APPENDIX E - DRILLING COSTS Time to Drill Vertical Well to 2000m = 50 days Horizontal Well to 3500m length = 75 days (calculate

exact drilling length from shape of well) Drilling Engineering Costs $4500 per m Total Drilling Costs - Shallow water a). Rig Hire = 38% b). Drilling Engineering = 38% c). Geoscience = 5% d). Supply Logistics = 19% Total Drilling Costs - Deepwater a). Rig Hire = 40% b). Drilling Engineering = 40% c). Geoscience = 4% d). Supply Logistics = 16% SUBSEA COSTS XMAS TREES = $2million SUBSEA CONTROL MODULES = $0.5million VALUE OF OIL $100 per Barrel RIGZONE OFFSHORE DRILLING RIG DAY RATES (look up latest data on Web)

Note Rigzone data for SemiSub Rig = $250,000 per day for up to 500 m water depth. But for North Sea you need 200m Rig so say $200,000 per day. Or Deepwater Rigs see costs. Calculate length of well (Depth + Horizontal). Cost = $4500 per meter. Calculate Engineering cost total. For Shallow water this is 38% or total well (40% for Deepwater ). Factor up for total well cost estimate. Calculate the Rig Hire costs + Engineering Costs. Shallow Water - this is 76% of total costs (ie not including the Geoscience and Logistics costs), so divide the Rig Hire + Engineering costs by 0.76 to give Total Drilling Cost.