area, TRACS concurs with the interpretat ion. Based on the well t ie with the seism ic, the horizon provided appears to correspond to the base of the B-19 Lower horizon. Figure 2.10 shows the result ing Two-Way Time (TWT) map.

W ell B- 1 9 hydrocarbon presence

108 Y

109 Y

110 Y

111 N

112 ?

113 N

114 N

120 Y

201 Not penet rated

202 Y

469 Y



Figure 2 .1 0 : B- 1 9 Low er Base TW T m ap

As with the B-18 reservoir, com partm entalisat ion is likely but the m echanism for separat ing the wells is not expected to be fault ing. A near Top B-19 Upper horizon was interpreted and this was used to ext ract a m inim um am plitude between the Top and Base B-19 interval. Figure 2.11 shows the m inimum amplitude for this interval.



Figure 2 .1 1 : Top B- 1 9 Upper to Base B- 1 9 Low er Mini m um am plitude

Using the am plitude display, a possible northwest to southeast t rend can be seen. Three polygons have been drawn to define the potent ial lim its of the reservoir for volumetr ic est im at ion (shown in Figure 2.11 above) . This provides a possible m echanism for separat ing the wells although further, m ore detailed interpretat ion of this interval is recom m ended to refine this model.

Various m ethods of depth conversion were invest igated to generate depth m aps for the top and base B-19 surfaces. The preferred m ethod for the B-19 Lower base surface was a velocity funct ion from surface to the B-19 Lower base pick. This resulted in the least residuals at the wells. The funct ion is shown in Figure 2.12 below.



Figure 2 .1 2 : Sur face to B- 1 9 Lo w er base velocit y funct ion.

This funct ion was applied and the result ing velocity gr id was used to generate a depth surface for the B-19 Lower base surface. The grid was adjusted to t ie the wells and the result ing t ied depth m ap is shown in Figure 2.13 below.



Figure 2 .1 3 : B- 1 9 Low er base depth m ap

For the B-19 Upper surface, it was found that subt ract ing an isopach of 55m and then tying the wells resulted in the least residuals. Figure 2.14 shows the result ing B-19 Upper depth m ap.



Figure 2 .1 4 : B- 1 9 Upper depth m ap

These depth grids were then used to calculate Gross Rock Volum es for the volum etr ic est im at ion (Sect ion 2.6 below) .


The B-24 reservoir consists of Lower Visean Carbonates which have been described as dark grey to grey with fractures and occasional vugs. Som e m udstones and silts have also been seen. Of the eleven wells dr illed on the licence, eight were drilled deep enough to penet rate the B-24 interval. Of these, six were tested and three flowed gas. Table 2.2 sum m arises the well results for B-24.



W ell B- 2 4 Hydrocarbon presence Pay Zone

108 Y – tested m ax 0.44 MMscfd Top of B-24

109 Tested but flowed water with gas -

110 Y – tested 0.1 MMscfd (est im ate) Base of B-24

111 No pay -

112 Tested but flowed water with gas Base of B-24

113 Tested but failed to flow -

114 No pay -

120 Y – tested 0.35 MMscfd Top of B-24

201 Not penet rated -



Table 2 .2 : B- 2 4 Hydrocarbon presence

Hawkley provided an interpreted horizon for the B-24 interval and this appears to correspond to the top of the B-24 carbonate. The seism ic event is a st rong t rough reflector and TRACS concurs with the interpretat ion. Figure 2.15 is a seism ic line through the Sorochynska-110 well to show the seism ic event and the well t ie. The other wells also show a good t ie with the seism ic.

Figure 2 .1 5 : Line 3 9 0 through Sorochynska- 1 1 0 w ell

The well data suggests that com partm entalisat ion is likely not least because the ident ified pay zones within the carbonate are either at the top of the unit , as in the Sorochynska-108 well, or at the base as in the sorochynska-110 well. Figure 2.16 shows the B-24 pay zones.



Figure 2 .1 6 : Pay zones in the B- 2 4 reservoir

This compartmentalisat ion was previously achieved by interpret ing a series of southwest to northeast faults between the wells. A num ber of faults have been ident ified on the 3D seism ic data although these have a northwest to southeast t rend. This is clear ly illust rated on the B-24 upper zone RMS amplitude display (Figure 2.17) .



Figure 2 .1 7 : B- 2 4 Upper zone RMS am plitude

This fault t rend m ay separate the wells but it is not conclusive. The fault t rend has been combined with the amplitude to ident ify the possible lim its of the upper and lower pay zones. Figure 2.17 shows the possible area for the upper B-24 zone. I n order to assess the lower zone, a constant isochron of 55m s was added to the top horizon and this was then ‘snapped’ to the nearest peak. This is just an approxim at ion and m ore detailed m apping should be carr ied out to refine the interpretat ion but this m ethod does at least provide a guide to the potent ial pay zone lim its. Figure 2.18 below, shows the lower zone with the potent ial lim its of the pay zone around the Sorochynska-110 well.



Figure 2 .1 8 : B- 2 4 Low er zone RMS am plitude

Various depth conversion m ethods were invest igated to convert the B-24 t im e horizon to depth. The preferred m ethod for depth convert ing to the Top B-24 horizon was a velocit y funct ion for the Base B-19 to Top B-24 interval. This resulted in the sm allest residuals at the wells. The velocity funct ion is shown in Figure 2.19 and the result ing depth m ap t ied to the wells is shown in Figure 2.20.

Figure 2 .1 9 : Base B- 1 9 to Top B- 2 4 ve locit y funct io n



Figure 2 .2 0 : Top B- 2 4 Depth m ap t ied to w ells

I n order to est im ate the GRVs for the upper and lower zones, a constant 6m isopach was added to the Top B-24 depth m ap to produce the upper zone and a constant 6m isopach was subt racted from the Base B24 depth m ap to produce the lower zone. These m aps were used in the volumet r ic est imat ion described in Sect ion 2.6 below.

2.3.4. Sorochynska Upside Potent ial

I n addit ion to the B-18, B-19 and B-24 intervals descr ibed above, there are a number of addit ional horizons that have been ident ified on the logs as having the potent ial to contain hydrocarbons. These are listed in the pet rophysical sect ion in Table 2.6 below and include the B-16, B-17 and B-22 horizons. No interpreted horizons were provided for these intervals so it was not possible to est im ate hydrocarbon volumes for these intervals. I n some cases, such as B-16, the intervals consist of thin beds which are difficult to resolve with convent ional logs and so the presence of hydrocarbons on the logs m ay be erroneous. I n



other cases there is st ronger evidence to support the presence of hydrocarbons and these are considered to have a bet ter chance of success. Further m apping is required to m ore fully evaluate these potent ial reservoirs and future test ing would provide data on whether these intervals are likely to produce at reasonable rates.

There is also some potent ial upside in the horizons already ident ified as potent ial reservoirs, but not included in previous volumet r ic est imat ions, e.g. the B-18 and B-19 reservoirs in the Sorochynska-112 area. This well shows som e potent ial for hydrocarbons. This well m ust be separate from the Sorochynska-111 well to the west which is updip, but shows no evidence for pay. Using the amplitude maps for these intervals, an addit ional polygon has been created to define the lim its of the potent ial pay area for both the B-18 and B-19 reservoirs (Figure 2.5 and Figure 2.11) .

These upside opportunit ies are not without r isks. These include the presence of thin beds at the Sorochynska-112 locat ion which result in small volum es. I n addit ion, the thin beds m ay not be properly resolved and the current log interpretat ion m ay be erroneous because of this.

I n-place volumes for the upside potent ial have been est imated and are provided in a separate table in Sect ion 2.6.



2.4. Pet rophysics Review

Hawkley provided an extensive set of well log data from a range of wells on and around their two blocks. The available log data has been reviewed in order to confirm the pay zones and also the “m issed pay” intervals proposed by Hawkley’s advisors.

2.4.1. Data Available

Data from eleven ( including the recent ly drilled well Sorochynska-202) wells was supplied com prising of Gam m a Ray, Caliper, Spontaneous Potent ial, Neut ron, Sonic and Resist ivity – although Sonic and Caliper was not available for all of the wells. Micro-norm al and m icro-inverse resist iv ity data were also available for some intervals on som e of the wells but this was not used for the evaluat ion.

The operator had normalised the original recorded Gamma Ray data across the field and converted the data to API values; a sim ilar exercise had been conducted on the Neut ron data which had then been converted to porosity units. The Spontaneous Potent ial curve had been baseline shifted such that the response in shale was at around 0 mV. No informat ion is available on the origin of the supplied Resist iv it y data or on the Sonic t ravel t ime data.

The calculated shale volum e, porosity and water saturat ion as determ ined by the operator were also provided.

For well Sorochynska-202 the data was not normalised as it was not considered necessary.

2.4.2. Data Quality

A comparison of the data across the eleven wells did not ident ify any significant issues in term s of data quality although when the data was used in the evaluat ion som e variat ion in parameters was required.

The caliper data when available does show the borehole to be of variable qualit y although the sand intervals themselves appear to be in gauge. The variat ion in borehole size does have the potent ial to impact the Neut ron data and hence the apparent porosity values although in general this does not appear to occur to a significant degree as far as can be ascertained.

The Sonic data does exhibit a large amount of noise and erroneous values for som e of the wells requir ing the data to be edited prior to use. Where pract ical this was done by creat ing a synthet ic Sonic using the other available data form the same well or also from offset wells.

One of the main issues concerns the abilit y of the data to adequately resolve for thin beds and with the corresponding bed boundary effects; this is part icular ly an issue with the resist iv ity data such that the values for t rue form at ion resist ivity m ay in som e cases be too high and in others too low.

2.4.3. Evaluat ion Procedure

The param eters and m ethods used for the evaluat ion are summarised in the sect ions below.



Shale Volume

Shale volum e was determ ined prim arily from the Gamm a Ray for the sandstone intervals based on the 5% and 95% percent iles of the Gamma Ray dist r ibut ion on each well. The except ion was for well Sorochynska-469 where the magnitude of the Gamma Ray data seemed to vary over the analysed interval and hence the clean and shale param eters were varied (see Table 2.3) . The m ain sands are readily ident ified on both the Gam m a Ray and the Spontaneous Potent ial, and also the Neut ron data, but it is possible that som e thin sands are determ ined as having a shale content that is too high.

There is no significant difference from the values as determ ined by the operator in terms of ident ify ing the potent ial reservoir intervals except they appear to have opted to determ ine clay volum e as opposed to shale volum e and as such in the non- reservoir intervals the clay volume is lower than the shale volume.

Determ inat ion of the shale volume in the B-24 carbonate interval was not considered to be as st raight forward, as there were apparent cont radict ions between the logging tool responses such that the Gamma Ray seemed to be underest im at ing shale content for some intervals. Consequent ly, for some of the wells that had an extended carbonate sect ion the m inimum of a shale volume from the Neut ron and from the Spontaneous Potent ial was used.

W ell GRcl GRsh Com m ents

Sorochynska-108 27 159


5/ -70 1.5/ 0 Minim um of SP and _NEUT used for B24 Carb to TD

Sorochynska-110 30 160 SP used ( -85/ -5) when GR not available)


3.5/ -65 1.5/ -5 Minim um of SP and _NEUT used for B24 Carb to TD


4/ -80 1.3/ -10 Minim um of SP and _NEUT used for B24 Carb to TD




5/ -85 1.5/ -10 Minim um of SP and _NEUT used for B24 Carb to TD


Sorochynska-202 3.5 16

6 14 3990m - 4071m

Sorochynska-469

40 160 GR seem s to "dr ift " over sect ion requir ing change in GR param eters

25 129 3856m - 4186m

20 140 4186m - 4342m

80 205 4342m - TD

Table 2 .3 : Sorochynska w ells - sha le volum e m ethod and param eters



Porosity

As there is no “high quality” porosity data there is inevitably some uncertainty in the evaluat ion of this param eter. The conversion of the Neut ron count rates to porosity requires an assum pt ion of the range of apparent porosity values encountered and sim ilar ly the determ inat ion of porosity from the Sonic requires knowledge of the mat r ix and fluid t ravel t imes.

A sect ion of core was available from well Sorochynska-110 that showed porosity values of between 10% and 14% with an average of the quoted values of 12.8% . Because of the fact that the values are not given as discrete values per depth it is not pract ical to ut ilise the data in a convent ional log to core calibrat ion, but the operator found that in order to obtain acceptable agreem ent with the core data the Sonic mat r ix t ravel t ime needed to be 49 µsec/ ft with a fluid t ravel t im e of 189 µsec/ ft . Whilst this is lower than the normal value of 55 µsec/ ft for a sandstone, using this value would result in porosity value too low compared with the core and hence it was considered that the use of the operator determ ined values were acceptable.

Whilst the Sonic is considered the preferred m ethod for determ ining porosity in some cases it exhibited too m any erroneous values to be used direct ly. I n these cases the porosity as determ ined from the Neut ron was com pared with the Sonic derived porosity and a funct ion derived to rescale the Neut ron so that it m atched the Sonic values and was then used as the final value (see Table 2.4) .

