Enlightened Reservoir Management Stingray Geophysical Limited Company Confidential

Enlightened Reservoir Management ? © Stingray Geophysical Limited Company Confidential

Permanent Reservoir Monitoring - Enlightening Reservoir Management • • Why do we need seismic reservoir monitoring ? Reminder – what is 4 D (time-lapse) / PRM seismic ? Reported success of 4 D seismic to date What additional value does PRM bring ? What are the hurdles to implementing PRM ? ……. and how can they be overcome ? Case study © Stingray Geophysical Limited Company Confidential

Why do we need seismic reservoir monitoring ? We Don’t ! IFF • We have a perfect static and dynamic model of the reservoir • We have perfect knowledge of fluid behaviour • We have perfect knowledge of impact of production on overburden • ……. © Stingray Geophysical Limited Company Confidential 3

‘Laws' of heterogeneity 1. All reservoirs are heterogeneous 2. All reservoirs are more heterogeneous than first imagined 3. The degree of reservoir heterogeneity increases as the reservoir is produced © Stingray Geophysical. Limited © Stingray Geophysical Company Confidential 4 4

Well-centric approach to reservoir management © Stingray Geophysical Limited Company Confidential

Permanent Reservoir Monitoring - Enlightening Reservoir Management • Why do we need seismic reservoir monitoring ? ØReminder – what is 4 D (time-lapse)/PRM seismic? • Reported success of 4 D seismic to date • What additional value does PRM bring ? • What are the hurdles to implementing PRM ? • ……. and how can they be overcome ? • Case study © Stingray Geophysical Limited Company Confidential

What is 4 D seismic ? • Repeat acquisition of 3 D seismic surveys on a time frame of 2 -5 years • Seismic attribute changes may be linked to reservoir property changes such as Sw • Has been used effectively in identifying by-passed pay for infill drilling © Stingray Geophysical Limited Company Confidential 7

What is Permanent Reservoir Monitoring ? • Permanently installed array of (seismic) sensors on sea floor • Repeat seismic surveys on 3 -6 month time period • Continuous recording of microseismic • Integrated into reservoir and production management workflow © Stingray Geophysical Limited Company Confidential 8

Permanent Reservoir Monitoring - Enlightening Reservoir Management • Why do we need seismic reservoir monitoring ? • Reminder – what is 4 D (time-lapse) / PRM seismic ? ØReported success of 4 D seismic to date • What additional value does PRM bring ? • What are the hurdles to implementing PRM ? • ……. and how can they be overcome ? • Case study © Stingray Geophysical Limited Company Confidential

Example of 4 D success • BP implemented a systematic programme of 4 D surveys over N. Sea fields from 1999 – 2003 • 4 D contributed value through • infill drilling • dynamic reservoir model As of 2003 calibration • monitoring water sweep • Supporting divestments • Success of programme led to PRM installations on Valhall and Clair Whitcombe et al, SEG 2004 © Stingray Geophysical Limited Company Confidential 10

Permanent Reservoir Monitoring - Enlightening Reservoir Management • Why do we need seismic reservoir monitoring ? • Reminder – what is 4 D (time-lapse) / PRM seismic ? • Reported success of 4 D seismic to date ØWhat additional value does PRM bring ? • What are the hurdles to implementing PRM ? • ……. and how can they be overcome ? • Case study © Stingray Geophysical Limited Company Confidential

Seismic Surveillance Through Field Life R EO fil In Production l Base Time Protection of sanction reserves Basis of Design Cost-effective resource access Gas Handling Reservoir Plumbing Expln & App drilling Development cost $/bbl Uncertainty Plateau Production Predrill wells Plateau Management Water-flood Management Gas injection Management Infill Optimisation Phased Development & Well management Activities Recovery of most challenging resources Field-life/Co. P Extension Enhanced Oil Recovery (EOR) Infill Drilling & Well Management CCS ? Facilities Extension Decommissioning Wells Expln/ App Seismic Baseline Survey Regular seismic surveys. Frequency controlled by value Seismic Courtesy Giles Watts © Stingray Geophysical Limited Company Confidential

PRM conceptual model m t en a Te m r oi Optimize rv e s well location Re 1. Static Acquire Process PRM Products Interpret & analyze Update ge a n a M l el W 2. g in am e T n an l P 3. se a B Model & Plan & Optimize Simulate Drill Well Work t en m ge a n a M Dynamic Define Well Work Plan Depletion Plan: • Production Forecast • Well Schedule • Surveillance and Technology Plan EAGE annual conference 2009 Update & Improve © Stingray Geophysical Limited Company Confidential 13 am e T

Life of Field Depletion Planning 1 – 5 yrs Strategic Field Development Reserves Recovery Timing of Data to Decisions Years Towed Streamer 4 D 1 -3 Years Production Operations Real time Surveillance & Base well Mgmt Field Operations 1 day – 3 months Real-time Data Production Optimisation Infill Drilling Field Management 1 month – 1 year Courtesy Giles Watts Identify Barriers Waterflood Management Months PRM surveys 3 -6 months Gas Inj. Monitoring Weeks Days Hours PRM Continuous Pressure Testing Minutes © Stingray Geophysical Limited Company Confidential

