P2252

P2252 is a 28th Round licence located to the north west of the Breagh gas field, which commenced production in 2013.  Cluff have identified a number of high quality exploration and appraisal targets within Zechstein carbonates including the Pensacola Reef Prospect which has gross P50 recoverable resources of 309 BCF.  The Zechstein reef play is a proven producer elsewhere in the basin and the only well testing this play in the UKCS was drilled at the nearby Crosgan discovery which also successfully flowed gas to surface.

Block Details
Licence No: P2252
Blocks: 41/5a, 41/10a, 42/1a
Area: 357.8km2
Equity position: 30%
Operator: Shell U.K. Limited

Pensacola Reef Prospect

The Pensacola prospect is a Z2 Zechstein reef partially mapped on 3D seismic data and is analogous to similar structures identified on adjacent blocks. The reef is 15km long by 6km wide and clearly defined on 2D and 3D seismic and builds to more than 200m above the surrounding Z2 (Hauptdolomite) platform.

The Pensacola prospect may contain upto 982 BCF of gas initially in place with an estimated gross P50 recoverable resource of 309 BCF.  A number of potential commercialisation options exist via the existing Breagh infrastructure or a new pipeline to Teesside.

Gas has already been proven in the Zechstein on block in the three wells drilled to test the Lytham-Fairhaven structure and the overlying anhydrite encases the reef providing a near perfect seal.

Similar Zechstein reef structures produce hydrocarbons in Poland, Netherlands and western Canada but are effectively untested in the UKCS with the exception of the nearby Crosgan well which successfully flow gas to surface from a similar reefal structure. The Pensacola prospect provides an opportunity to drill a play opening well in a play with significant running room in the play based on the number of reefal structures identified locally.

Shell U.K. Ltd Farm-in to P2252

On 8th February the Company announced that Shell U.K. Ltd were farming in to Licence P2252 and the Pensacola prospect.  Following completion of the transaction in Q2 2019 Cluff will transfer Operatorship and a 70% working interest in Licence P2252 to Shell in return for Shell funding 100% of the costs of a 400km2 3D seismic acquisition programme over Pensacola in the summer of 2019.  Shell will also fund the associated processing of the acquired data and various petro-technical studies until a well investment decision or the end of 2020, whichever is sooner.

There is a contingent well commitment associated with the licence and it is expected that this well could be drilled in 2021.  Costs associated with exploration well will be split in line with working interest.

Lytham and Fairhaven Appraisal Opportunity

The Lytham-Fairhaven appraisal opportunity is located across blocks 41/5 and 41/10 takes the form of a large 4-way dip closed N-S oriented anticline compartmentalised by a series of roughly E-W oriented faults.  The key reservoir is a fractured Hauptdolomite platform carbonate and wells 41/5-1 (Walter Petroleum, 2004), 41/10-1 (Marathon, 1993) and 41/10-2Z (Lundin, 2007) have demonstrated the presence of gas in the Zechstein but what limited testing was attempted failed to flow gas due to various technical issues during drilling.

The next logical next step for the prospect is to drill a directional appraisal well perpendicular to the intense fracture oriented with the axis of the anticline to demonstrate the ability of the reservoir to deliver gas from the fracture network at commercial rates

The Lytham-Fairhaven prospect is estimated to contain gross recoverable resources of between 70 BCF and 190 BCF with a Gross Best Estimate (P50) Resource of 168 BCF.

Resource Summary

Licence P2252 contains a number of significant prospects in the Zechstein and Carboniferous which have a combined P50 Prospective Resources of 636 BCF.

Licence Ref CLNR Equity Prospect Type PRMS Status Net Prospective Resource (BCF) Risk Factor %
P90 P50 Mean P10
P2252 30% Pensacola Hauptdolomite Reef Prospect 35 93 102 179 20
30% Lytham Fractured Hauptdolomite Prospect 15 37 41 73 49
Carboniferous Prospect 4 13 20 45 30
Fairhaven Fractured Hauptdolomite Prospect 5 14 16 29 43