TIDMUEN
RNS Number : 7351N
Urals Energy Public Company Limited
11 May 2018
11 May 2018
Urals Energy Public Company Limited
("Urals", "Urals Energy", the "Company" or the "Group")
Executive Summary of Competent Person's Report
The board (the "Board") of Urals Energy PCL (AIM: UEN), the
independent oil and gas exploration and production company with
operations in Russia, is pleased to announce that the Executive
Summary of the Competent Person's Report (the "CPR") prepared by
Blackwatch Petroleum Services Ltd ("Blackwatch") will shortly be
published on the Company's web site - www.uralsenergy.com
The text of Executive Summary of the CPR is reproduced below,
excluding images.
Competent Person's Report for Certain Assets in the Russian
Federation. Prepared for Urals Energy Public Company Limited
The Directors
Urals Energy Public Company Limited
Moscow,
Dear Sirs,
Subject: Competent Person's Report for Certain Assets in the
Russian Federation
In accordance with your instructions, we have conducted a
Technical Reserves & Resource Assessment of certain assets of
Urals Energy Public Company Limited ("Urals") in Siberia, and have
compiled herewith a Competent Person's Report (CPR).
The primary basis for our assessment was a package of data made
available by Urals. Where possible, we have undertaken a
review/audit of the technical work carried out by Urals and their
advisors and third party consultants that worked on the assets for
Urals. We have carried out independent estimates of reserves,
contingent resources and prospective resources and our findings are
summarised herein. In estimating hydrocarbons in place and
recoverable volumes, we have used the standard geoscience and
petroleum engineering techniques. These combine geophysical and
geological knowledge with detailed information concerning porosity
and permeability distributions, reservoir temperature and pressure
conditions and fluid characteristics.
There is of course uncertainty inherent in the measurement and
interpretation of basic data. We have estimated the degree of this
uncertainty and have used statistical methods to calculate the
range of hydrocarbons initially in place or recoverable. It should
be understood that any technical assessment, particularly one
involving exploration and future petroleum developments, may be
subject to significant variations over time as new information
become available. The resources included in this evaluation are
therefore estimates and should not be construed as exact
quantities. We have classified the prospective hydrocarbons
according to the SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS), an excerpt of which is included in Appendix 1 of
this CPR. The content of this report and our estimates of resources
are based on data provided to us by Urals.
Part-1) Executive Summary
Urals is a Cyprus-based E&P holding company focused on
operations in the Russian Federation. The company currently
operates the following 6 E&P licenses in Siberia:
-- North on Kolguyev island (2 licenses in Peschanoozerskoe) - operated by Arcticneft
-- East of Sakhalin island (2 licenses; Okruzhnoe & South Dagi) - operated by Petrosakh
-- Komi Republic (2 licenses; Baberssky & Ordynsky) -
Operated by BVN Oil & RK Oil respectively
I) Petrosach
I.i) Overview(1)
Petrosakh was founded in 1991 as a Russian-U.S. joint venture to
develop the Okruzhnoye field on the Eastern coast of Sakhalin
Island. In 1993 and subsequently in 1997, Petrosakh was licensed to
produce oil from the Okruzhnoye field for a period of 20 years. The
Company acquired full control of Alfa Group's ownership interest in
Petrosakh on 19 November 2004. In 2012, the Company secured an
extension of the licence until 2037. In June 2016 Petrosakh was
awarded a 25-year exploration and development license for the South
Dagi oil field on Sakhalin Island. Urals holds 97.16% of Petrosackh
and the balance is held by the administration of Sakhalin
Island.
Twenty-five producing wells have been drilled to date in
Petrosakh area of operations, split as follows:
-- 3 gas lift
-- 4 natural flow
-- 18 artificial lift
I-ii) Okruzhnoye
Okruzhnoye field structure is a "tight" asymmetric anticline
trending NNW sub-parallel to the coast, bounded and segmented by
steep faults. The field at its maximum extent is approximately 7Km
long 1.5 Km wide with a vertical closure of about 700m.
