Shafaq-Asiman Appraisal Work Shop

Mark Kiely, Sunbury Wells, 3rd May 2016

Exploration Work Scope /Project Plan

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Shafaq-Asiman: Early version of PPFG

3
 Shafaq-Asiman: Preliminary Well design options
Pressure (s.g.)
0.8 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6
0
Tops
36” Sea bed ShafagNorthPP_Zafar connection
28” T.Absheron (se080) Syncline to Shafag North
1000
se100 Shafag_Overburden, SG

22” se130 High side PP

se150 low side PP
se160
2000 ML PP
T.Akchagyl (se180)
Low side Shmin
T.Surakhany (se200) high side Shmin
18” 36”
T.Surakhany Anhyd
high side SF
16”
3000 low side SF
Brumfield Shale Frac
TVDbrt (m)

16” Expandable ( 14.1” ID Post Expansion)

4000 se230
se240

13 5/8” (11 7/8” Option) Potential for 14” Casing

5000
T.Sabunchi (se250)

10” ( 9 5/8” Option)

T.Bal (se260)
6000
T.Bal8 (se274
Bal
Bal IX
IX sand
shale
T.Bal10 (se290)
Top FasB (se296)
Top D (se306 ( 7 5/8” Option)
Fas D_base
Pereriv
7000
Top NKG (se310)
5 1/2” Do we need it if 7 5/8” was used - ???

8000
 Preliminary Well Design Considerations

• SD2 Casing/Well used design as a basis with location specific alterations – versatile design
• Improved FG top Surakhany formation
• Increased PP uncertainty in Absheron formation
• 22” 1500+m TVDBR to optimize 18” Liner shoe depth (AGR System)
− If no AGR and High side PP in Absheron could lead to shallow 22” set requiring shallow 18” and introducing 16” liner as base case

• Sharp top Surakhany ramp (nearly Hz line ) – limiting 18” optimization

− 18” setting depth past 2600m TVDBR will not longer have effect on subsequent hole section

• FIT at 18” Shoe to confirm MW required for Sabunchi ramp at 4300m

• 16” Liner Contingency for week 18” shoe
− Additional 16” expandable (13 ¾” SET) – low probability however possible for unknown overburden
surprises
• 14” casing could be and option if 16” Expandable not utilized
− In case of 14” casing used, 10” pipe could be drilling liner only
• 11 7/8” could be potentially utilized in case 16” expandable deployed
• DST (Bal 8 and Fasila ); if 7 5/8” contingency deployed – perforating trough two set of pipe should be
considered -??
− If 7 5/8” is deployed and DST targeting only Fas B and Bal 8 – it would be most sensible to drop 5 ½”
and abandon NKG and lower Fas open hole.
Pilot Hole Objecives

Pilot hole (out of 28” liner shoe)

•Drill a vertical hole to planned section TD at circa 1500m
•Evaluate pilot hole to provide PP, FG and potential flow path information to
help reduce subsurface risks
− Reduce uncertainty on PP ain Absheron formation
•Evaluate pilot hole to provide PP, FG, lithology and fluid information for
planning drilling and cementing activities
− Optimize 22” setting depth (5m competent formation) deep enough to ensure 18”
set close to 2600m
− Optimize cementing strategy
− Slurry design, and placement
− Shallow sections well integrity

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 Shafaq-Asiman early cost estimate

Shafag-Asiman Exploration Well Drilled - Vertical (initial surface location)

MM$ Days Certainity Activity Summary / Assumptions

$ 147.20 200 1 Drill to Bal Reservoir Drill to Balakhany (Underreaming)
$ 40.48 55 1 Drill Bal-Fasila Res Drill and Under-ream Bal-Fas Reservoir
$ 7.36 10 1 Evaluation (Logging) E&A incremental WL data acquisition (potentially 2 hole sections)
$ - 0 1 Evaluation (Corring) SDD01 & SDC02 Basis     Heads up core
$ 64.03 87 1 Well Test NOT INCLUDED IN WELL TIME & COST EST - Testing Fasila B and Bal VIII
$ - 0 0 16" Contingency Add 1 casing to got rhough Surakhany Ramp
$ - 0 0 Extra Casing 16" Expandable (to split Surakhany)
$ - 0 0 Add 1 casing to got isolate Balakhany and Fasila B from
$ 11.04 15 1 P&A/Suspension 10d P&A + 4d pull BOP/anchors to release.  SDC04 - 4d suspension & 4d pull BOP.
$ 206.08 280 BASE ESTIMATE 116 D/10k

