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Europe (UK) - Central North Sea

October 2012

Clyde Area
Key Facts
Onstream Location Sector, Basin: Central North Sea, Central Graben 2 Block: 30/17B, Area: 99 km Water Depth: 75 - 82m Offshore Timetable Issue Date Discovery Date: Clyde Discovery Date: Leven Discovery Date: Medwin Discovery Date: Nethan Devt Consent: Clyde Devt Consent: Leven Devt Consent: Medwin Devt Consent: Nethan Production Started: Clyde Production Started: Leven Production Started: Medwin Production Started: Nethan Peak Gas Production (23 mmcfd): Clyde Area Peak Oil Production (51,500 b/d): Clyde Area Final Expiry Participants Talisman First Oil Nov-77 Jun-78 Oct-83 May-79 May-04 Dec-82 Sep-92 Nov-93 May-04 Mar-87 Sep-92 Mar-94 May-04 1988 1988 Nov-14 % 95 5

Operator Talisman

Primary Reservoir(s): Clyde Area: Jurassic\Upper Jurassic\Kimmeridgian\Humber\Fulmar Recoverable Reserves (p+p) Hydrocarbon Quality 167 mmbbl Oil Gravity (°API) 36 bcf Sales Gas Sulphur (%) Remaining Reserves at 01/01/2013 12 mmbbl Oil 0 bcf Sales Gas Contract Financial Summary Concession Capital costs (2013 terms) Capital costs per boe (2013 terms) Operating costs (2013 terms) Operating costs per boe (2013 terms) Remaining PV (10.0% nominal) Remaining PV per boe (10.0% nominal) Rate of return
Source: Wood Mackenzie We assume that the licence will be extended until the reserves are depleted.

37 - 39 0.4

US$2,455M US$14.18/boe US$2,874M US$16.60/boe US$46M US$3.85/boe 12.5%

Summary and Key Issues
Summary
The Clyde Area consists of four separate Jurassic structures (Clyde, Leven, Medwin and Nethan). The Clyde field has been developed with a single lightweight fixed steel platform. The Leven (formerly Clyde Alpha), Medwin and Nethan fields have each been exploited via extended reach drilling (ERD) from the Clyde platform.

Clyde Area

Central North Sea

Production is transported from the Clyde platform to Fulmar, ten kilometres to the west. Gas is then exported via the Fulmar gas pipeline to the terminal facilities at St Fergus. Since early 1997, oil has been exported via a spurline connection that runs from Fulmar to the J-Block/Norpipe evacuation route. Liquids land at the ConocoPhillips-operated terminal facilities at Teesside. Prior to 1997, crude was evacuated from Fulmar via the Fulmar offshore loading system. The Medwin field ceased production in 1996. However, during 2005 an appraisal well targeting a possible field extension to the west was successful and was completed as a producer. The field came back onstream in November 2005. The Nethan field was shut-in during 2005 due to gas lift capacity constraints on the Clyde platform. Production from the field resumed in October 2009. The Talisman-operated Orion field has been developed as a subsea tie-back to the Clyde platform, which has helped to prolong the economic life of the facilities. The Cawdor and Flyndre fields are also expected to be developed as subsea tie-backs to the Clyde platform.

Key Issues
A development well was completed on Clyde in August 2012. We expect a further three wells to be drilled on Clyde by the end of 2013. The wells will target a number of structures including the Clyde North Terrace and East Flank. This is expected to extend field life to 2026. The Flyndre and Cawdor fields, which we assume will be tied back to Clyde, are expected to come onstream in late 2013 and 2014 respectively. We assume the Clyde partners will receive a production tariff for the use of its processing and export facilities. However, following commercial negotiations, it is also possible that Flyndre and Cawdor will join the existing Clyde Area opex share agreement, which includes Orion. In July 2012, Sinopec announced the acquisition of a 49% interest in Talisman's UK assets for a consideration of US$1.5 billion. The deal is effective from January 2012 and is still to complete at the time of writing.

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Clyde Area

Central North Sea

Location Maps
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Clyde Area
Clyde Map

Central North Sea

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Clyde Area

Central North Sea

Participation
Participation in the Clyde Area fields at the time of publication is detailed in the accompanying table.

Participation
Company Talisman First Oil Total
Source: Wood Mackenzie * Operator

(%) 95.00 * 5.00 100.00

The Clyde, Leven, Medwin and Nethan accumulations are all wholly contained within block 30/17b which was allocated to a BNOC-led group in the Fifth UK Offshore Licensing Round in November 1977. Recent asset deals involving block 30/17b and the Clyde Area fields include:  In August 2001, First Oil announced that, as part of an earlier deal between Talisman and ExxonMobil, it had acquired a 5% stake in 30/17b. No consideration was disclosed and the deal was effective from 1 July 2000. The deal involved the acquisition, by Talisman, of ExxonMobil's 18.5% stake in block 30/17b (Clyde Area) in March 2001. The final result of the deal was that Talisman effectively increased its equity in the Clyde Area by 13.5%, whilst First Oil acquired ExxonMobil's remaining 5% stake. In July 2012, Sinopec announced the acquisition of a 49% interest in Talisman's UK assets for a consideration of US$1.5 billion. The deal is effective from January 2012 and is still to complete at the time of writing.

More detailed analysis of deals relating to this asset can be found in Wood Mackenzie's M&A Service.