For those wells where Sonic was not available then the Neut ron was used, but the result ing porosity values were then com pared with the other wells to ensure the overall range was sim ilar, and, if not , an addit ional normalisat ion was applied.

For the B-24 carbonate interval on wells Sorochynska-109 and Sorochynska-120, where only Neut ron data were available, the porosity values seemed too high and hence the porosity was based on the resist ivity data assum ing 100% Sw .

Water Saturat ion

No definit ive data is available for the parameters used in the derivat ion of Sw (Rw , m and n) . The operator has used values for m and n of 2 and 2 and state there m ay be som e variat ion in form at ion water salinity between the reservoirs but that it is in the region of 70k ppm to 80k ppm NaCl. I t is not clear if this stated variat ion is based on analysis of any produced waters or based on the variat ion in log response.

This evaluat ion has used the sam e values for m and n and has determ ined Rw on a well by well basis from a Picket t plot that shows a variat ion from 0.02 ohmm at reservoir tem perature to 0.079 ohm m at reservoir tem perature. Whilst a variat ion in water salinity is possible it is considered likely that the apparent difference is due to either errors in the calculated porosity or discrepancies in the resist ivity data.

The Sim andoux equat ion has been used together with a shale resist ivity of 10 ohm m ( the sam e as the operator) , but given that the sands them selves have low shale content the form of the Archie equat ion used will have m inimal impact on the calculated value of Sw .



W ell Dtm a DTfl DTsh Neutsh Adj . Factor Com m ents

Sor-108 49 189 90 0.24

Sonic edited by com paring with Neut ron, Rt and GR response

Sor-109

- - - 0.24 0.8 Sonic not available, Neut ron adjusted so that porosity range was in line with other wells

Neut ron porosity seem s too high in B24 Carb com pared with offset wells (no Sonic available) so PHI E set to BVW

Sor-110 49 189 90 0.24 1.282523* PNEU

-0.08320348

Neut ron porosity adjusted to Sonic then used as PHI E as less noisy than Sonic. Sonic m at rix selected so that porosity is in line with core data for this well

Sor-111 49 189 90

Sonic edited by com paring Neut ron/ Sonic response with that from well # 110

48 189 90

B24 Carbonate

Sor-112 49 189 90 0.24

1.313308* PNEU -0.1063727

Neut ron porosity adjusted to Sonic then used as PHI E as less noisy than Sonic.

48 189 90

B24 Carbonate

Sor-113 49 189 90 0.24 0.8530864* PNEU

-0.008122311


Sor-114 49 189 90 0.24 1.258965* PNEU

-0.05624452


Sor-120

49 189 90 0.24

Neut ron not available for sand sect ion

Neut ron porosity seem s too high in B24 Carb com pared with offset wells (no Sonic available) so PHI E set to BVW

Sor-201 49 189 90 0.24

Good agreem ent with Neut ron

Sor-202 49 189 90 Sonic edited by com paring with Neut ron, Rt , and GR response

Sor-469 - - - 0.24

Sonic not available

Table 2 .4 : Sorochynska w ells – porosity m ethod and param eters



W ell Rw

Sorochynska-108 0.079











Table 2 .5 : Sorochynska w ells - Rw va lues

2.4.4. Net Pay I ntervals

Determ inat ion of pay intervals is difficult due to the lim itat ions of the available log data and uncertainty in some of the input parameters, result ing in either intervals showing as pay/ reservoir which are not , due to log induced artefacts, or the om ission of intervals as pay/ reservoir due to lim itat ions in the resolut ion of the data. As such, it is not considered pract ical to rely solely on the use of convent ional cut -offs to determ ine pay intervals for volumetr ic purposes. Therefore a two-step approach has been adopted where potent ial pay intervals have been visually ident ified based on a judgemental analysis of the reliabilit y of the calculated values and graded according to the perceived reliabilit y, and then average propert ies have been determ ined for these intervals with the applicat ion of cut -offs.

The ident ified potent ial pay intervals are listed in Table 2.6 where Grade 1 ( fill: ) is considered “definite” (corresponding to the perforated intervals that are, or have been, producing) ; Grade 2 ( fill: ) is considered “quite likely” and Grade 3 (no fill) is considered “possible” but is subject to a fair degree of uncertainty from the log response. Where no grade is given it corresponds to an interval ident ified by the operator as possible pay, but is not confirmed as such by this evaluat ion.

Two sets of cut -offs have been used:

1) Vsh < = 40% , Porosity > = 8% and Sw < = 45% (see Table 2.7)

2) Vsh < = 40% , Porosity > = 5% and Sw < = 70% (see Table 2.8)

I t is found that for many of the addit ional intervals ident ified as being possible pay are not classed as such by using the first set of cut -offs, but are with the second set . The summaries that are given in Table 2.7 and Table 2.8 correspond to the intervals ident ified in Table 2.6.

Wells Sorochynska-111 and Sorochynska-114 are considered to have no pay intervals. The operator considered well Sorochynska-113 to be water bearing, but on the basis of the log evaluat ion it is considered that there may be some intervals that have some potent ial, although there is uncertainty on the porosity that requires m ost of the intervals be considered as only possible.



W ell Grade I nterva l Top

( m MD) Base

( m MD) Com m ent

Sor-108

- B-15 4242.0 4242.6 Not considered as pay; selected as thin bed pay by Hawkley

3 B-15 4267.5 4277.5 Thin beds - porosity could be erroneous; selected as thin bed pay by Hawkley

2 B-16 4440.0 4450.0 Selected as bypassed pay by Hawkley


3 B-18 Upper 4525.0 4550.0 High Sw in m iddle of interval; selected as bypassed pay by Hawkley

2 B-19 Upper 4667.0 4675.5 Selected as bypassed pay by Hawkley

2 B-19 Upper 4681.5 4684.5 Selected as thin bed pay by Hawkley

3 B-19 Upper 4691.0 4697.0 Thin beds - porosity and/ or Sw could be erroneous

2 B-19 Lower 4702.0 4724.0 Part selected as bypassed pay by Hawkley

Sor-109

3 B-16 3724.0 3765.0 Thin beds - porosity could be erroneous

2 B-19 Upper 3800.0 3820.0 Selected as bypassed pay by Hawkley

2 B-19 Lower 3828.0 3850.0 Selected as bypassed pay by Hawkley


Sor-110

1 B-18 Upper 4122.0 4140.0 Perforated I nterval

3 B-18 Lower 4158.0 4186.0 Thin beds - porosity could be erroneous; selected as thin bed pay by Hawkley

3 B-19 Upper 4253.0 4267.0 Thin beds - porosity and/ or Sw could be erroneous

3 B-19 Lower 4286.0 4304.0 Porosity could be erroneous; selected as bypassed pay by Hawkley

Sor-111

No pay intervals

Sor-112

2 B-16 3911.0 3920.0

2 B-18 Lower 4033.5 4048.0 Selected as bypassed pay by Hawkley

2 B-18 Lower 4056.5 4063.5 Part selected as thin bed pay by Hawkley

- B-18/ 19 4088.0 4101.0 Selected as bypassed pay by Hawkley

- B-19 4151.0 4162.0 Selected as bypassed pay by Hawkley

Sor-113

2 B-16 4069.0 4077.0

3 B-16 4080.0 4187.0 Thin beds - porosity could be erroneous

3 B-18 Upper 4239.0 4245.0 Porosity could be erroneous

3 B-18 Lower 4288.0 4303.0 Porosity could be erroneous

Sor-114

No pay intervals

Sor-120

3 B-19 Upper 4083.5 4095.0 Porosity could be erroneous

3 B-19 Lower 4110.0 4125.0 Porosity could be erroneous; selected as bypassed pay by Hawkley

Sor-201 1 B-18 Upper 4065.0 4077.0 Perforated I nterval

3 B-18 Lower 4103.0 4111.0 Porosity could be erroneous

(Table 2.6 cont inues on next page)



W ell Grade I nterva l Top

( m MD) Base

( m MD) Com m ent

Sor-202 3 B-18 Upper 4042.0 4046.0 Thin beds

2 B-18 Lower 4057.7 4081.0 Sand from 4085m - 4092m potent ially water bearing

2 B-19 Upper 4152.0 4173.0

2 B-19 Lower 4186.7 4196.0 Sand from 4197m - 4209m potent ially water bearing (HCWC at 4202m)

Sor-469 3 B-17 3975.0 3980.0 Thin beds - porosity could be erroneous

1 B-18 Upper 4001.0 4007.0 Perforated I nterval

1 B-18 Lower 4012.5 4020.0 Perforated I nterval

2 B-18 Lower 4020.0 4025.0 Part selected as thin bed pay by Hawkley

2 B-19 Upper 4118.0 4121.0

Table 2 .6 : Sorochynska w ells – possible pay interva ls

The recent ly dr illed well Sorochynska-202 has also been included and shows potent ial pay in the B-18 and B-19 sands ( in both intervals there is an Upper and Lower sand, see Table 2.6) . However, the resist ivity data in the sect ion from 4085m – 4093m shows that the bot tom part of the B-18 Lower sand is likely to be at or close to a hydrocarbon-water contact , and hence has not been included as potent ial pay. Sim ilar ly for the sect ion from 4192m – 4210m in the bot tom part of the B-19 Lower Sand it is considered likely that there is a hydrocarbon-water contact and hence none of this interval has been included as potent ial pay.

The above discussion relates to the sandstone intervals only and does not include the B-24 carbonate interval and below. Wells Sorochynska-108 to Sorochynska-120 (excluding -111 and -114) had had tests conducted within this interval, although only wells Sorochynska-108, -110 and -120 produced gas at low flow rates; the other tests either had no flow or flowed gaseous drilling fluid/ format ion water. The available log data for well Sorochynska-120 was such that no sensible est imate could be made of the reservoir propert ies over the tested interval, but for the other two wells potent ial pay intervals can be ident ified and the reservoir propert ies of these are given in Table 2.9.

A full set of elect ronic CPI plots of all the wells reviewed from the Sorochynska area are available; these plots generally extend from above the B-10 interval down to TD. As a result they are too large to include within the format of this text docum ent , but they have been included as individual pdf files in an annex folder to the elect ronic version of the report .



W ell Nam e

I nterva l Top

Depth ( m MD)

Bot tom Depth

( m MD)

Gross I nterva l ( m TVD)

Net Res I nt

( m TVD)

Res/ Gross Rat io

Avg Phi

( Res)

Avg Net Sw

( Res)

Net Pay I nt

( m TVD)

Pay/ Gross Rat io

Avg Phi

( Pay)

Avg Net Sw

( Pay)