$ 11.04 15 0.5 Lost Circulation / Contingency Drilling Liner / Well Control Major NPT Event (UAP)
$ 18.40 25 0.5 Stuck Pipe/Twist off/Side Track/Well Control Major NPT Event (UAP)
$ 22.08 30 1 New Build Rig Major NPT Event (UAP) - could be significant exposure
$ 257.60 350 PERFORMANCE TARGET (with UAP) 145 D/10k

$ 64.40 88 AUAP 25%

$ 322.00 438 NTE (with AUAP) 181 D/10k

7350 MD/TVD

Assumptions:
Objectives are not finalized
DST not is not included in total Cost Estimate.
Rig mob/demob is not included in DST (if DST is deferred until discovery)

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 Shafaq-Asiman: LLFM for Approval

Shafaq-Asiman 2016 2017 2018 2019 2020 2021 Total Comments

Spud Late 2018
Well Execution

Rig
Rig Contract/Build Rig contracted in 2017 for PFA
20K Not-required - Current PPFG
Long Leads $ 13,300,000 $ 13,300,000.0 SD2 Actuals (Includes 3 x top-hole section strings down to 22")
Wellhead & accessries $ 1,500,000 SD2 Actual spend (SAP) $1.5MM (Back up - unused PFA Back up)

Equipment Qualification Covered in Pre-Fasila LLFM

Enfineering Studies
Environmental Study $ 200,000 $ 200,000 $ 200,000 $ 100,000 $ 100,000 $ - $ 800,000 Includes permititng/License/Waste Management
Conductor Structural Analysis $ - $ 50,000 $ 100,000 $ 50,000 $ - $ - $ 200,000 Impact of 20K BOP / Well Keeper
WC ( Well Blow-Out, Capping) $ - $ 100,000 $ 50,000 $ 50,000 $ - $ - $ 200,000 Centtral Well Control Analysis
WH Fatigue Analysis $ - $ 250,000 $ - $ - $ 250,000 Impact of 20K BOP stack on WH
Geotechnical Borehole $ 200,000 $ 300,000 $ 2,500,000 $ - $ - $ -
MPD EC-Drill $ - $ - $ - $ - $ - $ - Covered in Pre-Fasila LLFM
DST (17K+ Testing kit) $ - $ - $ - $ - $ - $ - $ - Deffer until success case
GWO Central
Manpower Resources 0.5 0.5 1.0 1.0 0.5 0.0 Inlcudes: (WC, Fluids, Cementing, Casing/Tubing Spesialists)
Cost $ 198,600 $ 198,600 $ 397,200 $ 397,200 $ 198,600 $ - $ 1,390,200
Pre-Appraise Design Documents (UK)
Manpower Resources 1.0 1.5 1.5 0.5
Cost $ 397,200 $ 595,800 $ 595,800 $ 198,600 $ - $ - $ 1,787,400
Well Planning (UK)
Manpower Resources 4.0 4.0 4.0 4.0 1.0 0.0
Cost $ 1,588,800 $ 1,588,800 $ 1,588,800 $ 1,588,800 $ 397,200 $ - $ 6,752,400
NWD Team (UK)
Manpower Resources 1.0 2.0 2.0 2.0 1.0
Cost $ 397,200 $ 794,400 $ 794,400 $ 794,400 $ 397,200 $ - $ 3,177,600
Well Planning + Ops (Baku)
Manpower Resources 1.0 6.0 6.0 3.0 1.0
Cost $ - $ 397,200 $ 2,383,200 $ 2,383,200 $ 1,191,600 $ 397,200 $ 6,752,400 Includes Enigneering and Operations
Well Construction/Delivery
$ - $ - $ - $ -
Staged Spend $ 2,981,800 $ 17,774,800
Total $ 20,756,600 LLFM 2016/17

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 LLFM Considerations

• Planning/Engineering is 6 months apart from PFA

• Lead Time – 9 months
− Late 2016 LLFM should be approved to start placing orders in 2017
• Need to plan re-spud (based on Zafar-Mashal offset)
− High potential for shallow water flow
− 3 x top hole section casing strings required
− Back-up WH could be utilized from un-used Pre-Fasila exploration project bakup(if PFA back-up
• “Non-Standard” Sizes
− 16” and 16” base pipe SET (Hanger system qualification will be required in addition to PFA
equipment qualification)
− 14” Casing
− 11 7/8”
− 7 -5/8”
• DST is not part of LLFM (Currently it is being considerate that DST is deferred until discovery)