Geology
Each of the Clyde Area fields produce from Jurassic sandstone reservoirs. The Clyde structure itself comprises a rotated fault block underlain by a Zechstein salt wedge. The northern edge of the field has been truncated by crestal erosion beneath a major unconformity at the base of the Upper Cretaceous. The Clyde reservoir is a combined structural and stratigraphic trap, consisting of a north-south trending anticline with general dip and local fault closure. Two oil types are present. In the west and south of the field, the uppermost sand unit is separated from the underlying sands by shale and contains 36.7° API oil with a GOR of 340 scf/barrel. The bulk of the oil has an API of 38.1° and a GOR of 490 scf/barrel. Clyde oil was sourced from the Upper Jurassic, Kimmeridge Clay Formation. The top seal is provided by the overlying Kimmeridge Clay Formation and up-dip seal by the truncation of the Fulmar Formation beneath the Base Chalk unconformity. Down-dip simple three-way dip closures provide the trapping mechanism. The Clyde Area reservoirs are developed within the Fulmar Formation of Early Kimmeridgian age. The dominant facies are heavily bioturbated, arkosic, fine grained sandstones and siltstones deposited in a shallow marine shelf environment. Appraisal and development drilling have defined that the field comprises three separate coarsening upward cycles termed the Upper, Middle and Lower reservoir units, zones A, B and C respectively. The Upper reservoir unit thickens towards the west downflank from the crest. Conversely, the Middle and Lower reservoir units thicken onto the crest of the field to the east. The reservoirs have moderate to excellent porosity and permeability.

Field Hydrocarbon Characteristics
Field Clyde Area Reservoir Depth m 3901 GOR scf/bbl 415 Gravity °API 38 Sulphur % 0.4 Total Acid No. mg KOH/g 0.1

Source: Wood Mackenzie

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Clyde Area

Central North Sea

Well Data
Clyde and Nethan Well Name Type 30/17B-2 Exploration 30/17B-3 Appraisal 30/17B-6 Appraisal 30/17B-7 Appraisal 30/17B-A34 Exploration Operator BNOC Spudded Completed 3-Mar-78 21-Jun-78 29-Aug-78 2-Dec-78 4-May-79 6-Aug-79 4-Jul-80 22-Sep-80 11-Dec-00 15-Feb-01 TMD(m) Result WD(m) 3906 + Oil 79 3938 79 3954 81 3977 78 5739 81 Oil Discovery Field Clyde Comment Clyde oil field discovery well. Tested 4,975 b/d of 37° API oil. Clyde oil field appraisal well. Tested 5,843 b/d of 36° API oil. Clyde oil field appraisal well.

BNOC

BNOC

Oil

BNOC

Oil

Clyde oil field appraisal well. Tested 5,674 b/d of oil.

Talisman

Tight Hole

Well targeted incremental reserves in the Jurassic Clyde field reservoir but was subsequently abandoned due to technical difficulties. Exploration well targeted the ETA2 prospect. Completed as an oil producer. Clyde Area exploration well.

30/17B-A34Z Exploration 30/17B-A39 Exploration 30/17B-A39Z Exploration 30/17B-A34Y Appraisal 30/17B-A34X Appraisal

Talisman

2-Jun-02 19-Mar-03 13-Feb-04 1-Mar-04 1-Mar-04 26-May-04 21-Nov-08 25-Dec-08 25-Dec-08 19-Jan-09

5902 81 1442 81

Oil

Talisman

Talisman

5706 + Oil 81 4570 81 4955 81 Tight Hole

Nethan

Nethan discovery well. Completed as a producer.

Talisman

Clyde northeast flank appraisal well drilled from the Clyde platform. Clyde northeast flank appraisal well drilled from the Clyde platform.

Talisman

Tight Hole

Source: Wood Mackenzie + Commercial Discovery

Leven and Leven North Well Name Type 30/17B-8 Exploration 30/17B-9 Exploration 30/17B-A32 Appraisal Operator BNOC Spudded Completed 24-Jun-81 29-Aug-81 7-Jun-83 21-Oct-83 5-May-00 8-Aug-00 TMD(m) WD(m) 4285 82 Result Oil Shows Discovery Field Comment Targeted the Leven prospect.

Britoil

4156 + Oil 81 6870 81 Oil

Leven

Leven field discovery well (originally Clyde Alpha). Tested 5,300 b/d of oil. Leven appraisal/development well. Tested 12,080 b/d of 39° API oil from good quality Upper Jurassic sands.

Talisman

Source: Wood Mackenzie + Commercial Discovery

Medwin Well Name Type 30/17B-5 Exploration 30/17B-A42 Appraisal Operator BNOC Spudded Completed 25-Jan-79 2-May-79 9-Sep-05 11-Nov-05 TMD(m) Result WD(m) 4265 + Oil 75 7075 81 Oil Discovery Field Medwin Comment Medwin discovery well. Located east of Clyde oil field. Tested 3,510 b/d of 37.7° API oil. Medwin West appraisal well drilled from the Clyde platform. Completed as an oil producer.