Sor-108

B-15 4267.5 4277.6 10.2 5.0 0.49 0.110 0.601 0.6 0.06 0.094 0.422

B-16 4440.0 4449.9 10.1 8.7 0.86 0.132 0.500 2.7 0.27 0.166 0.340

B-16 4469.0 4474.0 5.2 1.7 0.32 0.110 0.382 1.1 0.21 0.110 0.311

B-18 Upr 4525.1 4550.1 25.1 19.7 0.78 0.119 0.542 6.6 0.26 0.119 0.378

B-19 Upr 4666.9 4675.5 8.7 4.4 0.51 0.101 0.362 4.1 0.47 0.102 0.352

B-19 Upr 4681.6 4684.5 3.0 1.1 0.35 0.113 0.338 1.1 0.35 0.113 0.338

B-19 Upr 4691.0 4697.0 6.1 0.9 0.15 0.088 0.431 0.8 0.13 0.087 0.424

B-19 Lwr 4702.0 4723.9 22.1 4.6 0.21 0.094 0.417 3.4 0.15 0.097 0.396

Sor-109

B-16 3724.0 3765.0 41.1 17.4 0.42 0.101 0.455 10.8 0.26 0.105 0.371

B-19 Upr 3799.9 3820.1 20.3 8.7 0.43 0.104 0.291 8.7 0.43 0.104 0.291

B-19 Lwr 3828.0 3849.9 22.1 11.1 0.50 0.101 0.454 6.1 0.28 0.100 0.327

B-22 4059.0 4085.5 26.7 11.4 0.43 0.096 0.389 10.2 0.38 0.097 0.378

Sor-110

B-18 Upr 4122.0 4139.9 18.1 9.9 0.55 0.113 0.258 9.9 0.55 0.113 0.258

B-18 Lwr 4157.9 4186.0 28.2 0.3 0.01 0.093 0.494 0.0 0.00 0.000 1.000

B-19 Upr 4253.0 4267.0 14.2 0.2 0.01 0.081 0.325 0.2 0.01 0.081 0.325

B-19 Lwr 4285.9 4303.9 18.1 6.9 0.38 0.091 0.497 1.7 0.09 0.096 0.409

Sor-112

B-16 3920.0 3911.0 1.8 0.2 0.09 0.440 1.067 0.1 0.09 0.396 0.396

B-18 Lwr 4048.0 4033.6 4.7 0.3 0.09 0.433 2.896 0.2 0.09 0.401 0.401

B-18 Lwr 4063.4 4056.4 0.0 0.0 0.00 1.000 0.000 0.0 0.00 1.000 1.000

Sor-113

B-16 4068.9 4077.0 8.2 3.7 0.44 0.113 0.492 1.8 0.22 0.106 0.380

B-16 4080.1 4187.0 107.1 10.5 0.10 0.104 0.448 5.5 0.05 0.110 0.371

B-18 Upr 4239.0 4245.0 6.1 4.0 0.65 0.097 0.521 0.3 0.05 0.106 0.440

B-18 Lwr 4287.9 4303.0 15.2 0.0 0.00 0.000 1.000 0.0 0.00 0.000 1.000

Sor-120

B-19 Upr 4083.5 4095.0 11.6 2.0 0.17 0.128 0.312 1.3 0.11 0.151 0.257

B-19 Lwr 4110.0 4125.0 15.1 6.6 0.44 0.094 0.484 2.4 0.16 0.099 0.392

Sor-201

B-18 Upr 4065.0 4077.0 12.2 9.4 0.78 0.133 0.123 9.4 0.78 0.133 0.123

B-18 Lwr 4103.1 4111.0 8.1 2.1 0.26 0.097 0.351 1.5 0.19 0.099 0.280

Sor-202

B-18 Upr 4042.0 4046.0 4.1 0.3 0.07 0.097 0.223 0.3 0.07 0.097 0.223

B-18 Lwr 4057.7 4081.0 23.4 6.9 0.30 0.101 0.314 5.2 0.22 0.102 0.254

B-19 Upr 4152.0 4173.0 21.1 2.5 0.12 0.107 0.166 2.5 0.12 0.107 0.166

B-19 Lwr 4186.7 4196.0 9.4 4.2 0.45 0.100 0.200 3.8 0.40 0.101 0.170

Sor-469

B-17 3975.0 3980.0 5.2 0.6 0.12 0.126 0.185 0.6 0.12 0.126 0.185

B-18 Upr 4001.0 4007.0 6.2 2.2 0.36 0.096 0.127 2.2 0.36 0.096 0.127

B-18 Lwr 4012.4 4020.0 7.8 3.0 0.39 0.087 0.266 2.6 0.33 0.087 0.232

B-18 Lwr 4020.0 4025.0 5.2 1.0 0.19 0.113 0.135 1.0 0.19 0.113 0.135

B-19 Upr 4118.0 4121.0 3.2 0.6 0.19 0.103 0.210 0.6 0.19 0.103 0.210

Table 2 .7 : Sorochynska - pay interva l prop er t ies using porosit y > = 8 % and Sw < = 4 5 %



W ell Nam e

I nterva l Top

Depth ( m MD)

Bot tom Depth

( m MD)


Net Res I nt

( m TVD)

Res/ Gross Rat io

Avg Phi

( Res)

Avg Net Sw

( Res)

Net Pay I nt

( m TVD)

Pay/ Gross Rat io

Avg Phi

( Pay)

Avg Net Sw

( Pay)

Sor-108

B-15 4267.5 4277.6 10.2 9.0 0.88 0.091 0.621 6.6 0.64 0.097 0.564

B-16 4440.0 4449.9 10.1 8.8 0.88 0.131 0.502 7.8 0.77 0.133 0.459

B-16 4469.0 4474.0 5.2 2.0 0.38 0.103 0.402 1.8 0.35 0.106 0.379

B-18 Upr 4525.1 4550.1 25.1 22.4 0.89 0.112 0.545 18.9 0.75 0.111 0.492

B-19 Upr 4666.9 4675.5 8.7 6.6 0.75 0.089 0.405 6.6 0.75 0.089 0.405

B-19 Upr 4681.6 4684.5 3.0 1.2 0.40 0.106 0.355 1.2 0.40 0.106 0.355

B-19 Upr 4691.0 4697.0 6.1 2.3 0.38 0.072 0.461 2.3 0.38 0.072 0.461

B-19 Lwr 4702.0 4723.9 22.1 12.0 0.55 0.079 0.463 12.0 0.55 0.079 0.463

Sor-109

B-16 3724.0 3765.0 41.1 30.0 0.73 0.086 0.491 26.2 0.64 0.087 0.451

B-19 Upr 3799.9 3820.1 20.3 11.0 0.54 0.096 0.298 11.0 0.54 0.096 0.298

B-19 Lwr 3828.0 3849.9 22.1 15.7 0.71 0.092 0.450 13.7 0.62 0.093 0.387

B-22 4059.0 4085.5 26.7 18.1 0.68 0.086 0.412 18.1 0.68 0.086 0.412

Sor-110

B-18 Upr 4122.0 4139.9 18.1 12.8 0.71 0.102 0.274 12.8 0.71 0.102 0.274

B-18 Lwr 4157.9 4186.0 28.2 5.6 0.20 0.060 0.587 5.0 0.18 0.061 0.570

B-19 Upr 4253.0 4267.0 14.2 2.1 0.15 0.064 0.459 2.1 0.15 0.064 0.459

B-19 Lwr 4285.9 4303.9 18.1 15.4 0.85 0.076 0.524 15.2 0.84 0.077 0.522

Sor-112

B-16 3911.0 3920.0 9.1 2.7 0.30 0.084 0.470 2.7 0.30 0.084 0.470

B-18 Lwr 4033.6 4048.0 14.6 12.2 0.83 0.075 0.512 10.5 0.72 0.078 0.482

B-18 Lwr 4056.4 4063.4 7.2 4.1 0.57 0.060 0.426 4.1 0.57 0.060 0.426

Sor-113

B-16 4068.9 4077.0 8.2 5.3 0.65 0.099 0.499 5.2 0.63 0.099 0.489

B-16 4080.1 4187.0 107.1 16.5 0.15 0.090 0.489 14.9 0.14 0.093 0.470

B-18 Upr 4239.0 4245.0 6.1 6.1 1.00 0.088 0.561 5.5 0.90 0.090 0.541

B-18 Lwr 4287.9 4303.0 15.2 5.5 0.36 0.060 0.510 5.5 0.36 0.060 0.510

Sor-120

B-19 Upr 4083.5 4095.0 11.6 3.7 0.32 0.096 0.427 2.5 0.22 0.116 0.339

B-19 Lwr 4110.0 4125.0 15.1 11.2 0.74 0.082 0.560 8.5 0.56 0.088 0.503

Sor-201

B-18 Upr 4065.0 4077.0 12.2 10.1 0.83 0.129 0.127 10.1 0.83 0.129 0.127

B-18 Lwr 4103.1 4111.0 8.1 5.6 0.70 0.079 0.442 4.7 0.59 0.080 0.388

Sor-202

B-18 Upr 4042.0 4046.0 4.1 0.4 0.10 0.090 0.233 0.4 0.10 0.090 0.233

B-18 Lwr 4057.7 4081.0 23.4 11.5 0.49 0.087 0.342 11.4 0.49 0.087 0.339

B-19 Upr 4152.0 4173.0 21.1 3.9 0.19 0.093 0.186 3.9 0.19 0.093 0.186

B-19 Lwr 4186.7 4196.0 9.4 7.1 0.76 0.086 0.244 7.0 0.75 0.087 0.239

Sor-469

B-17 3975.0 3980.0 5.2 0.6 0.12 0.126 0.185 0.6 0.12 0.126 0.185

B-18 Upr 4001.0 4007.0 6.2 3.4 0.55 0.087 0.142 3.4 0.55 0.087 0.142

B-18 Lwr 4012.4 4020.0 7.8 6.8 0.87 0.078 0.249 6.8 0.87 0.078 0.249

B-18 Lwr 4020.0 4025.0 5.2 1.6 0.31 0.092 0.164 1.6 0.31 0.092 0.164

B-19 Upr 4118.0 4121.0 3.2 1.0 0.31 0.088 0.245 1.0 0.31 0.088 0.245

Table 2 .8 : Sorochynska - pay interva l prop er t ies using porosit y > = 5 % and Sw < = 7 0 %



W ell Nam e

I nterva l Top

Depth ( m MD)

Bot tom Depth

( m MD)


Net Res I nt

( m TVD)

Res/ Gross Rat io

Avg Phi

( Res)

Avg Net Sw

( Res)

Net Pay I nt

( m TVD)

Pay/ Gross Rat io

Avg Phi

( Pay)

Avg Net Sw

( Pay)

Sor-108

B-24 5241.0 5247.0 6.1 4.7 0.78 0.084 0.496 4.1 0.68 0.086 0.463

Sor-110

B-24 4922.5 4926.5 4.1 4.1 1.00 0.100 0.437 3.5 0.85 0.104 0.372

Table 2 .9 : Sorochynska - pay interva l proper t ies fo r carbonate sect ion using porosity > = 5 % and Sw < = 7 0 %

2.5. Sorochynska B-18 Pet rel Model

A 3D geological m odel was const ructed using Pet rel geocellular m odelling software. The basic data (coordinates, KB and deviat ion survey) were exported from the existed Kingdom project and loaded into Pet rel. Correlated format ion tops were provided by Hawkley Oil & Gas. Depth converted seism ic horizons for Top B-18 Upper and Base B-18 Lower were interpreted in Kingdom project and imported into Pet rel along with Min Seism ic at t r ibute m ap for B-18 form at ion. The input surfaces were t ied to the wells, an interm ediate surface Base B-18 Upper and Top B-18 Lower was const ructed from the well isochore.

Vclay, porosity and Sw logs were derived from pet rophysical interpretat ion to enable the dist r ibut ion of reservoir parameters. Facies and N/ G logs were calculated in Pet rel using the Vclay and porosity cut -off.

The m odel was const ructed with the following elem ents:

Facies (shale, sand, silt )

Net / gross rat io (using a Vclay & Phie cut -off)

Effect ive porosity

GI I P est im ates were derived for three cases (Low, Mid, and High) across three sub-areas (East , Cent ral, and West ) defined by the well data and the am plitude m aps described above. The results are summarised in Table 2.10 below (note that these GI I P est imates are provisional, and subject to revision once the latest pressure measurements from Sor-201 are received) .



Reservoir Segm ent Pet re l m odel

Low Case Mid Case H igh Case

B-18 Upper

East (Sor-110, Sor-201, Sor-202)* 16 28 40*

Cent ral (Sor-469, Sor-113)* 1.0 3.0 5

West (Sor-112)* 2.0 6 10

B-18 Lower

East (Sor-110, Sor-201, Sor-202) 5 8 11

Cent ral (Sor-469, Sor-113) 1.0 3.0 5.0

West (Sor-112) 0.1 1.0 3.0

Total B-18

Upper# 19 37 50

Total B-18 Lower#

6 12 16

Tota l for f ie ld#

2 5 4 9 6 6

Table 2 .1 0 : Sorochynska B- 1 8 – GI I P est im ates

Note: * high uncertainty in est im ate, # totals derived by arithmet ic summat ion

2.5.1. Pet rel Database

The results of the seism ic interpretat ion and pet rophysical analysis were brought together in Pet rel to build a 3D geological model of the B-18 unit .

These data are given below:

Basic well data for 11 wells:

- X,Y - coordinates,

- KB

- Deviat ion survey

- Tops

Seism ic depth surfaces:

- Top B-18 upper depth grid

- Base B-18 lower depth grid

- B-18 Min am plitude gt id

Pet rophysical interpreted logs:

- Vclay (VSH)

- Effect ive Porosity ( PHI E)

- PAY70

- PAYFLAG

- RESFLAG

- SW



Figure 2 .2 1 : W ells used in Pet re l m odel of B- 1 8 uni t

2.5.2. Well correlat ion

A well correlat ion was provided by Hawkley Oil & Gas, from which the key well tops were imported into Pet rel project . The tops correlated were Top B-18 Upper, Base B-18 Upper, Top B-18 Lower and Base B-18 Lower.

The well tops used in the model are given in Table 2.11 below:



W ell Nam e Depths in m TVDss

B- 1 8 _ Upper B- 1 8 _ Upper_ Base B- 1 8 _ Low er B- 1 8 _ Low er_ Base

Sorochynskaya-108 4399.21 4416.42 4426.46 4448.11

Sorochynskaya-110 4014.34 4026.19 4033.76 4075.23

Sorochynskaya-111 3758.86 3774.4 3782.62 3805.09

Sorochynskaya-112 3904.47 3922.81 3928.03 3963.55

Sorochynskaya-113 4124.12 4130.83 4136.11 4193.97

Sorochynskaya-114 4413.35 4450.39 4459.73 4477.95

Sorochynskaya-120 3845.87 3850.08 3856.83 3890.52

Sorochynskaya-201 3950.24 3961.53 3967.19 4000.33

Sorochynskaya-202 3920.62 3930.7 3940.91 3979.16

Sorochynskaya-469 3891.12 3901.71 3907.27 3951.17

Table 2 .1 1 : Corre la t ion tops Sorochynska B- 1 8 Pet r e l study

The B-18 reservoir com prises of a fluvial deposit consist ing of sandstone and siltstone with inter-bedded m udstone, and is divided into two units; B-18 Upper and B-18 Lower, of which the B-18 Upper is m ore sandy. Both units consist of light gray to dark gray, fine - to coarse grained sandstone. The average gross thickness ivaries within the area: B-18 Upper zone from 4.2m to 37m and B-18 Lower zone from 18.2m to 58m (see Figure 2.22 below) .