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Zafar-Mashal Top Hole Overview
ZAF X1 PH ZAF X1APH ZAF X1A ZAF X1A PH ZAF X1A ZAF X1H
Pilot Hole
11/4/03 11/7/03 1/9/04 1/ /04 1/16/04 2/ /04

0 KB 27.5m KB 25.5m KB 25.5m KB 25.5m

Sea water

SW 622.5m SW 623.5m SW 630m SW 622m Pilot Hole was drilled up to 973m, The same
200 hole was reamed and run 30” to 893m, then was
400 run 22” to 970m, LOT –9.5ppg.
Drill ahead with 9ppg up to 1160m (Noted that,
600 there was add a heavy mud after each stand),
800 30” 30” 30”
Run 17 7/8” to 1152m. LOT-10ppg, Drill up to
764m 771m 893m 1265mwith MW 9.4ppg, LOT-10ppg, Drill up to
1000 22” 1498m, Ream hole, MW was increased up to
TD 17 7/8”970m 9.9ppg, Run 16” liner to 1491m. No information
1200 22”
1182m
1168m 1152m about LOT, probably was squeeze the shoe. The
TD Spud of main hole was
1400 on 16th Jan. hole was fill with 12.6ppg mud until 762m. No
1182m 13 5/8” Pilot Hole was drilled up
1600 1292m to 1066m, Drill and run 30” to 771m, 16” reports during 15 days.
Water Flow, Water flow at 859m, 1491m Replace mud to OBM with MW 11.5ppg, drill
1800 MW was increased up MW was inc. to 12ppg, cement and new hole up to 2293m, MW was
to 13.5ppg Water flow at 941m, increased up to 11.8pg, Ream hole, pump heavy
2000 9 5/8” Hole was fill below 815m, MW was increased up to
1985m 12.5ppg,
mud –14.5ppg from TD up to 1900m, Run 16”
Abundant
2200 Static, Abundant expandable casing to 2291m.
16”ex Drill cement and new formation, No information
2400 2291m
about LOT, Squeeze shoe, LOT twice, Drill
2600 Pilot Hole was drilled at 960m, ahead up to 2900m with MW 13.3ppg, Water
Run 22” casing, Problems, MW- Pilot Hole was
2800 9.5ppg MW was increased to 12ppg, drilled at 875m, flow during connection, MW was increased up
LOT-11.1ppg, Pump 200blls cement, Drilling was continue to 1005m, Water flow, to 13.5ppg, - well static, MW was increased
3000 LOT-10.6ppg, Drill to 1296m, Water Flow, Was drilled Pump mud- 13.7ppg, POO, Run 12.25*17.5” asm, Ream and
Increase MW to 10.2ppg, Run 13 5/8”, to 1044m, Water Flow, 12ppg drill up to 3480m,
3200 Drill to 1302m, MW to 10.5ppg, MW was increased to 13.5ppg, Static, Drill 12.25” hole up to 4320m, 5bbls water flow
Drill to 1986m, MW to 11.3ppg, Run 9 Static, Abundant Abundant
3400 during 30min, Mw was increased to 13.9ppg,
5/8”,
3600 Drill to2342m with MW 13ppg , POOH, stuck at 3797m. Hole was fill, back ream
Ream, Backream, Abundant up to 2285m, Was reported that back ream was
3800 until 1616m, which is inside 16” exs casing.
4000 Folw check-8bbls during 9.5hours. Ream hole
up to 4036m, Expandable casing was swadged
4200 in interval 2277-2291m.
13 5/8” 13 58” casing was run to 4296m, LOT –16.8ppg,
4400 4296m Drill up to 5349m with Mw 16ppg, flow check-
4600 8.5bbls water flow, MW was increased to
16.2ppg, Drill up to 5440m, Losses – 55bbls per
4800
hour, pump LCM.
5000 No report during 4 days, during this time 11 34”
11 ¾” liner was run at 5105m
5200
5105m Drilling up to 6323m (29 July) with some minor
5400 issues with MW 16.2ppg