Talisman

Source: Wood Mackenzie + Commercial Discovery

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Clyde Area

Central North Sea

Exploration
Clyde was the first commercial discovery made on acreage allocated in the Fifth UK Offshore Licensing Round. Most of the early drilling in this part of the Central Graben was aimed at the Cretaceous and Zechstein chalk reservoirs first found with the Ekofisk discovery in the Norwegian Sector. Clyde, like Fulmar which lies ten kilometres to the west, lies in the deeper Jurassic sandstone horizon. The Clyde Area consists of four separate Jurassic structures (Clyde, Leven, Medwin and Nethan). Clyde (formerly Clyde Beta) is the largest field and forms the main development project. Medwin (formerly Clyde Gamma) identified by well 30/17b-5 in 1979, has been developed by a deviated well from the Clyde platform. Leven (formerly Clyde Alpha), identified by well 30/17b-9 in 1983, consists of a predominantly dip closed elongated anticlinal structure which trends southwest to northeast. The reservoir sands are of inferior quality to the main Clyde structure. A 3D seismic survey undertaken in 1992 suggested that the Medwin field could be larger than originally thought. The survey showed that the discovery well had penetrated the flank of a larger structure capable of being developed via extended reach drilling (ERD). Once appraised by a sidetrack of the disused 30/18b-A21 well in November 1993, the well was brought onstream in March 1994. The well ceased flowing in August 1996. During 2005, the 30/18b-A21Z well was sidetracked to appraise a possible field extension to the west. This well, 30/18b-A42, was subsequently completed as a producer and came onstream in November 2005. In July 2000, the Leven North accumulation was discovered by exploration/development ERD well 30/17b-A32. The well tested 39° API oil at a maximum rate of 12,080 b/d from an Upper Jurassic, Fulmar sand and was brought onstream through the Clyde facilities in August 2000. The 30/17b-A34 exploration well targeting the ETA-2 prospect to the north of the Clyde field was re-entered in June 2002 but encountered problems and was abandoned. This well was subsequently redrilled as well 30/17b-A34Z. A further exploration well, 30/17b-A39Z, was drilled in the first half of 2004 and discovered the Nethan accumulation. The well, which was drilled from the Clyde platform, was brought onstream following an extended well test. The Clyde North East Flank well (NEF), 30/17b-A34Y was drilled in November 2008, and a further sidetrack was drilled in December 2008, 30/17b-A34X. Both wells were unsuccessful, as they only encountered water.

Reserves
Oil in place in the Clyde Area reservoirs is estimated to be around 500 million barrels. In addition to the oil, a small amount of associated gas is produced. Gas reserves of around 75 bcf are expected to be recovered. However, after fuel requirements, sales gas reserves are thought to be around half this figure. Gas sales from the Clyde field ceased at the end of 1999. Estimated reserves for the Clyde Area fields are detailed in the accompanying table.

Commercial Recoverable Reserves (p+p)
(Remaining Reserves at 01/01/2013) Init Oil (mmbbl) 152.7 11.1 2.6 0.4 166.8 Init Gas (bcf) 36.2 36.2 Rem Oil (mmbbl) 11.6 0.0 0.0 0.1 11.7 Rem Gas (bcf) 0.0 -

Clyde Leven Medwin Nethan Total
Source: Wood Mackenzie

Production
Clyde
When the Clyde field came onstream in March 1987, six months ahead of schedule, production levels were high as two producers were drilled prior to the commissioning of the platform. Output then built up to average 52,000 b/d of oil and 23 mmcfd of gas in 1988.

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Clyde Area

Central North Sea

Production from Clyde was seriously affected by damage to the Fulmar floating storage unit (FSU) in late 1988. The removal of the FSU facilities following an accident on 24 December 1988 resulted in a total loss of production for 74 days. Partial production from Clyde was restored on 8 March 1989 using the floating production vessel Petrojarl as a temporary storage and loading facility. Full production resumed once the Fulmar FSU was recommissioned in November 1989 at levels of around 40,000 b/d. Since 1997, liquids export has been via the Central North Sea Evacuation Project (see Transportation section). Gas sales from Clyde ceased at the end of 1999. In total, 36 bcf of sales gas was produced from the field. Produced gas from Clyde (and the Clyde Area) is now used for fuel consumption and gas lift on the platform.

Leven and Leven North
Output from Leven started in September 1992, immediately after development approval was granted. A peak rate of 5,000 b/d occurred in 1993. Following the completion of a novel dual purpose water injector/oil producer well in 1995, peak production reached 6,000 b/d over the period of a few weeks. The Leven North accumulation was discovered in July 2000 and was immediately brought onstream via the extended reach drilling (ERD) exploration/development well, drilled from the Clyde facilities. Output averaged 1,700 b/d in 2001, the first full year of production.

Medwin
Medwin came onstream in March 1994 at around 5,000 b/d and declined to an annual average of 200 b/d in 1996. The well was shut-in from the end of 1996. During 2005, appraisal well 30/18b-A42, targeting a possible field extension to the west, was subsequently completed as a producer and came onstream in November 2005 with an average production of about 1,900 b/d in 2006.

Nethan
First production from the Nethan field was in May 2004. This small oil accumulation was discovered with well, 30/17bA39Z, drilled from the Clyde platform. The Nethan field was shut-in during 2005 due to gas lift capacity constraints on the Clyde platform. Production from the field resumed in October 2009.