Figure 2 .2 2 : Sorochynska w ell corre la t ion through S or- 1 1 0 and Sor- 2 0 1



2.5.3. St ructure Model

2.5.3.1. Pillar gridding, Horizons and Zones

The seism ic interpretat ion and depth conversion have been undertaken by AGR. Surfaces: Top B-18 Upper and Base B-18 Lower were loaded into the project and flexed to correct ly t ie at the well locat ions using the Make Horizon Pet rel m odule. The interm ediate Base B-18 Upper and Top B-18 Lower reservoir surfaces were const ructed in Pet rel from the isochore in the wells.

A skeleton grid, aligned along a north - south axis, was created using these surfaces and along grid cell boundaries. The size of the grid cells is 100x100m (see Figure 2.23) .

The layering schem e was totalled 30 layers based on the subdivision of the well data (Table 2.12) . Layers were built using proport ional zone division m ethod, with a typical thickness of about 2m per layer within the reservoir zones.

Figure 2 .2 3 : Gr id skeleton from Sorochynska B- 1 8 Pe t re l m odel



Reservoir Zone

division Num ber of

layers

B-18 Upper Proport ional 10

shale Proport ional 1

B-18 Lower Proport ional 19

Table 2 .1 2 : Sorochynska B- 1 8 Pet re l m o del layer ing schem e ( ~ 2 m / layer)

The Top B-18 Upper and Top B-18 Lower reservoir unit depth m aps are shown in Figure 2.24 and Figure 2.25 respect ively.

Figure 2 .2 4 : Sorochynska Top B- 1 8 Upper re servoir depth m ap used in Pet re l m odel



Figure 2 .2 5 : Sorochynska Top B- 1 8 Low er reservoir d epth m ap used in Pet re l m odel

2.5.4. Gas-Water Contacts

A review of the potent ial gas-water contacts based on well test and log data was used to define low, m id and high cases.

The various contacts were applied to different part of the field. Using the pressure data from the supplied inform at ion the field was divided into three segm ents: a Western segm ent (well Sor-112) , a Cent ral segment (wells Sor-469 and Sor-113) and an Eastern segm ent (wells Sor-110, Sor-201 and Sor-202) , see Figure 2.26 and Figure 2.27. The volumetr ic cases were further rest r icted by polygons defined on the basis of seism ic amplitude data.

The contacts used in the model are listed in Table 2.13 below:



Case Segm ent Reservoir Contact

( m TVDss)

Low

Cent ral (Sor-469, Sor-113) B-18 Upper 3900

B-18 Lower 3918

East (Sor-110, Sor-201, Sor-202) B-18 Upper 4036

B-18 Lower 3995

Mid

West (Sor-112) B-18 Upper

3907 B-18 Lower


B-18 Lower 3918


B-18 Lower 3995

High East (Sor-110, Sor-201, Sor-202) B-18 Upper

4066.3 B-18 Lower

Table 2 .1 3 : Gas- w ater contacts used in Sorochynska B- 1 8 Pet re l m odel



Figure 2 .2 6 : East area - cross- sect ions illu st ra t ing Low / Mid and High case contacts



Figure 2 .2 7 : Cent ra l and W est areas - cross- sect ion s illust ra t ing contacts



2.5.5. Property m odelling

Vclay, porosity and Sw logs were im ported to enable the dist r ibut ion of reservoir param eters. Facies log was calculated from Vclay cut -off. Net to Gross log is based on the Vclay and Phie cut -off. Each property was subsequent ly up-scaled from the 0.1 m input curve data points to determ ine an up-scaled averaged param eter in each layer at all wells (see Figure 2.28) . The calculated SW log is not reliable enough to derive Sw-height funct ion and it was not used in the model; instead the average Sw values from the pet rophysical interpretat ion were used to calculate GI I P.

Figure 2 .2 8 : Sorochynska B- 1 8 unit - up- s ca led and pet rophysica l analysis logs

2.5.5.1. Variograms

Variograms for facies dimensions and orientat ions were determ ined by AGR-TRACS using the distance between the wells and seism ic m in amplitude map (Figure 2.29 and Table 2.14) . The sam e variogram was used to dist r ibute facies and pet rophysical propert ies (N/ G and porosity) . The variogram s for the B-18 interval were kept constant throughout the m odelling process.



Figure 2 .2 9 : Sorochynska B- 1 8 interva l se ism ic m in am plitude m ap

Zone Property Up-scaling method Major dir Minor dir Vertical Az

B-18 Upper Facies m ost of 2300 1300 3 44

shale Facies m ost of constant value ( shale)

B-18 Lower Facies m ost of 2300 1300 3 44

Table 2 .1 4 : Sorochynskaya B- 1 8 interva l var iogram range for facies m odelling

The pet rophysical propert ies were created inside the facies, but with the sam e variogram range in each case (Table 2.15) :



Zone Proper ty Up- sca ling

m ethod Facies Major dir Minor dir Ver t ica l Az

B- 1 8 Upper

N/ G arithmet ic

sand 2300 1300 3 44

silt 2300 1300 3 44

shale constant value = 0

PHI E arithmet ic

sand 2300 1300 3 44

silt 2300 1300 3 44

shale constant value= 0

B- 1 8 Low er

N/ G arithmet ic

sand 2300 1300 3 44

silt 2300 1300 3 44


PHI E arithmet ic

sand 2300 1300 3 44

silt 2300 1300 3 44


Table 2 .1 5 : Sorochynskaya B- 1 8 var iogram range for proper ty m odelling

2.5.5.2. Facies Model

Due to the lack of data ( there were no detailed core descript ion or biost rat / sedimentology report provided) , the simple facies model was build. The definit ions were based on the Vclay cut -off and the log was calculated in all wells:

The follow litho- types were defined:

sand Vclay < = 20%

silt 20% < Vclay< = 60%

shale Vclay > 60%

The log was up-scaled with the dom inant lithology (m ost of) assigned to each cell and dist r ibuted for the two reservoirs throughout the field. The sand dist r ibut ion probability map was const rained from the seism ic m in amplitude map and used as a t rend for sand dist r ibut ion (see Figure 2.30) . The SI S algor ithm (Sequent ial I ndicator Sim ulat ion) was used to run a dist r ibut ion. However, there is a high level of uncertainty present in the model for the sand and silt dist r ibut ion.



Figure 2 .3 0 : B- 1 8 facies dist r ibut ion through Sor- 2 0 2 , Sor- 2 0 1 and Sor- 1 1 0

2.5.5.3. Net -Gross

A net reservoir flag ( N/ G)was created using the Vclay and Porosity cut -off:

Vclay< = 40% and Phie> = 8%

The net to gross property was up-scaled with the arithm et ic m ethod to produce a net / gross rat io for each cell and dist r ibuted through the m odel within each lithology type using the Gaussian random funct ion simulat ion algorithm (see Figure 2.31) .



Figure 2 .3 1 : Sorochynska B- 1 8 – N / G sect ion through Sor- 2 0 2 , Sor- 2 0 1 and Sor- 1 1 0

2.5.5.4. Effect ive porosity

Effect ive porosity (PHI E) was up-scaled using the arithm et ic m ethod and then dist r ibuted inside the facies with Gaussian random funct ion sim ulat ion algorithm (see Figure 2.32 and Figure 2.33) .



Figure 2 .3 2 : Cross- sect ion through Sor- 2 0 2 , Sor- 2 0 1 and Sor- 1 1 0 illust ra t ing effect ive porosit y ( PHI E) dist r ibut ion

Note: yellow/ orange represent highest values

Figure 2 .3 3 : Sorochynska B- 1 8 – effect ive porosit y h istogram



2.5.5.5. SW Model

The calculated SW log is not reliable enough to derive Sw-height funct ion and it was not used in the model direct ly. The average Sw values from the pet rophysical interpretat ion were used to calculate GI I P.

The Sw values used in the model are given in Table 2.16 below for each reservoir:

Segm ent Reservoir Sw ,%


B-18 Lower 43


B-18 Lower 31

West (Sor-112) B-18 Upper

48 B-18 Lower

Table 2 .1 6 : Sorochynskaya Fie ld Sw average va lue

2.6. I n-Place Volum et ric Est im ates

2.6.1. B-18 Reservoir

Due to the lack of data cont rol and data quality there are some uncertaint ies in the Pet rel model. A brief descript ion of these uncertaint ies is provided in Table 2.17 below:

Uncerta inty I m pact on STOI I P Com m ents

Structure H/ L Moderate St rat igraphic t raps, lateral extent (not st ructural

t rap) , depth conversion Sand proport ion

and extent High

Am plitudes suggest sand, but detailed sand proport ion is uncertain. Modelled using facies.

Silt extent High Am plitudes show widespread silt dist r ibut ion, but silt extension and proport ion is uncertain.

GWC definit ion Low Uncertain areal extent from the wells.

Sw calculat ion High Sw- log is not reliable due to data quality.

Table 2 .1 7 : Sorochynska Fie ld uncer ta inty in the m o del



GI I P was determ ined direct ly from the Pet rel m odel, and the GI I P est im ates for each of the three reservoir areas were calculated for low, m id and high cases, as summarised in below:

Reservoir Segm ent Pet re l m odel

Low Case Mid Case H igh Case

B-18 Upper

East (Sor-110, Sor-201, Sor-202)* 16 28 40*

Cent ral (Sor-469, Sor-113)* 1.0 3.0 5

West (Sor-112)* 2.0 6 10

B-18 Lower

East (Sor-110, Sor-201, Sor-202) 5 8 11

Cent ral (Sor-469, Sor-113) 1.0 3.0 5.0

West (Sor-112) 0.1 1.0 3.0

Total B-18

Upper# 19 37 50

Total B-18 Lower#

6 12 16

Tota l for f ie ld#

2 5 4 9 6 6

Table 2 .1 8 : Sorochynska B- 1 8 GI I P est im ates

Note: * high uncertainty in est im ate, # totals derived by arithmet ic summat ion


To est im ate the volum es in place for the B-19 reservoir, ranges of gross rock volum e (GRV) , net / gross, porosity and water saturat ion (Sw) were defined for the B-19 interval as a whole. The B-19 sand has been divided into an Upper and Lower layer but these can’t be dist inguished on the seism ic data so for the purposes of this volum etr ic est im at ion, the sand has been considered as one unit and the propert ies averaged over the whole interval.

For the B-19 sand three areas have been ident ified using polygons to define the lim its of the sand around the wells. These are shown in Figure 2.11 above. The GRV was est im ated using each of these polygons that represent the possible extent of the sand body. The Gas-Down-To (GDT) was used to lim it the extent of the hydrocarbons and in order to define a range this value was varied by + / - 20% to reflect the uncertainty in the mapping of this horizon.

The param eter ranges for net / gross, porosity and Sw were based on the well data and a range was applied. A range of Gas Expansion Factors based on the available well data were also defined.

These dist r ibut ions were input into Crystal Ball for Monte Carlo analysis and used for the calculat ion of unrisked GI I P.

The results of the B-19 volum etric evaluat ions are shown in Table 2.19 below:



Probabilist ic Volum es Est im ated GI I P ( bcf)

Reservoir Aera Assum ed GDT

( m TVDSS) P9 0 P5 0 P1 0 Mean

108 area 4725 19.1 31.4 49.3 33.0

496, 110, 120 area 4309 26.4 88.0 165.4 93.3

109 area 3850 12.9 20.6 30.5 21.2

TOTAL* - 7 8 .5 1 4 2 .8 2 2 2 .2 1 4 7 .5

Table 2 .1 9 : Sorochynska B- 1 9 GI I P ranges ( 1 0 0 % )

* Note: the total GI I P est im ates are probabilist ic sum m at ions.


To est im ate the volum es in place for the B-24 reservoir, ranges of gross rock volum e (GRV) , net / gross, porosity and water saturat ion (Sw) were defined for the B-24 interval. The log data suggests that the pay zone is different in the wells that have discovered hydrocarbons. I n the Sorochynska-108 well, the pay zone is at the top of the B-24 interval whereas in the Sorochynska-110 the pay zone is at the base (Figure 2.16 above) .

For the B-24 reservoir two areas have been ident ified using polygons to define the lim its of the porous reservoir around the wells. These are shown in Figure 2.17 and Figure 2.18 above. The GRV was est imated using these polygons. The Gas-Down-To (GDT) was used to define the m inim um extent of the hydrocarbons and a contact that corresponds to the deepest part of the polygon was used in order to define a range this value.

The param eter ranges for net / gross, porosity and Sw were based on the well data and a range was applied. A range of Gas Expansion Factors based on the available well data were also defined.