There are two main reservoirs in Okruzhnoye; 'Borsky' and the
'Pileng'. The Pileng is Stacked Palaeogene and it contains the
majority of the reserves. The Borsky is a Miocene reservoir. Maps
indicate long hydrocarbon columns present in the Pileng and Borsky
reservoir zones. The Pileng is a highly fractured siliceous clay
composed of authigenic silica in a globular form in a
(montmorillonite - illite) clay matrix that also contains
pyroclastics and subordinate terrigenous feldspar and quartz. The
abundant silica is believed to be derived from diatoms and sponge
spicules and exhibits micro-porosity. Overall this reservoir
interval exhibits fair porosity (11-17%) and relies to a large
extent on fracturing at all scales for permeability. Similarly, the
Borsky (four reservoir zones with intervening shale seal) is a very
low matrix permeability (2-3 mD), siliceous and argillaceous, silty
shale but naturally fractured. The dual matrix/ fracture poro-perm
system creates difficulties for production in that the main storage
lies within moderate porosity but low permeability matrix whereas
the fracture system is high permeability but with little porosity
and storage capacity.
In total, there are 5 commercially productive horizons, Pileng
IV, Borsky IV, IIIa, III, and II. These occur at depths of between
1200m and 1810m below surface. The reservoirs contain good quality
light oil with 36.5 - 37.5degAPI low paraffin (1.08%) and sulphur
(0.24%). Crude sold with US$2-3/bbl premium to Dubai benchmark.
Since, productivity from both reservoir intervals is related to the
density of open fractures, water breakthrough may be problematic
and may affect sweep efficiency and economic recovery. Production
has shown no/very weak aquifer support during depletion, hence,
optimisation of water-flooding and placement of wells to minimise
draw down during production is critical in maximizing recovery.
I-iii) South Dagi
The South Dagi Field is located in the north-eastern part of
Sakhalin, in a hilly area (elevation 25-776m abmsl) onshore
Sakhalin Island at the southern end of the Sakhalin Ridge and lies
within the Nogliki region 4 km SW of eastern Dagi and 6 km west of
Mongi (largest onshore deposit in North Sakhalin). The field was
discovered in 1977/78. Petrosakh was awarded a 25year exploration
and development licence for South Dagi oilfield in June 2016.
Urals(2) has spudded its first well, a planned exploration well,
at the South Dagi field on Sakhalin Island. The well's target pay
horizons are the Okobycay horizon and the Daginsky neogenic
horizon, with the target depth being 2,200 meters. It is
anticipated that this depth will be reached in the second quarter
of 2018. The company intends for this well to be the first well in
a programme of three exploration wells at South Dagi over 2018 and
2019, which are to be drilled by Urals Energy's own team using the
rig that was recently acquired from Jereh Group. Any oil production
from South Dagi can be transported by road tanker to the Company's
refinery at Petrosakh, a distance of 400 kms, which would increase
the utilisation rate of the Company's refinery. The refinery will
not need additional investment to process both the heavy and light
oils expected from South Dagi. In addition to the drilling
programme mentioned above, the company plans to workover two wells
in order to reach the target capacity.
The South Dagi field has been mapped from 3D data and covers an
area of approximately 29Km(2) . The 3D data quality appears good to
fair. Blackwatch did not have data cube and grids, hence could not
verify the interpretation. Similarly, we did not verify depth
mapping and have not reviewed velocity/depth relationship. However,
the interpretation appears reasonable based on the review that we
carried out. Micro-seismic has also been acquired showing possible
upside potential to the east of the currently defined development
area.
The South Dagi field is structurally complex (part of a Cenozoic
accretionary wedge). The field structure is a NNE trending
(transpressive) anticline that is strongly segmented by normal
NNE-SSW trending oblique -slip faults. Blackwatch found the
interpretation on selected illustrative seismic lines satisfactory
but has not accessed the 3D data cube to carry out an in-depth
assessment of the geophysical interpretation. Similarly, we cannot
verify depth mapping and have not reviewed the velocity / depth
relationship. However, the structural interpretation appears
reasonable though structural complexity and compartmentalisation of
the productive horizons may be greater than currently shown.
Consequently, drainage volumes may be smaller than currently
envisaged and require a high number of wells to maximize
recovery.
Gas-oil (GOC) and oil-water (OWC) contacts are constrained by
drilling though there remains significant uncertainty in the
maximum hydrocarbon column height of some productive intervals
(since there are few penetrations of OWC's and numerous
penetrations record oil-down-to (ODT)). Hydrocarbon columns in some
fault panels have not yet been proved by drilling. The maps show
reasonable estimates of the degree of hydrocarbon fill based on the
data available. Possible variations in column heights were taken
into account within the range of gross rock volumes (GRV)
estimated.
