RUSSIA

Orenburg Oblast is situated within the Russian Federation, west of the Ural Mountains, and close to the southern border with Kazakhstan. The city of Orenburg is approximately 1,300 km from Moscow with a population of over half a million people. The city is an important regional centre particularly within the energy industry.

Arkhangelovskoe Licence

Matra owns 100% in the Arkhangelovskoe Production licence through its 100% owned Russian subsidiary “OOO” (Limited Liability Company) Arkhangelovskoe.

The Arkhangelovskoe Production licence covers an area of 87.68 sq km and is 20-30kms to the North of the city of Orenburg (Figure 1). The licence is within the oil rich Volga-Urals basin and lies adjacent to existing oil fields and close to the super-giant Orenburg gas field.

In this area, oil is found in reservoirs of Devonian age, at depths between 3,500 and 4,000m. For historical reasons Orenburg is relatively underdeveloped and explored by comparison with neighbouring oblasts but recent exploration success rates have been high. TNK-BP, the largest operator in Orenburg, is very active in the Northern area of Orenburg. There are few international companies active in the oblast.

Matra’s first well on the Arkhangelovskoe Exploration Licence,  “A12”, was drilled in 2007 and discovered the Sokolovskoe oilfield (Figure 2). The well produced high quality oil from a Devonian carbonate reservoir (Aphonenski).  This was appraised by well “A13”, which completed operations in summer of 2010. The Arkhangelovskoe Production Licence was awarded 22nd December 2010, and is valid to 31st December 2030.

 

 

Equipoise used the data from well A13, in combination with existing well and seismic data, to create a new depth map of the reservoir horizon.  This shows  the Sokolovskoe Field structure to be more extensive than first estimated and to extend over ten kilometres to the north-east from the A12 and A13 wells. 

Based on the results of the Equipoise study and all other field data, Energy Resource Consultants Ltd (“ERC”), an independent reservoir evaluation company, were retained to complete a Competent Persons Report (CPR) on the Sokolovskoe Field.  The covering letter from this report and definitions pertaining to that letter can be found by following the link at the base of this page.

Contingent Resources

ERC’s estimates of stock tank oil initially in place (STOIIP), recovery factor and Contingent Resources of oil are given in Table 1:

• The formal issue of the Production Licence (Issued 22/12/2010).

• The adoption by the Board of Matra of an appropriate Field Development Plan and its approval by the appropriate regulatory authorities

ERC note that once these contingencies are satisfied these estimates may be classified as Recoverable Reserves under Society of Petroleum Engineers (“SPE”) guidelines subject to appropriate economic analysis.

Deterministic Resource Estimate

The 1C and 2C estimates of Contingent Resources above are largely attributable to the South-Western area surrounding wells A12 and A13. ERC concluded that, in order to meet with SPE guidelines, further seismic and drilling would be required before including additional volumes from the North-Eastern area.  

ERC estimated Recoverable Resources based on the current mapping of the entire Sokolovskoe structure to be 23.7 million barrels. This estimate is outside SPE guidelines but provides an indication of potential results as further seismic acquisition and drilling in the field progress.

Valuation of Contingent Resources

ERC completed a review of the economic benefit of developing 15 million barrels (2C estimate) of oil from the Sokolovskoe Field. The review was based on Matra’s in-house scoping model and data supplied by Matra, (as audited by ERC). The model assumes full taxation in Russia and that oil is sold into the domestic market at a price equivalent to 52% of the Urals Blend, which in turn is assumed to be a constant $75/bbl.

ERC concluded that the net present value (at 10% discount rate) for 15 million barrels is in the range of US$60-80 million.

Prospective Resources

There are two sources of further upside within the Sokolovskoe Field and these are described as Prospective Resources within the CPR. These will be evaluated during the normal drilling of production wells.

Firstly, there are deeper permeable horizons below the oil reservoir, as seen in A12 and A13 which are water bearing at these locations, but, rise above the field oil-water contact in the highest parts of the structure, and therefore should be oil bearing. These deeper horizons, called layers 1B and 2B, are depicted below in Figure 3.

Figure 3

Secondly, in currently undrilled parts of the field, seismic and geological evidence suggests thicker, better quality reservoir may occur as preserved patch reefs in close proximity to existing wells.  The areas of potential patch reefs mapped by the Equipoise study and depicted graphically are shown in Figure 4.

Figure 4

Prior to drilling A13 the data suggested the existence of a typical Devonian barrier reef to the east of A12. A detailed analysis of core recovered from A13 however, indicates that this area was a gently sloping shelf with smaller patch-reefs located over it.  This analysis together with seismic data suggests that both A12 and A13 are close to preserved in-situ patch reefs with thicker, better quality reservoir.  The presence of such patch reefs may be confirmed during future appraisal and development drilling.

The combined potential of these two prospective resources assessed by Equipoise/ERC is shown in Table 2 below.