These dist r ibut ions were input into Crystal Ball for Monte Carlo analysis and used for the calculat ion of unrisked GI I P.

The result of the B-24 volumet r ic evaluat ion is shown in Table 2.19 below:

Probabilist ic Volum es Est im ated GI I P ( bcf)

Reservoir Aera Assum ed GDT range

( m TVDSS) P9 0 P5 0 P1 0 Mean

108 area 5120 – 5300 0.4 1.4 4.5 2.1

110 area 4815 – 5000 7.1 9.6 12.9 9.8

TOTAL* - 8 .4 1 1 .4 1 5 .9 1 1 .9

Table 2 .2 0 : Sorochynska B- 2 4 GI I P ranges ( 1 0 0 % )

* Note: the total GI I P est im ates are probabilist ic sum m at ions.



3. Sorochynska Reservoir Engineering Review

TRACS was requested to m ake an est im ate of recoverable resources and product ion profiles for Hawkley’s Sorochynska licence in Ukraine. Only one well (Sor-201) was producing at the reference point for this report (30 th June 2013) . No further plans for development drilling are current ly under considerat ion by Hawkley, but a com pressor with m inim um intake pressure of 20atm (294psia) is scheduled to be installed at the wellhead of well Sor-201 and expected to be operat ional on 1st March 2014.

I n this sect ion the reservoir engineering aspects for the in-place volumet r ic calculat ions will be presented, along with a review of the Sorochynska developm ent history. Furtherm ore, the assum pt ions for the forward product ion forecasts for well Sor-201 will be explained.

3.1.1. Sorochynska gas form at ion volum e factors

The gas format ion volume factors for the in-place volumet r ic calculat ions were der ived based on informat ion provided to TRACS. Based on the informat ion available for Sorochynska (Tables 2.2 to 2.4 of the Sorochynska TEO) the gas density is ~ 0.84 with 72-76mol% of methane and a pentane plus content up to 3.9 m ol% . The condensate is light , yellow to brown in colour, with a density of 0.77-0.82 g/ cm 3 (42°-53° API ) . The init ial producing condesate-gas rat io (CGR) in wells 469, 110 and 210 ranged from 33 to 45 stb/ MMscf.

The analogue and product ion tests data was used to derive pressure and tem perature for required depth ranges. The Sorochynska reservoirs are found to be on a 0.47psi/ ft pressure gradient , thus the B-24-25 reservoirs are overpressured by approximately 600psi. The temperature gradient is est imated to be around 1.2degF/ 100ft (2.2degC/ 100m ) , see Figure 3.1. The gas com pressibilit y (z- factor) was com puted with Brill & Beggs (1974) correlat ion, and the gas form at ion volum e factors (Bg) were calculated for B-18, B-19 and B-24/ 25 reservoirs (see Table 3.1 below) .

Hor izon 1 / Bg Low , sm 3 / rm 3

1 / Bg Mid, sm 3 / rm 3

1 / Bg H igh, sm 3 / rm 3

B-18 269 299 329

B-19 272 303 333

B-24 291 323 356

Table 3 .1 : Sorochynska gas form at ion volum e factors for volum et r ic est im ates ( Monte Car lo)



Figure 3 .1 : Pressure and tem perature for Sorochynsk a

110

112201 469

469

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,0000 2,000 4,000 6,000 8,000 10,000 12,000

Depth, m

Pressure, psi

Pressure vs depth Sorochynskawells

tests

analogues Poltava

0.47, psi/ft hydr grad

hydr_B22-24

well 201 pre depleted?

110

469 201

0

1000

2000

3000

4000

5000

6000

7000

80000 100 200 300 400

Depth, m

Temperature, degF

Temperature vs depth Sorochynska

wells

1.2 degF per 100ft

2.2 degC per 100m

analogues Poltava



3.1.2. Product ion history and forecast for the B-18 reservoir

10 wells have been drilled to date on the Sorochynska licence (Table 3.2) . Gas and condensate was produced only from the Visean B-18 reservoir in Sorochynska. Wells 469 and 110 were on product ion from 1983 to 1991 sequent ially, and the recent well Sor-201 is now the only gas producer in 2013.

W ell Spud date Actual

depth, m Category

109 28.12.82 5609 explorat ion

110 10.07.87 5000 appraisal

111 16.10.83 5052 explorat ion

112 01.01.85 5020 appraisal

113 01.04.85 5006 explorat ion

114 26.08.84 5609 explorat ion

120 09.09.90 5013 appraisal

201 02.11.09 4125 appraisal

202 15.02.12 4050+ appraisal

469 29.06.81 4500 parametr ic

Table 3 .2 : Sorochynska w ell spud dates ( source: Sor ochynska TEO)

3.2. Well 469 perform ance analysis

Well 469 produced 4.6 BCF of gas and 117,000 stb of condensate from August 1983 to April 1988 before ceasing product ion. Product ion was from the B-18 Upper and Lower sandstones, and reservoir pressure declined by 75% from 6170 psi to 1614 psi by May 1987. The final gas rate was 0.138 MMscf/ d; most likely because the well could not produce any longer against surface pressures (Figure 3.2) . The CGR declined steadily as reservoir pressure decreased and water product ion was negligible (Figure 3.3) .

Analysis of the product ion data with p/ z plots suggest that well 469 was draining a somewhat isolated reservoir of approximately 6.68 BCF of gas–init ially- in-place (GI I P) , achieving a 69% recovery efficiency (Figure 3.4 and Figure 3.5) . The data for the p/ z analysis is listed in Table 3.3 below.



W ell Date Pressure

psi Tem p. ( 3 )

degF Gas SG ( 1 ) ( a ir= 1 )

z factor ( 2 ) p/ z Cum .

Prod. BCF

110

11-Aug-88 5,971 228 0.84 1.05 5,672 0.00

10-Jan-89 5,964 228 0.84 1.05 5,669 0.15

21-Apr-89 5,394 228 0.84 1.00 5,407 0.51

27-Sep-89 5,063 228 0.84 0.97 5,238 1.26

22-Jul-90 4,823 228 0.84 0.94 5,105 2.49

469

16-Aug-83 6,170 233 0.84 1.07 5,757 0.01

12-Oct -83 5,239 233 0.84 0.98 5,325 0.61

06-Feb-84 4,119 233 0.84 0.89 4,644 1.38

31-May-84 3,376 233 0.84 0.84 4,028 2.06

15-Aug-84 3,049 233 0.84 0.82 3,701 2.43

02-Nov-84 2,970 233 0.84 0.82 3,618 2.70

28-Feb-85 2,783 233 0.84 0.82 3,410 3.06

02-Apr-85 2,595 233 0.84 0.81 3,190 3.14

28-Jun-85 2,411 233 0.84 0.81 2,965 3.34

30-Sep-85 2,239 233 0.84 0.81 2,749 3.63

30-Dec-85 1,994 233 0.84 0.82 2,429 3.86

13-Mar-86 1,800 233 0.84 0.83 2,171 4.06

12-Jun-86 1,720 233 0.84 0.83 2,064 4.13

07-May-87 1,614 233 0.84 0.84 1,922 4.46

Sor-201

12-Nov-10 5,300 228 0.84 0.99 5,360 0

29-Mar-11 5,016 228 0.84 0.96 5,213 0.25

24-May-11 4,803 228 0.84 0.94 5,094 0.64

30-Oct -12 2,454 228 0.84 0.81 3,037 3.76

01-Nov-12 2,491 228 0.84 0.81 3,082 3.76

09-Mar-13 2,234 228 0.84 0.81 2,758 4.23

(1) Gas SG as an average from PVT tables for the 469/ 110/ sor-201 wells [ Table 2.3 Reservoir gas composit ion and propert ies (Source Table 2.3, page 46) ] (2) Compressibility z factor with Brill Beggs correlat ion (1974) (3) Temperature from Book 1, Table 9.1 (page 56) Ukrainian Reserves report . Average temperatures for wells 110 and Sor-201.

Table 3 .3 : Sum m ary of p/ z data for w ells 1 1 0 , 4 6 9 , and Sor- 2 0 1



Figure 3 .2 : Sorochynska - product ion history for w e ll 4 6 9

Figure 3 .3 : Sorochynska - CGR and GOR from w ell 4 6 9

ど

50

100

150

200

250

300

350

ど1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

10,000 Aug

ど83

Nov

ど83

Feb

ど84

May

ど84

Aug

ど84

Nov

ど84

Feb

ど85

May

ど85

Aug

ど85

Nov

ど85

Jan

ど86

May

ど86

Julど8

6

Octど8

6

Jan

ど87

Aprど87

Julど8

7

Octど8

7

Jan

ど88

Cond. rate, b/dgas rate, 10^3

scf/d

Pressure, psi

Well 469(B18どupper+lower)

Gas rate, 10^3 scf/d

Pressure, psi

Cond rate, stb/d

0

5

10

15

20

25

30

35

40

ど

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Aug

ど83

Nov

ど83

Feb

ど84

May

ど84

Aug

ど84

Nov

ど84

Feb

ど85

May

ど85

Aug

ど85

Nov

ど85

Jan

ど86

May

ど86

Julど8

6

Octど8

6

Jan

ど87

Aprど87

Julど8

7

Octど8

7

Jan

ど88

CGR, stb/MMscf

WGR, bbl/MMscfGOR, scf/stb


GOR, scf/stb

CGR, stb/MMscf

WGR, bbl/MMscf

Const waterどgas ratio, probably vapour water



Figure 3 .4 : Sorochynska w ell 4 6 9 - gas ra te vs. cum ulat ive gas product ion ( G p)

Figure 3 .5 : Sorochynska - p/ z plot for w ell 4 6 9

ど1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

10,000 0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

gas rate, 10^3 scf/d

Gp, MMscf



y = ど0.8781x + 5864.4

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

p/z

Gp, MMscf

P/z plot well 469469

6.7 bcf originally in place connected to well 469(4.6bcf Gp => RF ~68%



3.3. Well 110 perform ance analysis

Well 110 produced 3.1 BCF of gas and 132,000 stb of condensate from the B-18 Upper sandstone reservoir in the period from January 1989 to January 1991. During the two years of product ion, reservoir pressure dropped by ~ 1070 psi and gas product ion rates rem ained high in the ent ire period (see Figure 3.6 and Figure 3.7) . The condensate product ion m easurem ents were uncertain in the first year and som e increase in water product ion was observed (Figure 3.8) . I t was reported that well 110 was watered out ; however, this cannot be observed from product ion data. The updip well Sor-201 has been on product ion for 18 m onth and has yet to see any significant water increase, thus there is high chance that well 110 suffered a mechanical problem such as from ‘behind casing’ cross flow.

The GI I P for well 110 est im ated from p/ z data (Figure 3.9) is uncertain due to the relat ively lower drop in reservoir pressure, with est imates of 10 to 25 BCF of gas init ially in-place. The curving nature of the pressure points on the p/ z plot may be due to either pressure measurement error or addit ional energy in the system. Local knowledge suggests, though, that aquifer support in this geological set t ing is not likely which is confirmed by the low water product ion rates in wells 469, 110 and Sor-201. I f measurement error or an addit ional energy source has caused pressure points that are too high this may result in overly opt im ist ic GI I P est im ates based on p/ z analysis.

Figure 3 .6 : Sorochynska - product ion history for w e ll 1 1 0

ど

50

100

150

200

250

ど

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Sep

ど88

Dec

ど88

Aprど89

Julど8

9

Octど8

9

Jan

ど90

May

ど90

Aug

ど90

Nov

ど90

Marど91

Cond. rate, b/dgas rate, 10^3

scf/d

Res.pressure, psi

Well 110(B18どupper)

Gas rate, 10^3 scf/dPressure, psi

Cond rate, stb/d



Figure 3 .7 : Sorochynska w ell 1 1 0 - gas ra te vs. cum ulat ive gas product ion ( G p)

Figure 3 .8 : Sorochynska - CGR and GOR from w ell 1 1 0

ど500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

gas rate, 10^3 scf/d

Gp, MMscf

Well 110(B18どupper)


0

10

20

30

40

50

60

ど

5,000

10,000

15,000

20,000

25,000

30,000

Sep

ど88

Dec

ど88

Aprど89

Julど8

9

Octど8

9

Jan

ど90

May

ど90

Aug

ど90

Nov

ど90

Marど91

CGR, stb/MMscf

WGR, bbl/MMscf

GOR, scf/stb Well 110(B18どupper)

GOR, scf/stb

CGR, stb/MMscf

WGR, bbl/MMscf

Liquidsmeasurement started here?



Figure 3 .9 : Sorochynska - p/ z plot for w ell 1 1 0

3.4. Well Sor-201 perform ance analysis and forecast

3.4.1. Well 201 pressure t ransient analyses

The pressure t ransient analysis for well Sor-201 will be reviewed in this sect ion followed by product ion data review in the next sect ion. Forward product ion forecasts will be presented based on Decline Curve Analysis (DCA) methodology and cross-checked with the p/ z plot .