Production (2002-2011)
2002 Oil ('000 b/d) Clyde Leven Nethan Medwin Total Liquid ('000 b/d)
Source: Wood Mackenzie

2003 6.0 1.1 7.1

2004 5.9 3.2 0.3 9.4

2005 5.6 1.7 0.0 0.1 7.4

2006 4.5 0.7 1.9 7.1

2007 3.2 0.2 0.6 4.0

2008 2.3 0.2 0.3 2.8

2009 2.7 0.2 0.1 0.3 3.3

2010 2.2 0.2 0.2 0.2 2.8

2011 2.0 0.1 0.2 0.1 2.4

7.1 1.4 8.5

Production (2012-2021)
2012 Oil ('000 b/d) Clyde Leven Nethan Medwin Total Liquid ('000 b/d)
Source: Wood Mackenzie

2013 3.9 0.1 0.2 0.1 4.2

2014 4.2 0.1 0.1 0.1 4.4

2015 3.6 3.6

2016 3.0 3.0

2017 2.6 2.6

2018 2.4 2.4

2019 2.1 2.1

2020 1.9 1.9

2021 1.7 1.7

2.7 0.1 0.3 0.1 3.1

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Clyde Area
Clyde Area Production Profile
'000b/d mmcfd

Central North Sea

60
50 40 200 30 150 20 10 0 1992 1997 Liquid Source: Wood Mackenzie 1982 1987 2002 2007 2012 2017 2022 Gas 2027 100 50 0 300 250

Development
Platforms
The Clyde Area has been developed with a conventional fixed steel platform, consisting of a combined drilling production and accommodation unit. Designed by John Brown/Earl and Wright and fabricated by McDermott at the Ardersier yard, the jacket was installed on the field in July 1985. The topsides equipment comprising drilling, production, power and accommodation modules were installed in June 1986. Development drilling started in the autumn of 1986.

Platform Summary
Water Depth Type Function Yard Ordered Installed Processing Capacity: Oil ('000 b/d) Water ('000 b/d) Injection Capacity: Water ('000 b/d) Accommodation Weight: Jacket (t) Topsides (t) Well Slots Legs Piles
Source: Wood Mackenzie

Clyde 80m Fixed Jacket Prod/Drilling/Accomm McDermott, Ardersier Jan-84 Jul-85 60 100 105 205 10400 17900 30 8 26

Clyde Development Drilling
All the Clyde Area development wells have been drilled from the platform. Production initially started from Clyde via a single well, and a further 24 wells have been completed. A high-risk Clyde well was successfully drilled from the platform in 1995 and initially added 5,000 b/d to production levels. Further infill drilling took place between 1996 and1999, and output levels were again maintained. In August 2001, Talisman completed a successful horizontal well with a 792 metre horizontal section in the southern horst A zone sands (SHAZ) within the Fulmar Formation in the southern area of the Clyde field. BJ Well Services carried out what is believed to be a coiled tubing conveyed perforating record, by reverse-deploying 865 metres of 2.5-inch perforating guns in a single run to depths of 5,425 metres. The well started production at an initial rate of 5,000 b/d.
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Clyde Area

Central North Sea

Development drilling continued through 2003 and 2004, with two wells drilled on Clyde. In 2005, two further development wells were drilled on Clyde (30/17b-A41Z and 30/17b-A43Z). One successful infill well was completed in 2007. A North East Flank (NEF) appraisal well was drilled in 2008 with the intention of being converted to a producer. However, the well encountered water and was abandoned. A development well was completed on Clyde in August 2012. We assume a further three infill wells will be drilled on Clyde by the end of 2013. In addition to the Crestal B and Lambda wells, two of the four wells will target the Clyde North Terrace and East Flank. We expect this to extend field life to 2026.

Secondary Recovery
Water injection is used to maintain the reservoir pressure on Clyde. The produced water system on the platform has 100,000 b/d capacity and was upgraded in 2004 at a cost of around £1 million. In addition, gas lift was partially implemented in 1990 to enhance the performance of the Clyde production wells. In order to minimise oil to sea discharges, significant modifications to the Clyde platform topsides have been carried out to install Produced Water Reinjection (PWRI) capability, which began in early 2007.

Clyde Area Satellite Fields
Leven received development approval in September 1992 and immediately started production. A deviated well drilled from the Clyde platform has been used to develop the reservoir. A second well (a dual purpose injector and producer) was drilled in 1995. Medwin received development approval in November 1993 and started production in March 1994. The field was developed via an extended reach well, also drilled from the Clyde platform. At the time, with a step-out of 5.3 kilometres and a measured depth of 7,163 metres, the well was the longest and deepest step-out well to have been drilled by BP. The well ceased production in 1996. In 2005, the well was sidetracked to appraise a possible field extension to the west. This well (30/18b-42), was subsequently completed as a producer and came onstream in November 2005. The Orion field, which came onstream in September 1999, was initially developed as a single-well, subsea tie-back to the Clyde platform. Two further wells were drilled on Orion in 2005 and 2006. Leven North began production via an extended reach well drilled from the Clyde platform in August 2000. A second producer was drilled during late 2003. The Nethan field, which was discovered by well 30/17b-A39Z drilled from the Clyde Platform, was brought onstream via an extended well test during May 2004.

Transportation
Clyde Area crude is transported by a 16-inch diameter pipeline to the Fulmar platform, located ten kilometres to the west. Since early 1997, liquids have been exported from Fulmar via the CNSEP (Central North Sea Evacuation Project) spurline, then onward to the ConocoPhillips-operated terminal facilities at Teesside. The CNSEP is 16 kilometres long and 24-inches in diameter, running from the Fulmar 'AD' platform to a 'Y' piece midway in the J-Block to Norpipe line. Due to lower operating costs than those of the offshore loading system, the CNSEP line has extended the life of the Fulmar fields. In addition, the line was designed with excess capacity to handle further third party exports. Prior to 1997, crude was evacuated from Fulmar via the Fulmar offshore loading system. The Fulmar floating storage unit was damaged in 1989, which seriously affected production from Clyde in 1989 (see Production section). Gas used to be exported from Clyde to Fulmar via a 16-inch diameter line, then onward via the Fulmar Gas pipeline to the terminal facilities at St Fergus.

