User Conference 11/14/13 Forgotten Oil & Gas Study John D. Grace Earth Science Associates Long Beach, CA 2013 User Conference Hosted by Maersk – Houston November 14, 2013

Goals High-grade opportunities for new production from dead reservoirs Develop methods for mass-batch decline curve analysis Identify non-balancing movements in field & sand reserve estimates Demonstrate data mining approach to analysis using GOM 3 User Conference 11/14/13

Decline Curve Study User Conference 11/14/13 Production Rate Number of Months On Last Production Date Estimated Current Abandonment Rate Production Estimated Remaining Recoverable Volume Statistically Estimated Decline Rate

Total Volumes & Uncertainty User Conference 11/14/ Gas (Tcf) Oil (Million Bbls) Both oil and gas scaled in BOE

Size/Frequency Reservoir Recoverable Volume User Conference 11/14/ MMCF 3 BCF 95 BCF MCF Freq. (x 1,000) M Bbls 3 MM Bbls ,000 1,500 Freq.

Largest Reservoirs Found User Conference 11/14/ Remaining Oil (Million Bbls) Reservoirs Remaining Gas (Bcf)

Where Was 2012 Production? User Conference 11/14/13

Where is the Forgotten Oil & Gas? User Conference 11/14/13

Cost Proxies User Conference 11/14/13 Dot Size Proportional to Remaining BOE

Revenue Proxies - Oil User Conference 11/14/13

Revenue Proxies - Gas User Conference 11/14/13

Decline Methodology Studied reservoirs dead at end 2009 –Applied GOM 3 Decline Curve Tool in batch –Process data to find final regime break –Apply 4 standard engineering models Corrected bias in exponential estimates Retained confidence intervals for estimates Picked best model with R 2 (R 2 0.6) –Determined current abandonment rate User Conference 11/14/13

Break in Structural Regime User Conference 11/14/13 Global Prod. Max Break in Regime Estimated

Standard Decline Models Exponential rate v time: Linear rate v cumulative prod: Hyperbolic rate v time: If exponential; harmonic; hyperbolic User Conference 11/14/13

Models Tried: Picked Best Above Threshold User Conference 11/14/13 This reservoir does not pass the R 2 >0.6 criteria

Example: WC49 Field: L04 Sand User Conference 11/14/13 L04 SandL-8 & L-4NM reservoirs (12,919-13,134) Very low & strange production A and PA-3 reservoirs (13,406-14,308). Comps produced 27 & 28 bcf respectively 6 Bcf Remaining 371 MMcf Remaining ?

Wheres the Potential in WC49? User Conference 11/14/13

Plus: Dead but Not Declining User Conference 11/14/13

Look Where Reserves Do Not Balance User Conference 11/14/13

Found in Reserve Histories User Conference 11/14/13 6 BBL 4 BBL 34 TCF18 TCF 5 BBL 3.6 BBL 17 TCF 32 TCF Fields Sands

Next steps Get input from these presentations Complete analysis of Reserve Histories Final revisions to numbers & software Produce deliverables Decide on marketing strategy User Conference 11/14/13