Pressure tests were recent ly carr ied out in well Sor-201 to determ ine reservoir pressure and confirm reservoir propert ies, with one test perform ed on 1st Nov. 2012 and another on 25 th Feb. 2013. Analyses of these tests were m ade by ODI N Reservoir consultants and TRACS, and a summary of the est im ated pressure and permeabilit y values is provided in Table 3.4 below.

Test Date ODI N

perm eabilit y, m D ODI N

pressure, psia TRACS

perm eabilit y, m D TRACS

pressure, psia

1-Nov-2012 76 2491 70-80 2477

25-Feb-2013 - - ~ 2234 - - - -

Table 3 .4 : Sor- 2 0 1 - perm eab ilit y and pressure from pressu re tests analyses by ODI N reservoir consultants and TRACS

0

1,000

2,000

3,000

4,000

5,000

6,000

0 5 10 15 20 25 30

p/z

Gp, bcf

P/z plot Sorochynska(well 110)



TRACS analysed the pressure buildup recorded in well Sor-201 on 1st Nov. 2012 using histor ic product ion data as rate history. The buildup pressure data was used to est im ate perm eability and current average reservoir pressure. Permeabilit y to gas was est im ated to be in the range of 70-80m D. The current reservoir pressure (P* ) as of 1st Nov. 2012 was ext rapolated to be ~ 2477 psi (168.5 atm ) . A m odel with a boundary (a one fault m odel) est im ated the distance to be 400-500ft (120-150m ) away from well Sor-201 (Figure 3.10 and Figure 3.11) . A one fault m odel is not unique, and a curving boundary or two leaking faults could produce sim ilar effects.

Figure 3 .1 0 : W ell Sor- 2 0 1 - pressure der ivat ive plo t

Figure 3 .1 1 : Schem at ic of Sorochynska B- 1 8 reservoir ( w ells 1 1 0 & Sor- 2 0 1 region)

gas producer



3.4.2. Well Sor-201 product ion data analysis

The product ion data from well Sor-201 was analysed. Well Sor-201 is located 250-300m updip from well 100, and started product ion in February 2011 from the B-18 Upper sandstone reservoir. Product ion to date (30 th June 2013) has been 4.58 BCF of gas and 143,700 barrels of condensate. The gas product ion rates, CGR and wellhead pressure (WHP) are declining steadily, while the water to gas rat io (WGR) is steady and below 5stb/ MMscf (Figure 3.12 and Figure 3.13) .

Figure 3 .1 2 : W ell Sor- 2 0 1 – B- 1 8 reservoir product i on history to 3 0 t h June 2 0 1 3

Figure 3 .1 3 : W ell Sor- 2 0 1 - m easured W HP and est im a ted BHP

2.7

20.3 2.74

0

10

20

30

40

50

60

70

80

ど

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Decど10

Feb

ど11

Aprど11

Jun

ど11

Aug

ど11

Oct

ど11

Decど11

Feb

ど12

Aprど12

Jun

ど12

Aug

ど12

Oct

ど12

Decど12

Feb

ど13

Aprど13

Jun

ど13

Aug

ど13

CGRどWGR, stb/MMscf

Gas production rate, MMscf/d

Well Sorど201 Bど18

Gas rate どp, MMscf/d Gas rate (daily), MMscf/d CGR どp, stb/MMscf

WGR どp, stb/MMscf CGR, stb/MMscf WGR, st/MMscf

1,264

2,211

ど

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Aug

ど10

Oct

ど10

Decど10

Feb

ど11

Aprど11

Jun

ど11

Aug

ど11

Oct

ど11

Decど11

Feb

ど12

Aprど12

Jun

ど12

Aug

ど12

Oct

ど12

Decど12

Feb

ど13

Aprど13

Jun

ど13

Aug

ど13

Oct

ど13

Pressure, psia Well Sorど201 Bど18(BHP from WHP)

Wellhead Pressure psia estimated BHP, psiaWellhead Press. PSI Reservoir pressureどtests



3.4.3. Well Sor-201 product ion forecasts

Product ion forecasts for well Sor-201 were m ade assum ing that the compressor that Hawkley is planning to install at the wellhead will be operat ional from 1st March 2014. The lowest intake pressure for the com pressor will be 20atm (294 psia) according to Hawkley. The compressor will allow higher pressure drawdown and hence higher gas product ion rates, but also higher recovery efficiency can be achieved with lower reservoir abandonment pressure.

First , a No Further Act ivity (NFA) forecast was m ade (Figure 3.14 and Figure 3.15) , which represents a scenario where the compressor is not installed. Exponent ial decline was used for the P90 case, while for P50 and P10 hyperbolic decline used with ‘b’ equal 0.2 and 0.4 respect ively. Next , the bot tom hole pressure (BHP) was est im ated using wellhead pressure (WHP) , tem perature and rates of gas oil and water (Figure 3.13) . This pressure was ext rapolated to find BHP at the end of February 2014. The BHP data was assum ed to be very close to reservoir pressure. The product ion data was checked with I nflow-Out flow relat ionship built in ProsperTM software (Figure 3.16) and using well schemat ics provided by Hawkley (Figure 3.17) . A range of product ion rates was determ ined for the com pressor start using ext rapolated reservoir pressure of ~ 2100psia and cross sect ion of inflow and out flow curves. At a reservoir pressure 2100psia the intersect ion of the 20atm out flow curve and three inflow curves for a range of reservoir propert ies (Figure 3.16) suggested potent ial gas rates of 3 – 4 – 6 MMscf/ d. This range of gas rates was used from 1st March 2014 to derive the product ion forecasts shown in Figure 3.18 and Figure 3.19. For the P90 forecast it was assum ed that the higher rate will not result in increased ult imate recovery, but in accelerat ion only, while for the P50 and P10 forecasts recoverable gas volum es were predicted to be sim ilar to those from the p/ z analysis. The corresponding condesate product ion forecasts are shown in Figure 3.20.

Using decline curve analysis (DCA) on the product ion data results in an est imated ult imate technical recovery (EUR) of 6.2 to 9.4 BCF of gas assum ing a 0.1MMscf/ d gas rate cut -off before econom ic cut -off, see Figure 3.18 and Figure 3.19. Cumulat ive gas product ion as of 30 th June 2013 was 4.53 BCF, and therefore a further 1.7 to 4.9 BCF can technically be produced from well Sor-201 if the compressor is installed. The detailed technical product ion forecasts assum ing com pression from 1st March 2104 are listed in Table 3.5 to Table 3.7 for the Low, Mid, and High cases respect ively.

The p/ z analysis carr ied out resulted in sim ilar volumet r ic est imates as derived by DCA for well Sor-201; this is described in the next sect ion.



Figure 3 .1 4 : W ell Sor- 2 0 1 NFA forecasts ( gas ra te v s. cum . gas product ion)

Figure 3 .1 5 : W ell Sor- 2 0 1 NFA forecasts ( gas ra te v s. t im e)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

0 1 2 3 4 5 6 7 8

MMscf/d

Cum. Production (Gp), BCF

Well Sor-201 Gas production(B-18 Upper)

high

Mid

low

historic

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Feb

-11

Jun-

11

Oct

-11

Feb

-12

Jun-

12

Oct

-12

Mar

-13

Jul-1

3

Oct

-13

Mar

-14

Jul-1

4

Nov

-14

Mar

-15

Jul-1

5

Nov

-15

Mar

-16

Jul-1

6

Nov

-16

Mar

-17

Jul-1

7

Nov

-17

Mar

-18

Jul-1

8

Nov

-18

MMscf/dWell Sor-201 Gas production

(B-18 Upper)

high

Mid

low

historic



Figure 3 .1 6 : W ell Sor- 2 0 1 – inf low - out f low re la t ion ship

Figure 3 .1 7 : W ell Sor- 2 0 1 schem at ic

(Source: Hawkley)

426m m at 48m

324m m at 695m

245m m at 2425m

146m m at 4125m

73x5.5m m at 4052m Perforat ions at 4065-4076m

215.9m m (8.5" bit size)



Figure 3 .1 8 : W ell Sor- 2 0 1 forecasts ( gas ra te vs. t im e) , w / com pr. from 1 st March 2 0 1 4

Figure 3 .1 9 : W ell Sor- 2 0 1 forecasts ( gas ra te vs. cum . gas product ion) , w / com pression from 1 st March 2 0 1 4

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Feb

-11

Jun-

11

Oct

-11

Feb

-12

Jun-

12

Oct

-12

Mar

-13

Jul-1

3

Oct

-13

Mar

-14

Jul-1

4

Nov

-14

Mar

-15

Jul-1

5

Nov

-15

Mar

-16

Jul-1

6

Nov

-16

Mar

-17

Jul-1

7

Nov

-17

Mar

-18

Jul-1

8

Nov

-18

MMscf/d


high

Mid

low

historic

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

0 1 2 3 4 5 6 7 8 9 10

MMscf/d



high

Mid

low

historic



Figure 3 .2 0 : W ell Sor- 2 0 1 condensate product ion for ecasts

Low / P9 0 Average Daily

Gas Rate Cum . Gas

Product ion Average Daily

Condensate Rate Cum . Condensate

Product ion

Year MMscf/ d BCF stb/ d stb

2013 2.345 4.96 44.8 151,965

2014 2.059 5.71 31.4 163,439

2015 0.894 6.04 10.6 167,311

2016 0.352 6.17 3.7 168,654

2017 0.139 6.22 1.4 169,153

2018 0.055 6.24 0.5 169,346

2019 0.022 6.24 0.2 169,421

2020 0.008 6.25 0.1 169,450

2021 0.003 6.25 0.0 169,462

2022 0.001 6.25 0.0 169,466

2023 0.001 6.25 0.0 169,468

Table 3 .5 : Sor- 2 0 1 - Low Case ( P9 0 ) technica l product ion forecast w / com pression from 1 st March 2 0 1 4

0

50

100

150

200

250

300

350

400

Feb

-11

Jun-

11

Oct

-11

Feb

-12

Jun-

12

Oct

-12

Mar

-13

Jul-1

3

Oct

-13

Mar

-14

Jul-1

4

Nov

-14

Mar

-15

Jul-1

5

Nov

-15

Mar

-16

Jul-1

6

Nov

-16

Mar

-17

Jul-1

7

Nov

-17

Mar

-18

Jul-1

8

Nov

-18

stb/d

Well Sor-201 Condensate production(B-18 Upper)

high

mid

low

historic



Mid/ P5 0 Average Daily

Gas Rate Cum . Gas



Product ion


2013 2.381 4.97 47.2 152,402

2014 3.144 6.11 48.5 170,104

2015 2.274 6.94 23.0 178,493

2016 1.482 7.49 9.5 181,978

2017 0.966 7.84 3.9 183,397

2018 0.630 8.07 1.6 183,963

2019 0.411 8.22 0.6 184,179

2020 0.268 8.32 0.2 184,256

2021 0.174 8.38 0.1 184,278

2022 0.11 8.42 0.0 184,280

2023 0.07 8.45 0.0 184,277

Table 3 .6 : Sor- 2 0 1 - Mid Case ( P5 0 ) technica l product ion forecast w / com pression from 1 st March 2 0 1 4

High/ P1 0 Average Daily

Gas Rate Cum . Gas



Product ion


2013 2.41 4.97 49.5 152,828

2014 4.16 6.49 67.0 177,277

2015 2.64 7.45 28.6 187,701

2016 1.62 8.05 12.1 192,139

2017 1.08 8.44 5.8 194,248

2018 0.76 8.72 3.0 195,333

2019 0.56 8.92 1.6 195,920

2020 0.43 9.08 0.9 196,246

2021 0.33 9.20 0.5 196,427

2022 0.27 9.30 0.3 196,525

2023 0.22 9.38 0.1 196,576

Table 3 .7 : Sor- 2 0 1 - H igh Case ( P1 0 ) technica l product ion forecast w / com pression from 1 st March 2 0 1 4



3.4.4. P/ z data analysis of B-18 Upper reservoir in the area of wells 110 and Sor-201

I n the Sorochinska field three wells (110, Sor-201 and 469) have been drilled into the B-18 reservoir. Geological, seism ic and pressure data suggest that the B-18 reservoir consists of at least two blocks (compartm ents) ; one with the 469 well and the other penet rated by the 110 and Sor-201 wells.

I nit ial pressure of the B-18 Upper reservoir recorded in well 110 is significant ly higher than the final pressures of well 469, thereby confirm ing that well 469 was draining a separate isolated block. Furthermore, the p/ z analysis shows a very clear t rend with a well defined est im ate of ult im ate recoverable gas volume, see Figure 3.21.

I nit ial reservoir pressure of B-18 Upper reservoir in well Sor-201 is ~ 480 psi higher than the last pressure measured in January 1991 in well 110 (Figure 3.21) . Well Sor-201 was drilled 20 years after well 110 stopped producing, thus the reservoir pressure had t ime to equilibrate.