Pipeline Summary
Pipeline Type From To Length Diameter (km) (inches) 289 350 20 34 Capacity ('000 b/d,mmcfd) 500 810

Fulmar A - St Fergus Norpipe Oil Pipeline

Gas Fulmar St Fergus(Shell) Oil Ekofisk Teesside (Oil) I Terminal

Source: Wood Mackenzie

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Clyde Area

Central North Sea

Costs
Capital Costs
The estimated capital costs of the Clyde project are detailed in the accompanying table. Capital expenditure for gas disposal has not been included. The final development cost total represents a substantial saving on the original budget of just under £1 billion. All exploration and appraisal costs have been excluded.

Capital Costs Pre-2003 to 2011 (£ million)
Clyde Production Facilities Clyde Processing Equipment Medwin Production Facilities Medwin Processing Equipment Leven Product. Facilities Nethan Product. Facilities Clyde Development Drilling Medwin Development Drilling Leven Development Drilling Leven North Development Drilling Nethan Development Drilling Pipeline Sustaining Capex Decommissioning Costs Total
Source: Wood Mackenzie Nominal to 2012 and real (in 2012 terms) thereafter.

Pre-2003 2003 2004 2005 2006 2007 2008 2009 2010 199 3 9 6 183 1 1 0 0 2 1 1 1 1 0 0 170 8 8 18 8 20 20 7 9 17 8 8 4 1 20 30 9 6 636 17 18 27 18 27 20 10 6

2011 12 12

Capital Costs 2012 to Post-2020 (£ million)
Clyde Production Facilities Clyde Processing Equipment Medwin Production Facilities Medwin Processing Equipment Leven Product. Facilities Nethan Product. Facilities Clyde Development Drilling Medwin Development Drilling Leven Development Drilling Leven North Development Drilling Nethan Development Drilling Pipeline Sustaining Capex Decommissioning Costs Total
Source: Wood Mackenzie Nominal to 2012 and real (in 2012 terms) thereafter.

2012 2013 2014 2015 2016 2017 2018 2019 2020 40 40 2 2 16 5 5 5 5 5 3 42 42 16 5 5 5 5 5 3

Post-2020 7 144 151

Operating Costs
Prior to 1997, a tariff of approximately £2.00/barrel was payable for use of the Fulmar facilities including export costs. Between January 1997 and January 2001, we have assumed a tariff of £1.00/barrel payable to the Fulmar group to cover handling costs and £1.00/barrel payable for the use of Norpipe and for processing at the Teesside terminal facilities. From the start of 2001, these tariffs were believed to have been renegotiated to £0.70/barrel payable to the Fulmar facilities, and £0.80/barrel payable to the Norpipe and Teesside Oil Terminal facilities. The fields are currently assumed to pay £0.85/bbl to Fulmar, and £1.00/bbl to Norpipe and Teesside Oil Terminal. The Flyndre and Cawdor fields, which we assume will be tied back to Clyde, are expected to come onstream in late 2013 and 2014 respectively. We assume the Clyde partners will receive a production tariff for the use of its processing and export facilities. However, following commercial negotiations, it is also possible that Flyndre and Cawdor will join the existing Clyde Area opex share, which includes Orion.

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Clyde Area

Central North Sea

We have modelled costs associated with the European Union Emission Trading Scheme (EUETS) from 2013. We have shared costs between the carbon dioxide (CO2) emitting facilities at Clyde and tie-backs on a production throughput basis. Please refer to the Economic Assumptions section to view our carbon price assumptions. Total operating costs for the Clyde Area are detailed in the accompanying table.

Operating Costs 2011 to 2020 (£ million)
Direct Costs Tariff Oil EUETS Costs G&A Total 2011 23.4 1.6 2.3 27.3 2012 26.3 2.1 2.3 30.7 2013 35.0 2.8 0.6 2.3 40.7 2014 41.2 3.0 0.4 2.3 46.9 2015 33.0 2.4 0.4 2.0 37.8 2016 31.0 2.0 0.4 2.0 35.4 2017 31.0 1.8 0.4 2.0 35.2 2018 27.0 1.6 0.5 2.0 31.1 2019 27.0 1.4 0.5 2.0 30.9 2020 27.0 1.3 0.4 2.0 30.7

Source: Wood Mackenzie Nominal to 2012 and real (in 2012 terms) thereafter.

Sales Contracts
Talisman originally sold its volumes of sales gas from the Clyde Area to Shell and ExxonMobil. Export of sales gas ceased in 1999 and all associated gas production is now used for fuel and gas lift purposes on the Clyde platform.

Taxation
Development Approval after 1 April 1982 but prior to 15 March 1993
The Clyde, Leven and Medwin fields received development approval after 1 April 1982 but prior to 15 March 1993 and are therefore exempt from royalty payments but are liable for Petroleum Revenue Tax (PRT), Corporation Tax and Supplementary Charge. Please refer to the Fiscal Terms section in the Country Overview for a detailed description of the terms applying.

Development Approval post 15 March 1993
The Nethan field is liable for Corporation Tax and Supplementary Charge. Please refer to the Fiscal Terms section in the Country Overview for a detailed description of the terms applying.