Value of PRM (e. g. from Valhall) Improve Static Reservoir Model • Defining the container • Verifying porosity model New/Infill Well Delivery • Reducing risk, optimising well plan • Pressure prediction S-15 S-12 S-11 S-14 A-25 B Reservoir Management • Using 4 D seismic attributes in history matching 4 D RM HM Base Well Management • Production along wells, impact of faults “Seismic Surveillance in the Field-of-the-Future”, IPTC Doha, Qatar 2005 © Stingray Geophysical Limited Company Confidential

Permanent Reservoir Monitoring - Enlightening Reservoir Management • Why do we need seismic reservoir monitoring ? • Reminder – what is 4 D (time-lapse) / PRM seismic ? • Reported success of 4 D seismic to date • What additional value does PRM bring ? ØWhat are the hurdles to implementing PRM ? Ø……. and how can they be overcome ? • Case study © Stingray Geophysical Limited Company Confidential

Hurdles Economic Technical Human • $50 – 100 M Capex vs $5 -10 M p. a. OPEX (NB!) • Long term vs short term ROI SOLUTION • Value of information • Asset finance models © Stingray Geophysical Limited Company Confidential 17

Increased asset value from Seismic Reservoir Monitoring Cost of seismic reservoir monitoring Value Reduced drilling risk & cost Optimised development planning Value Added Optimised EOR Change management and workflow optimisation Improved reservoir model Initial reservoir value © Stingray Geophysical Limited Company Confidential 18

Alternative economic model Streamer Nodes Retrievable OBC WAZ Lease Permanent Cost Permanent Number of surveys © Stingray Geophysical Limited Company Confidential

Better seismic is coming your way ! The WAZ revolution Towed Streamer Towed: $5 -10 M per survey WAZ PRM Towed: $20 -40 M per survey PRM: $50 -100 M + $1 -2 M per survey © Stingray Geophysical Limited Company Confidential 20

Hurdles Economic Technical • $50 – 100 M Capex vs • Installation risk $5 -10 M p. a. OPEX (NB!) • Reliability • Integrated workflows • Long term vs short term ROI SOLUTION • Value of information • Asset finance models SOLUTION • Engineering approach • Select fit for purpose technology • Push for integrated software developments © Stingray Geophysical Limited Company Confidential 21

Fibre-optic Permanent Reservoir Monitoring Significantly improved system reliability >98% availability after 10 years No sub-sea electrical power required Lower noise (buried) Better repeatability (same location) WAZ 180 d. B dynamic range High spatial sampling Continuous passive monitoring © Stingray Geophysical Limited Company Confidential 22

Hurdles Economic Technical • $50 – 100 M Capex vs • Installation risk $5 -10 M p. a. OPEX (NB!) • Reliability $10 M OPEX • Integrated workflows • Long term vs short term ROI SOLUTION • Focus Value on of value information • Asset finance models SOLUTION • Engineering approach • Select fit for purpose technology • Push for integrated software developments Human • Timeframe to ROI • Risk aversion • Skills base • Time pressure © Stingray Geophysical Limited Company Confidential 23

Hurdles Economic Technical • $50 – 100 M Capex vs • Installation risk $5 -10 M p. a. OPEX (NB!) • Reliability • Integrated workflows • Long term vs short term ROI SOLUTION • Value of information • Asset finance models SOLUTION • Engineering approach • Select fit for purpose technology • Push for integrated software developments Human • Timeframe to ROI • Risk aversion • Skills base • Time pressure SOLUTION • Goal setting • Procedures/training • Training/integrated s/w • ? ? ? !! © Stingray Geophysical Limited Company Confidential 24

Seismic PLT – A well centric approach using 4 D seismic in Production Management bp Norge : Olav Barkved, Jean-Paul van Gestel, Lilly Bergsvik, Ian Stockden, Ruth Synnoeve, Jan H. Kommedal & Giles Watts SPE 4 D workshop Sept 2009

Introduction to Valhall • • Located in the southern part of the Norwegian sector of the North Sea Discovered in 1975, on stream in 1982, on track to produce till 2048 Over 250 wells, currently 50 active Over pressured, fractured, high porosity, low permeability Upper Cretaceous Chalk Very highly compressible with high primary recovery and very good time-lapse response Developed using horizontal prop ‘fracced’ producers Started water flood in 2006 STAVANGER ABERDEEN AMSTERDAM © Stingray Geophysical Limited Company Confidential 26

Life of Field Seismic (Lo. FS) • • • SPE 4 D workshop Sept 2009 Seismic data provide a basis for active reservoir management to monitor production and water injection 120 km of permanent seismic cables were installed at Valhall during summer 2003 that cover 75% of field Two seismic surveys acquired per year • High quality time-lapse surveys Strong time-lapse effect due to compaction 11 surveys to date, 2 more planned each year • • Observed compaction maps for 1 km Lo. FS 9 min Lo. FS 1. Observed amplitude difference maps for Lo. FS 9 min Lo. FS 1. © Stingray Geophysical Limited Company Confidential 27

Summary • Production induced 4 D seismic changes around individual perforations in a horizontal well are presented as a Seismic PLT • About 60 Seismic PLTs are generated each year at no additional cost • Seismic PLT has become an essential tool for integration and cross-disciplinary discussions SPE 4 D workshop Sept 2009 © Stingray Geophysical Limited Company Confidential 28

Conclusions • Permanent Reservoir Monitoring can ‘join the dots’ between wells and hence provides critical information on inter-well properties in a time-frame of days to months to facilitate improved reservoir management © Stingray Geophysical Limited Company Confidential 29

Questions ?