The combined p/ z analysis for wells 110 and Sor-201 assum ing both wells penet rated the same block is shown in Figure 3.22, which reveals that reservoir pressure decline plot ted against cumulat ive gas product ion is not linear for the two wells. This can be due to measurement inaccuracy or an addit ional source of energy ( i.e. external energy; like aquifer support or addit ional gas volum es poorly connected) . All of these explanat ions would result in smaller pressure drop for the same cumulat ive gas withdrawal. Alternat ivley, a poor cement job and cross- flow with other reservoir zone would result in a sim ilar effect . Regional studies suggest that an act ive aquifer is not likely in the Viséan reservoirs of the Dnieper-Donets basin according to Hawkley. Addit ional gas volum es which start cont r ibut ing once sufficient pressure drawdown has been created in the reservoir close to the product ion well is a possibilit y. A schemat ic model (as shown in Figure 3.11) can probably explain the p/ z vs. cumulat ive gas product ion non- linearity in Figure 3.22. I nit ially the well produces from an area with good propert ies, but then later gas from ‘adjacent ’ gas volum es will start flowing, thereby m aking the pressure decline less sharp.

However, assum ing that well Sor-201 drains an isolated block results in an est imated GI I P range of ~ 8.5-10 BCF, see Figure 3.23. Since no addit ional wells are planned in Sorochynska to confirm the possible volumetr ic upside, the current reserves report considers a conservat ive scenario with well Sor-201 draining an isolated block as a base case. The product ion volum es est im ated from DCA analysis are const rained by the GI I P for well Sor-201, as it is located in the isolated block.



Figure 3 .2 1 : Sorochynska - p/ z plots of w e lls 4 6 9 , 1 1 0 and Sor- 2 0 1 ( each w ell separate)

0

1,000

2,000

3,000

4,000

5,000

6,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

p/z


P/z plot Sorochynska(wells 469, 110 and Sorど201)

Well Sorど201

Well 110

Well 469



Figure 3 .2 2 : Sorochynska - p/ z plots of w ells 1 1 0 a nd sor- 2 0 1 ( assum ing that w ells dra in sam e block)

0

1,000

2,000

3,000

4,000

5,000

6,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

p/z


P/z plot Sorochynska(wells 110 and Sorど201)

Well Sorど201

Well 110



Figure 3 .2 3 : P/ z plot for w ells 1 1 0 and Sor- 2 0 1 ( ea ch w ell separate)

0

1,000

2,000

3,000

4,000

5,000

6,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

p/z


P/z plot Sorochynska(wells 110 and Sorど201)

November 2012 test 2491psia

Current estimate of pressure (~2200psi) approx. matches p/z line with Gp of 4.5 BCF on 30th June 2013

At abandonment pressure of ~700psi (760 on p/z) Gp would be ~7.5 BCF

March 2013 test 2234psia

Well Sorど201 (Bど18)Well 110Estimates of current & aband. pressure



4. Econom ic Evaluat ions

4.1. Ukrainian fiscal term s

(Source: Ernst & Young Global Oil and Tax Guide 2013)

The pet roleum fiscal regime in Ukraine consists of a com binat ion of Corporate Profits Tax, Royalt ies, and Subsoil Use Payments. I n addit ion there are a number of general taxes applicable to all Ukrainian corporate ent it ies, including VAT, export and import dut ies, payroll taxes, uniform social tax, and withholding taxes. The key m et r ics for each of the main elem ents are summarised below.

Corporate Profit s Tax ( CPT) :

The CPT rate is 19% in 2013, and 16% from 2014 onwards, with the 19% rate current ly applied (Sept . 2013) to taxable profits from oil and gas act ivit ies. I n general r ing- fencing is not applied when determ ining a com pany’s CPT liability due from oil and gas product ion, such that profits from one project can be offset against losses from another project held by the same Ukrainian registered legal corporate ent ity.

Royalt ies and Subsoil Use Paym ents:

Royalt ies on the volumes of hydrocarbons produced (oil, gas, and condensate) were abolished from 1st January 2013, but the subsoil use payments were increased significant ly. All subsoil users producing m ineral resources in Ukraine ( including during the explorat ion act ivit ies) are liable for Subsoil Use Payments based on the actual volume of oil, gas, and condensate ext racted, as listed in Table 4.1 below. All of Hawkley’s current product ion is from reservoirs shallower than 5,000m depth, thus the highest subsoil use paym ents apply. Subsoil Use Payments are deduct ible against CPT.

Subsoil Use Paym ents

Hydrocarbon Type

Rate ( % of va lue)

Unit Com m ents

Oil and condensate

39% tonne Applies to liquids produced from reservoirs

shallower than 5,000m depth

17% tonne Applies to liquids produced from reservoirs

deeper than 5,000m depth

Gas

25% 1,000m 3 Applies to gas and associated gas produced

from reservoirs shallower than 5,000m depth

14% 1,000m 3 Applies to gas and associated gas produced from reservoirs deeper than 5,000m depth

11% 1,000m 3 Applies to gas and associated gas produced

from offshore fields on the cont inental shelf or in the exclusive (sea) econom ic zone.

20% 1,000m 3

Applies to gas and associated gas produced from reservoirs shallower than 5,000m depth

and sold to Governm ent designated ent it ies for pr ivate consum ers

14% 1,000m 3

Applies to gas and associated gas produced from reservoirs deeper than 5,000m depth

and sold to Governm ent designated ent it ies for pr ivate consum ers

Table 4 .1 : Current Subsoil Use Paym ents in Ukra ine



Deprecia t ion:

Oil and gas well and facilit ies costs are depreciated over 11 years, and the annual depreciat ion rate depends on the year the well or facilit y is in operat ion ( relat ive to the date of first operat ion) , and range from 18% to 3% of the well and facilit y ’s historic value as listed in Table 4.2 below:

Product ion Year Deprecia t ion Rate

1 10%

2 18%

3 14%

4 12%

5 9%

6 7%

7 7%

8 7%

9 7%

10 6%

11 3%

Table 4 .2 : Current deprecia t i on ra tes for capita l costs

VAT:

Product ion of, and t rading in oil and gas within Ukraine is subject to 20% VAT during 2013, while from 2014 onwards the VAT rate will be reduced to 17% .

Other Signif icant Taxes:

A num ber of addit ional taxes are payable, as listed below:

Unified Social Tax is levied on employees’ salar ies with the em ployer’s cont r ibut ion in the range 36.76% to 49.7% .

Personal I ncome Tax is levied at 15% , or 17% for income more than 10x greater than the m inimum salary.

Environm ental Tax is payable by any ent ity engaged in oil and gas product ion within Ukraine. The rates vary significant ly depending on the am ount , nature, concent rat ion, object of pollut ion, and level of hazard etc.

Land Tax is payable by com panies engaged in oil and gas product ion, and the rates vary according to the locat ion and characterist ics of the land plot .

Special Water Use Levy is payable on the use of freshwater ( intake and discharge) , and depends on the volum e consum ed, the source of the water, the region, and the purpose of special water use.



4.2. Cost assum pt ions for Sor-201 evaluat ions

Hawkley provided a basic econom ic model for the review which contained the capex and opex assumpt ions for the Sor-201 well from 1st Sept . 2013 t ill end-2023. The model included the capex cost for the planned compressor and the associated opex costs, as well as the other opex cost elem ents. TRACS has reviewed the model and found that the current Ukrainian fiscal terms are correct ly represented. The model is set up for calcualt ions in US$, and as there are no inflat ion calculat ions included in the model the results are in US$ RT.

The key capex and opex cost elem ents are summarised in Table 4.3 below:

Descr ipt ion Cost

Com m ents US$ RT 1 .1 .2 0 1 3

Compressor capex $386,000 Phased over period Sept -13 to Jan-14, with US$241,000 in Jan-14

Sorochynska opex 8% of total revenue Gas + condensate revenue net of VAT

Gas plant opex + prep. costs 3% of total revenue Gas + condensate revenue net of VAT

G & A costs to end 2014 $100,000/ m onth

G & A costs 2015 $90,000/ month

G & A costs 2016 $80,000/ month

G & A costs 2017 $70,000/ month

G & A costs 2018 $60,000/ month

G & A costs 2019 to 2023 $50,000/ month

Table 4 .3 : Sum m ary of costs es t im ates 2 0 1 3 - 2 0 2 3 for Sor- 2 0 1 w ell

TRACS has reviewed these cost est imates and found them reasonable for the onshore Ukrainian operat ing environment . Note that the m onthly G&A costs are assum ed to taper off from 2015 onwards as product ion declines.

4.3. Gas and condensate prices

The gas and condensate prices contained in the m odel were US$9.26/ m scf and US$66.32/ bbl net of Ukrainian VAT (= Base Case prices) , kept constant in RT through the remaining field life.

Sensit iv it ies were run on the gas and condensate prices (+ / - 20% around the Base Case values) , but the cut -offs were not m aterially affected, thus only the cut -offs est im ated based on the Base Case prices were used for est im at ing the rem aining 1P-2P-3P reserves.



4.4. TRACS econom ic evaluat ions

The main purpose of the econom ic runs was to determ ine the end of econom ic life (EOEL, or “cut -off” ) for the TRACS Low-Mid-High cases (1P-2P-3P) under both the NFA (No Further Act ivity) scenario and with compression added from 1st March 2014. These cut -offs were determ ined by linear interpolat ion between the last full year with a posit ive net cashflow and the first full year with a negat ive cashflow ( rounded down to the nearest whole m onth) , as the est im ated product ion profiles used for each case are assumed to show a smooth decline month-by-month while the product ion rates shown in the econom ic model represent the annual average daily rates. The cut -offs are prim arily dependent on the opex costs towards the end of field life, and are used to est im ate the rem aining 1P-2P-3P reserves from 1st July 2013, see Table 4.4 below, which also includes indicat ive NPV(10% ) valuat ions for each case.

TRACS Case

Prod. to end

m onth- yr ( EOEL)

Cum . Prod. to EOEL

Cum . Prod. to 3 0 / 6 / 2 0 1 3

Cum . Prod. 1 / 7 / 2 0 1 3 to EOEL

I ncr . Prod. 1 / 7 / 2 0 1 3 to EOEL I ndicat ive

NPV( 1 0 % ) PV 1 .1 .2 0 1 3

Gas Cond. Gas Cond. Gas Cond. Gas Cond.

BCF Mstb BCF Mstb BCF Mstb BCF Mstb US$ ’0 0 0

NFA 1P July-17 6.09 168 4.53 144 1.56 24 $4,514

NFA 2P July-19 6.58 176 4.53 144 2.05 32 $5,651

NFA 3P Feb-22 7.21 186 4.53 144 2.68 42 $7,161

Compr. 1P Oct -16 6.15 169 4.53 144 1.62 25 0.06 1 $4,122

Compr. 2P Nov-20 8.31 184 4.53 144 3.78 41 1.73 9 $11,307

Compr. 3P Oct -22 9.28 197 4.53 144 4.75 53 2.07 11 $14,504

Table 4 .4 : Sor- 2 0 1 - sum m ary of econom ic cut - offs a nd rem aining reserves for NFA and Com pression cases

The NPVs are indicat ive because the econom ic m odel starts 1st Sept 2013 while the remaining reserves are quoted from 1st July 2013 onwards. Furthermore, the Hawkley econom ic m odel has m onthly cashflow calculat ions for the period 1st Sept 2013 to 31st Dec 2014, and annualised calculat ions from 1st January 2015 onwards, thus there is not sufficient resolut ion to capture the net cashflow cont r ibut ions for the last few m onths in the final part -year pf product ion.

The indicat ive NPVs show that for the 2P and 3P cases there is a st rong business case for installing the com pressor, while the 1P Com pressor cases returns a marginally lower NPV than the NFA 1P case. However, the 1P Com pressor case is pr imarily an accelerat ion project recovering 0.06 BCF m ore gas than the 1P NFA case, but reaches end of econom ic life sooner due to higher opex costs in 2016 com pared to 2017 (based on the cost data included in Hawkley’s econom ic model) . The incremental addit ional 2P volume of 1.73 BCF with compression represents an incremental indicat ive NPV(10% ) of som e US$ 5.75m ln net to Hawkley.



5. Reserves Est im ate

5.1. Sor-201 B-18 Upper reservoir East block

The econom ic analysis provided est imates of the econom ic cut -offs for the TRACS NFA and Com pression cases, see Sect ion 4.4 and Table 4.4 above, and the est imates of remaining reserves as of 30 th June 2013 are listed in Table 5.1 below.

Gas Date Gas BCF



30.06.2013



Proved 1 .6 2 3 .7 8 4 .7 5

Condensate Date Condensate Mstb

Com m ents Low / 1 P Low / 1 P Low / 1 P


30.06.2013



Proved 2 5 4 1 5 3

Table 5 .1 : Rem aining gas and condensate re serves in Sor- 2 0 1 B- 1 8 Upper reservoir East block

5.2. B-19

There is no current product ion from this perceived reservoir. All est im ated resources are deem ed cont ingent pending further dr illing act ivity, and outside the scope of this report .