Economic Assumptions
A cash flow has been prepared for the Clyde Area, using the following economic assumptions. It has been run on a stand-alone basis using Wood Mackenzie's Global Economic Model (GEM). It does not reflect corporate synergies. These are included in company valuations, which can be produced in GEM and also in Wood Mackenzie's Corporate Analysis Tool (CAT).

Cash flow
The following cash flow is in nominal terms.

Discount rate and date
Wood Mackenzie's discount rate is 10% nominal. The discount date is 1 January 2013.

Inflation rate
Wood Mackenzie's inflation rate is 2% from 2012 onward.

Oil price
Wood Mackenzie's Brent oil price assumption (nominal terms) is US$109.37/bbl in 2012, US$105.25/bbl in 2013, US$100.00/bbl in 2014, US$96.00/bbl in 2015 and US$92.00/bbl in 2016, inflated at 2% per annum thereafter. This equates to a long-term Brent price assumption of US$85.00/bbl (real, 2012 terms) from 2016 onward. We assume that Clyde Area crude receives the Brent price.

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Clyde Area Carbon price

Central North Sea

The Wood Mackenzie carbon price assumption for UK installations participating in the European Union Emissions Trading Scheme (EUETS) in nominal terms is €20.56/CO2 tonne in 2013, €23.72/CO2 tonne in 2014 and €26.88/CO2 tonne in 2015.

Exchange rate
The £/US$ exchange rate is £0.64/US$1 in 2012, £0.65/US$1 in 2013 and £0.63/US$1 from 2014 onward. The £/€ exchange rate is £0.84/€1 in 2013 and £0.84/€1 from 2014 onward.

Fiscal terms
We have incorporated all approved changes to the UK fiscal regime, up to and including September 2012.

Global Economic Model (GEM) file
The corresponding GEM company file name is ZZ_Grp Clyde Area.cpy The corresponding GEM file names are Clyde, Leven, Medwin and Nethan.

Cash Flow
Cash Flow (US$ million)

Europe (UK) Upstream Service - October 2012

Page 13 of 19

Clyde Area Cash Flow Dollars
Year Production Liquids Gas 000b/d mmcfd 0.0 0.0 0.0 0.0 0.0 32.0 51.5 35.0 38.0 34.5 28.5 25.5 21.5 19.3 15.6 16.7 13.9 12.9 11.7 10.2 8.5 7.1 9.4 7.4 7.1 4.0 2.7 3.2 2.7 2.4 3.1 4.2 4.4 3.6 3.0 2.6 2.4 2.1 1.9 1.7 1.5 1.4 1.3 1.2 1.1 0.0 0.0 0.0 0.0 0.0 166.8 0.0 0.0 0.0 0.0 0.0 9.0 23.0 9.0 0.0 6.0 6.0 7.0 7.5 8.0 6.0 6.0 5.5 6.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 36.2 Total PV Rem PV Gross Revenue US$M 0.0 0.0 0.0 0.0 0.0 227.8 313.2 244.3 329.0 262.5 211.0 168.4 136.2 133.0 128.0 128.0 76.5 95.7 123.8 92.3 77.8 74.5 131.5 148.8 170.6 106.0 96.9 72.7 79.3 98.6 125.4 162.1 164.9 131.2 105.1 93.1 87.7 78.7 72.8 66.7 60.4 57.6 54.0 50.4 46.3 0.0 0.0 0.0 0.0 0.0 5082.9 22421.6 788.1 Op Costs US$M 0.0 0.0 0.0 0.0 0.0 71.0 111.5 84.5 96.0 90.5 84.8 66.1 64.1 56.7 50.0 52.1 47.0 42.0 36.3 33.1 29.8 31.9 37.4 37.1 46.2 48.3 79.2 57.9 33.6 44.0 47.8 63.7 77.2 63.6 60.9 61.7 55.5 56.3 57.0 56.1 51.1 50.1 46.1 42.9 41.0 0.0 0.0 0.0 0.0 0.0 2262.0 8286.9 456.4 Capital Costs US$M 10.3 68.1 139.8 155.3 176.1 103.5 35.6 32.8 8.9 8.8 61.8 6.0 6.6 7.1 10.5 32.8 24.9 8.1 12.1 17.3 18.0 27.0 31.5 49.1 33.2 54.1 37.1 14.9 9.2 19.4 65.6 65.9 26.4 8.4 8.6 8.8 8.9 9.1 5.6 3.8 2.9 3.0 2.0 2.1 0.0 92.9 93.7 126.7 0.0 0.0 1754.2 11547.6 193.4 Royalty US$M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PRT + SPD/APRT US$M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Corp. Tax US$M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 38.0 13.1 28.9 19.6 20.7 21.5 12.3 11.4 17.0 20.9 12.5 5.3 9.6 24.3 23.7 4.2 0.0 0.0 3.4 8.7 5.6 7.5 15.5 17.9 13.0 8.0 6.9 4.9 3.3 2.4 1.9 1.5 1.6 1.7 1.6 -18.1 -28.0 -34.7 -12.7 0.0 294.8 1257.5 40.9

Central North Sea

Suppl. Charge US$M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 1.4 3.2 8.1 10.4 2.8 0.0 0.0 2.3 7.9 5.7 8.0 16.5 19.0 13.8 8.6 7.3 5.3 3.6 2.5 2.1 1.6 1.7 1.8 1.7 -11.9 -18.7 -23.1 -8.5 0.0 74.0 123.4 51.9

Bonus US$M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Field Cash Flow US$M -10.3 -68.1 -139.8 -155.3 -176.1 53.3 166.1 127.1 224.1 163.1 26.5 83.1 36.6 49.6 46.9 21.7 -7.7 34.2 58.4 20.9 16.6 9.1 49.7 30.2 57.1 -3.4 -19.3 0.1 30.8 18.6 0.7 16.9 29.3 22.2 8.9 6.1 9.1 3.1 3.3 2.0 2.3 1.4 2.5 2.0 2.0 -63.0 -47.0 -68.8 21.1 0.0 697.8 1206.1 45.5

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Totals: PVs

Source: Wood Mackenzie Discounted at 10.0% from 01/01/2013

Europe (UK) Upstream Service - October 2012

Page 14 of 19

Clyde Area

Central North Sea

Discount Rate % 0.0 5.0 7.0 8.0 9.0 10.0 11.0 12.0 15.0

Total PV Post-Tax Pre-Tax US$M US$M 697.8 1266.8 1416.2 1428.8 1369.8 1206.1 893.4 372.8 -3340.0

Remaining PV Remaining PV/boe Total Total Remaining Remaining Post-Tax Pre-Tax Post-Tax Pre-Tax Gov. Take Gov. Take Gov. Take Gov. Take US$M US$M US$ US$ US$M % US$M % -46.6 19.5 33.0 38.0 42.1 45.5 48.2 50.4 54.5 55.0 -21.0 97.6 119.7 127.5 133.6 138.2 141.7 144.3 147.5 136.7 -3.95 1.65 2.79 3.22 3.57 3.85 4.08 4.27 4.61 4.65 -1.78 8.27 10.13 10.79 11.31 11.70 12.00 12.21 12.48 11.57 368.9 730.3 939.9 1067.3 1213.2 1381.0 1574.1 1796.8 2692.5 10813.3 34.6 36.6 39.9 42.8 47.0 53.4 63.8 82.8 n/a n/a 25.6 78.1 86.7 89.5 91.4 92.8 93.5 93.9 93.0 81.7 n/a 80.0 72.5 70.2 68.5 67.1 66.0 65.1 63.1 59.8

P/I Capex Opex Ratio Boe Boe US$ US$ 1.4 10.13 13.06 1.3 22.77 22.33 1.2 34.45 29.72 1.2 42.78 34.65 1.2 53.33 40.63 1.1 66.69 47.86 1.1 83.57 56.60 1.0 104.85 67.15 0.9 207.64 113.58 0.6 1937.11 681.15

1066.7 1997.1 2356.1 2496.0 2583.0 2587.1 2467.6 2169.6 -647.5 25.0 -124272.5 113459.1 Source: Wood Mackenzie

Discount Date Remaining Liquid Reserves (mmbbl) Remaining Gas Reserves (bcf) Total Remaining Reserves (mmboe) Total Reserves (mmboe) Company IRR (post tax) Pre-tax IRR Payback Period (years) Reserve life at current production (years) Source: Wood Mackenzie

Jan-13 11.8 0 11.8 173.2 12.51% 14.58% 9.7 7.7

Split of Revenues
$M Net Cash Flow Govt. Take Costs

400
300 200 100 0 -100 -200 -300

2006

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

Source: Wood Mackenzie

Cumulative Net Undiscounted
$M 1000 500 0 -500 -1000

Cash

Flow

-

Cumulative Net Cash Flow - Discounted at 10% from 01/01/2013
$M 2000 0 -2000 -4000 -6000 -8000 -10000

1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030

Source: Wood Mackenzie

Source: Wood Mackenzie

Europe (UK) Upstream Service - October 2012

1982 1987 1992 1997 2002 2007 2012 2017 2022 2027

2030

Page 15 of 19

Clyde Area
Remaining Revenue Distribution (Discounted at 10% from 01/01/2013)
Total = $ 788M

Central North Sea

Capex 25%

Opex 58%

Corp. Tax 5% Suppl. Chg. 6% Net Cash Flow 6%

Source: Wood Mackenzie

Remaining Present Value Price Sensitivities

70

Liquid Production Gas Production Liquid Price

Remaining PV Post-tax (£M)

60 50 40 30 20 10 0 -20% -10% 0% +10% +20%

Gas Price Capex Opex (excl. Tariffs) Tariff Payments

-10
-20

Tariff Receipts

Source: Wood Mackenzie

Cash Flow (£ million)