5.3. Reconciliat ion with 2012 Reserves Report

The last independent reserves assessm ent was m ade by Moyes & Co., I nc. dated 1st January 2012 ( ref. 1) , and focused only on the B-18 sand.

5.3.1. I n-place volum es (GI I P) – com parison Moyes vs. TRACS

The TRACS evaluat ion (Table 5.2) resulted in the following GI I P est imates (East block only) :

B- 1 8 Reservoir East block only


P9 0 P5 0 P1 0

Upper 16 28 40

Lower 5 8 11

Tota l 2 1 3 6 5 1

Moyes 3 5 * 6 0 * * 8 0 * * *




Table 5 .2 : TRACS and Moyes GI I P est im a tes for Sorochynska East block only

The TRACS est imates are based ent irely on the producing Sor-201 well and focus solely on the B-18 reservoir. Moyes’s GI I P est imates are m ore indicat ive com pared to the TRACS m ethodology, as the Moyes est im ates were based on depth maps derived from 2D seism ic data while TRACS had full access to the new Sorochynska 3D acquired in 2012.



5.3.2. Reserves as per Moyes report 1.1.2012

The reserve sum m ary for the B-18 East block from the 2012 Moyes Report is reproduced below as Figure 5.1:

Figure 5 .1 : Reserve Sum m ary show n as Figure 1 9 in 2 0 1 2 Moyes & Co., I nc repor t

Except for the category “Proved developed Producing” Moyes’s est im ates are based on volumet r ic calculat ions (GI I P x RF) with addit ional in- fill wells assumed (P10 case: 5 new wells) , as explained below in Table 5.3:

Moyes case RF Method applied

P90 76%

Based on an abandonm ent pressure of 1500 psi the recovery factor would be approximately 76% of gas in place. This yields an ult im ate reserve of 27 BCF. Subt ract ing the 3 BCF produced by the 110 well yields a Proved Reserve of 24 BCF.

P50 74% This is based on a com binat ion of the m aterial balance and the Net Sand I sopach Map with a lim ited drainage around each well that is sim ilar to the Sor-201 well.

P10 67% Com plete drainage of the m apped t rap by a total of five wells, yielding a recovery factor of 67% of the gas in place.

Table 5 .3 : Sum m ary of Moyes’ reco very factors and m ethods applied

Moyes assum ed different GI I P volum es for the Low-Mid-High est im ates in the area of the Sor-201 well (Eastern block) , which were in turn mult iplied by recovery factors (Table 5.3) to derive est im ates of recoverable volum es / reserves. For their P10 est im ate Moyes assum ed five addit ional wells producing from the B-18 reservoir in the Eastern block. Furtherm ore, only the Moyes Proved (1P) est im ate was sub-divided into Developed



(Producing and Non-Producing) ; such a sub-division was not m ade for the Probable (2P and Possible (3P) est imates.

Moyes’ Proved Developed Reserves est im ate of about 8.5 BCF was derived by several m ethods and represents the est imated ult imate recovery from well Sor-201 from date of first product ion. An addit ional 4.5 BCF (Probable) was at t r ibuted to recovery from areas where a different ial pressure is required to break down internal baffles/ barr iers. As of 1.1.2012 2.12 BCF had been produced leaving 6.29 BCF rem aining, as quoted by Moyes in their 2012 report .

5.4. Reconciliat ion between Moyes (2012) and TRACS (2013) Reserve Est im ates

The TRACS reserve est imate are based solely on the product ion forecasts for the Sor-201 well; with Low-Mid-High est im ates for both a No Further Act ivity scenario (NFA) and a second scenario where a compressor with 20 atm intake pressure is installed and becomes operat ional from 1st March 2014. According to inform at ion supplied by Hawkley no further wells are assumed to be drilled, in cont rast to the Moyes report where 4-5 new wells were assumed.

The remaining reserves in the B-18 sand from well Sor-201 are calculated based on the econom ic parameters in Chapter 4.0. The reconciliat ions with the previous Reserves Statem ent 2012 are shown below in Table 5.4 for gas and Table 5.5 for condensate:




30.06.2013



Proved 1 .6 2 3 .7 8 4 .7 5















30.06.2013



Proved 2 5 4 1 5 3











The reconciliat ion is done solely on the Eastern block where the producing well Sor-201 is located. I nstallat ion of the compressor is scheduled for the winter of 2013-2014 and has therefore been termed undeveloped.


The analysis behind the 1.1.2012 reserve est imate is different , in part due to the GI I P est imates being based on depth maps derived from 2D seism ic data and a different areal division. The reduct ions in overall 1P and 2P reserves for the B-18 Upper reservoir (East block) are at t r ibuted to a more confident est im ate (supported by depth m aps derived from new 3D seism ic data) and a different abandonment condit ion.



6. Conclusions

TRACS has carr ied out a com prehensive subsurface review of the Sorochynska licence based on the new 2012 3D survey, all available well data, pet rophysical logs and other reports, plus all recent and histor ic product ion data in order to provide a range of remaining reserves for the B-18 Upper reservoir in the East block as of 30 th June 2013.

The TRACS GI I P est imates for B-18 Upper and Lower reservoirs are based on the new depth maps derived from the 2012 3D seism ic survey (see Table 6.1) . By cont rast the GI I P est im ates of Moyes & Co. were based on older depth maps derived from legacy 2D seism ic data of m ixed vintages.

B- 1 8 Reservoir East Block only


P9 0 P5 0 P1 0

Upper 16 28 40

Lower 5 8 11

Tota l 2 1 3 6 5 1

Moyes 3 5 * 6 0 * * 8 0 * * *




Table 6 .1 : Sorochynska East block - TRACS and Moyes GI I P est im ates

At present only one well (Sor-201) is on product ion ( from the B-18 Upper sand) , and no further drilling is envisaged. Low-Mid-High (1P-2P-3P) reserves est imates were derived by TRACS for two scenarios; a No Further Act ivity (NFA) scenario, and a scenario with gas compression installed and operat ional from 1st March 2014.


The new TRACS reserves est imates were reconciled with the Moyes est im ates of 1st Jan. 2012, and the TRACS est im ates and the reconciliat ions are summarised for gas and condensate in respect ively Table 6.2 and Table 6.3.

The reconciliat ion is done solely on the Eastern block where the producing well Sor-201 is located. I nstallat ion of the compressor is scheduled for the winter of 2013-2014 and has therefore been termed undeveloped.







30.06.2013



Proved 1 .6 2 3 .7 8 4 .7 5













30.06.2013



Proved 2 5 4 1 5 3













7. References

1) Moyes & Co, Inc.: Estimate of Reserves and Future Revenue In the Bど18 Reservoir to the Hawkley Oil and Gas Interest in The Sorochynska Licence located in the Ukraine as of January 01, 2012.

2) Scientific and Production Enterprise GEOMIKS: Geological and Economical Evaluation of Reserves (resources) of Sorochynska gasどcondensate reservoir of Poltava Oblast. Effective 01.01.2011, 4 books plus appendices and tables. [］〉≦÷≦］≦ど〉±≦＜≦≠】％＜〔 ≦¢】＜±〔」〔∞〔♂】［ ♂≦∴≦％『＜♂§±≦］≦ ］〔」≦±≦＜〈〉＜♂〔°＜≦］≦ ∴≦〈≦［『＆〔 ∞≦÷°〔［♂§±≦＋ ≦〕÷〔♂°】, Effective 01.01.2011 by °≦［ "＜〔′±≦［≦ど［『∴≦〕＜『％〉 ∞】〈∞∴『★≠♂°［≦ "］〉≦≠】±♂"].



8. APPENDI X 1 - Pet roleum Resources Classificat ion

Sum m ary of 2 0 0 7 SPE Pet roleum Resources Classif ica t ion

The following paragraphs are quoted from the 2007 SPE PRMS Guidance Notes and sum m arise the key resources categories, while Fig. A-1 shows the recom m ended resources classificat ion fram ework.

Class/ Sub- class Defin it ion

Reserves Reserves are those quant it ies of pet roleum ant icipated to be com m ercially recoverable by applicat ion of developm ent projects to known accumulat ions from a given date forward under defined condit ions.

On Product ion The developm ent project is current ly producing and selling pet roleum to m arket .

Approved for Development All necessary approvals have been obtained, capital funds have been com m it ted, and im plem entat ion of the developm ent project is under way.

Just ified for Development

I mplementat ion of the developm ent project is just if ied on the basis of reasonable forecast com mercial condit ions at the t ime of report ing, and there are reasonable expectat ions that all necessary approvals/ cont racts will be obtained.

Cont ingent Resources

Those quant it ies of pet roleum est imated, as of a given date, to be potent ially recoverable from known accumulat ions by applicat ion of developm ent projects, but which are not current ly considered to be com mercially recoverable due to one or m ore cont ingencies.

Development Pending

A discovered accum ulat ion where project act iv it ies are ongoing to just ify com mercial development in the foreseeable future.

Development Unclar ified or on Hold

A discovered accum ulat ion where project act iv it ies are on hold and/ or where j ust if icat ion as a com m ercial development m ay be subject to signif icant delay.

Development Not Viable

A discovered accum ulat ion for which there are no current plans to develop or to acquire addit ional data at the t ime due to lim ited product ion potent ial.

Prospect ive Resources Those quant it ies of pet roleum which are est imated, as of a given date, to be potent ially recoverable from undiscovered accum ulat ions.

Prospect A project associated with a potent ial accum ulat ion that is sufficient ly well defined to represent a v iable dr illing target .



Fig. A-1: 2007 SPE PRMS Pet roleum Resources Classificat ion Fram ework



9. APPENDI X 2 - Glossary

$ US Dollars

% percent

°C Degrees Celcius

2D Two Dimensional

3D Three Dimensional

API American Petroleum Institute

AVO Amplitude Variation with Offset

Av Phi Average Porosity (from log evaluation)

Av Sw Average water Saturation (from log evaluation)

bbls Barrels

Bscf Billion standard cubic feet of natural gas

bfpd Barrels of fluid per day

boe barrels of oil equivalent

boepd barrels of oil equivalent per day

bopd barrels oil per day

bpd barrels per day

bwpd barrels of water per day

Cali Caliper

Capex capital expenditure

CGR Condensate Gas Ratio

cm3 cubic centimetre

m3 cubic metre

COCS Chance of Commercial Success

CPI Computer Processed Interpretation (of logs)

CT Corporation Tax

Den Density log

D res Deep resistivity log (deep investigation)

DST Drill Stem Test

DT Sonic log

E & A Exploration & Appraisal

ft feet

FTHP Flowing Tubing Head Pressure

FWL Free Water Level

G & G Geological and Geophysical

Gas sat Gas saturation

GDT Gas Down To

GIIP Gas Initially In Place

GOR Gas to Oil Ratio

GR Gamma Ray log

GRV Gross Rock Volume

GUT Gas Up To

GWC Gas Water Contact

HCDT Hydro┽Carbon Down To

HCWC Hydro┽Carbon Water Contact

IRR Internal Rate of Return (from MOD cashflows)

JV Joint Venture

K Permeability

km Kilometre

km2 Square kilometres

m metre

Mbbls thousand barrels of oil (unless otherwise

stated)

Mboe thousand barrels of oil equivalent

Mbopd thousand barrels of oil per day

Mcf thousand cubic feet

Mcfd thousand cubic feet per day of natural gas

MD Measured Depth

mD milli Darcies

MM million

MMbbls million barrels of oil

MMstb million stock┽tank barrels of oil

MMbo million barrels of oil

MMboe million barrels of oil equivalent

MMcf million cubic feet of natural gas

MMscfd million cubic feet of natural gas per day

MOD Money Of the Day

N/G Net to Gross

Neu Neutron log

NFA No Further Activity

NPV Net Present Value

OBC Ocean Bottom Cable



ODT Oil Down To

OML Oil Mining Licence

Opex operating expenditure

OPL Oil Prospecting Lease

OUT Oil Up To

OWC Oil Water Contact

P & A Plugged and Abandoned

p.a. per annum

P10 10% probability of being exceeded



POS Possibility Of Success

ppm wt Parts per million by weight

PRMS Petroleum Resource Management System

PSC Production Sharing Contract

psi pounds per square inch

psia pounds per square inch absolute

PV Present Value

PVT Pressure Volume Temperature

RF Recovery Factor

RFT Repeat Formation Tester

RROR Real Rate of Return (from RT cashflows)

RT Real Terms

SG Specific Gravity

SMT Kingdom a PC┽based interpretation workstation

SPE Society of Petroleum EnginHawkleys

sq km square kilometres

S res Short resistivity log (shallow investigation)

ss subsea

STOIIP Stock Tank Oil Initially In Place

Sw water Saturation

Swavg average water Saturation

Sxo water Saturation in invaded zone

TD Total Depth

tvd true vertical depth

tvdss true vertical depth subsea

tvt true vertical thickness

TWT Two┽Way Time

WI Working Interest

sorochynska reserves report (sor-201 b-18 reservoir) · pdf filesorochynska reserves report...

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