Europe (UK) Upstream Service - October 2012

Page 16 of 19

Clyde Area Cash Flow Local
Year Production Liquids Gas 000b/d mmcfd 0.0 0.0 0.0 0.0 0.0 32.0 51.5 35.0 38.0 34.5 28.5 25.5 21.5 19.3 15.6 16.7 13.9 12.9 11.7 10.2 8.5 7.1 9.4 7.4 7.1 4.0 2.7 3.2 2.7 2.4 3.1 4.2 4.4 3.6 3.0 2.6 2.4 2.1 1.9 1.7 1.5 1.4 1.3 1.2 1.1 0.0 0.0 0.0 0.0 0.0 166.8 0.0 0.0 0.0 0.0 0.0 9.0 23.0 9.0 0.0 6.0 6.0 7.0 7.5 8.0 6.0 6.0 5.5 6.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 36.2 Gross Revenue £M 0.0 0.0 0.0 0.0 0.0 138.9 175.8 149.1 184.3 148.4 119.5 112.1 88.9 84.3 82.0 78.1 46.1 59.2 81.7 64.1 51.8 45.6 71.8 81.8 92.6 53.0 52.3 46.5 51.6 61.1 80.2 105.4 103.9 82.7 66.2 58.6 55.3 49.6 45.9 42.0 38.0 36.3 34.0 31.8 29.2 0.0 0.0 0.0 0.0 0.0 3079.2 Op Costs £M 0.0 0.0 0.0 0.0 0.0 43.3 62.6 51.6 53.7 51.2 48.0 44.0 41.9 35.9 32.0 31.8 28.4 26.0 24.0 23.0 19.8 19.5 20.4 20.4 25.1 24.1 42.8 37.0 21.8 27.3 30.6 41.4 48.6 40.1 38.3 38.8 35.0 35.5 35.9 35.3 32.2 31.5 29.0 27.1 25.8 0.0 0.0 0.0 0.0 0.0 1380.6 4956.3 288.8 Capital Costs £M 5.9 44.9 104.6 121.1 120.0 63.1 20.0 20.0 5.0 5.0 35.0 4.0 4.3 4.5 6.7 20.0 15.0 5.0 8.0 12.0 12.0 16.5 17.2 27.0 18.0 27.1 20.0 9.5 6.0 12.0 42.0 42.8 16.7 5.3 5.4 5.5 5.6 5.7 3.5 2.4 1.8 1.9 1.3 1.3 0.0 58.6 59.0 79.8 0.0 0.0 1128.0 7855.7 123.1 Royalty £M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PRT + SPD/APRT £M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Corp. Tax £M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 21.5 8.7 18.9 12.4 13.2 13.1 7.4 7.1 11.2 14.5 8.3 3.2 5.3 13.4 12.9 2.1 0.0 0.0 2.2 5.4 3.6 4.9 9.8 11.3 8.2 5.1 4.3 3.1 2.1 1.5 1.2 1.0 1.0 1.1 1.0 -11.4 -17.7 -21.9 -8.0 0.0 180.9 776.1 25.9

Central North Sea

Suppl. Charge £M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.8 1.8 4.5 5.7 1.4 0.0 0.0 1.5 4.9 3.6 5.2 10.4 12.0 8.7 5.4 4.6 3.3 2.2 1.6 1.3 1.0 1.1 1.1 1.1 -7.5 -11.8 -14.6 -5.3 0.0 44.6 73.7 32.8

Bonus £M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Field Cash Flow £M -5.9 -44.9 -104.6 -121.1 -120.0 32.5 93.2 77.5 125.5 92.2 15.0 55.3 23.9 31.4 30.1 13.2 -4.7 21.1 38.5 14.5 11.1 5.5 27.1 16.6 31.0 -1.7 -10.4 0.0 20.0 11.5 0.4 11.0 18.4 14.0 5.6 3.8 5.7 1.9 2.1 1.2 1.5 0.9 1.6 1.2 1.3 -39.7 -29.6 -43.4 13.3 0.0 345.1 -311.2 29.0

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Totals: PVs

Total PV 13350.6 Rem PV 499.6 Source: Wood Mackenzie Discounted at 10.0% from 01/01/2013

Europe (UK) Upstream Service - October 2012

Page 17 of 19

Clyde Area

Central North Sea

Discount Rate %

Total PV Post-Tax £M Pre-Tax £M

Remaining PV Post-Tax £M -29.0 12.6 21.1 24.3 26.9 29.0 30.7 32.1 34.6 34.9

Remaining PV/boe

Total

Pre-Tax Post-Tax £M £ -12.6 62.2 76.0 80.9 84.8 87.7 89.9 91.5 93.5 86.7 -2.46 1.07 1.79 2.05 2.27 2.45 2.60 2.71 2.93 2.96

Pre-Tax Gov. Take £ £M -1.06 5.26 6.44 6.85 7.18 7.43 7.61 7.75 7.92 7.34

Total Remaining Remaining P/I Gov. Take Gov. Take Gov. Take Ratio % £M % 16.5 49.5 54.9 56.7 57.9 58.7 59.2 59.4 58.9 51.8 n/a 79.7 72.3 70.0 68.3 67.0 65.9 65.0 63.0 59.7 1.3 1.2 1.1 1.1 1.0 1.0 0.9 0.9 0.8 0.5

Capex Boe £ 6.51 15.15 23.16 28.88 36.15 45.37 57.03 71.75 143.05 1351.17

Opex Boe £ 7.97 13.47 17.86 20.78 24.33 28.62 33.81 40.06 67.56 402.44

0.0 345.1 570.6 5.0 475.8 924.6 7.0 369.2 947.2 8.0 235.1 891.6 9.0 18.4 764.8 10.0 -311.2 538.6 11.0 -793.5 175.3 12.0 -1480.2 -374.4 15.0 -5541.0 -3884.2 25.0 -109905.8 -103270.0 Source: Wood Mackenzie

225.5 39.5 448.8 48.5 578.0 61.0 656.5 73.6 746.4 97.6 849.8 157.8 968.7 552.7 1105.8 n/a 1656.9 n/a 6635.8 n/a

Discount Date Remaining Liquid Reserves (mmbbls) Remaining Gas Reserves (bcf) Total Remaining Reserves (mmboe) Total Reserves (mmboe) Company IRR (post tax) Pre-tax IRR Payback Period (years) Reserve life at current production (years) Source: Wood Mackenzie

Jan-13 11.8 0 11.8 173.2 9.07% 11.36% 9.7 7.7

Europe (UK) Upstream Service - October 2012

Page 18 of 19

Clyde Area

Central North Sea

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Europe (UK) Upstream Service - October 2012

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