The reservoir comprises thin, stacked Neogene (Middle Miocene-
Pliocene) sandstones (12 zones identified as hydrocarbon - bearing)
of continental to shallow marine (transgressive) origin. The
principal zones lie within the Okobykajskim and Daginskaja and are
composed of a frameworks of quartz, feldspar and chert, with
cements of chlorite, kaolinite, carbonate, and quartz with variable
proportion of montmorillonite clay matrix. It is unclear whether
the complex faulting is entirely post- depositional or if reservoir
thickness changes significantly across some faults, i.e there was
syn-depositional structural control. For volumetric estimates
Blackwatch used the penetrated thicknesses in wells as the primary
reference and assumed a range of low-medium and high thicknesses
constant within each fault panel evaluated in order to derive GRV.
Seismic resolution does not appear to be sufficient to map directly
top and base of the individual pay sections though as stated above
Blackwatch did not load or re-interpret the 3D data cube which was
beyond the scope of this review. Porosity is typically good (circa
20%) and permeability variable from fair to excellent (up to
darcies).
No direct hydrocarbon indicators have been observed / mapped.
However, given the good sandstone porosities proved by drilling
together with the likely velocity and density contrasts with
interbedded shales and modest burial depth (1000-2020m below
surface), Blackwatch would expect some direct hydrocarbon
indications in the seismic data. It was not clear whether AVO and
fluid substitution modelling has been attempted but potentially
they might provide useful input to reduce risk and better define
the distribution of trapped hydrocarbons.
Blackwatch loaded selected seismic data (2D lines and 3D images)
together with geo-rectified maps to Kingdom workstation in order to
make independent volumetric assessment. Our review has shown that
previous mapping and input parameters are acceptable. The data
shows that there is significant variability in physical
characteristics of 36.5-37.5degAPI oil trapped in the field, (high
viscosity in the shallow upper zones and low viscosity in deeper
levels. The oil is sweet low in sulphur (0.24%) and paraffin but
high in resins (in common with other North Sakhalin oils). Both
saturated (with gas caps) and under-saturated oils are reported.
Some shallow gas caps are probably methane generated from
biodegradation of the underlying oil. It is also reported that
there is no aquifer support and Gas is re-injected and / or
flared.
Regionally source rocks are known in Miocene and Oligocene
shales containing type II and type III organic matter with a total
organic content (TOC of <1% to 5%), whilst some authors
attribute resources in North Sakhalin to deep marine oozes of Lower
Miocene - Oligocene. Present geothermal gradients across the North
Sakhalin Basin range from approximately 24deg to 50deg C/km
(1.3deg-2.7deg F/100 ft), and heat flow is irregular along the
major fault zones. The oil and gas window therefore falls within a
range of 2.5km to 4 km and peak generation, maturation and
migration was likely in Late Miocene to Pliocene time. Migration
paths to South Dagi were probably short lateral distances with
significant vertical distances along faults, particularly along the
major regional shears. Pleistocene leakage along these faults, has
resulted in the traps being under-filled relative to their spill
points. The shaly Upper Miocene - Pliocene provides good top seal
regionally whereas interbedded shales within the objective
intervals also provide local seal. Shale smear on oblique slip
faults is also likely to compartmentalize the structure. Structural
and stratigraphic complexity (stacked reservoirs) together with
large variations in oil, gas and condensate mobility suggest a
detailed integrated G&G (geophysical, Geological),
petrophysical and engineering study is required to revise field
description and refine volumetric estimates of resources.
Information from the proposed drilling programme will also yield
crucial information.
II) Articneft - Peschanoozerskoye
Arcticneft is a Russian closed joint stock company incorporated
in 1998 in order to develop the the eastern and western parts of
the Peschanoozerskoe field which is located onshore Kolguyev Island
in the Kolguyev Terrace in the East Barents Basin. Urals acquired
100% of Arcticneft in July 2005. The E&P License is valid till
the end of December 2067 and in October 2015 the Company expanded
the boundaries of the license area and increased the reserves base.
The Central part of the Peschanoozerskoe is operated by Arctic Oil
Company Limited (ANK) which has an R&D license for the
development of the central part of the oil field. In 2016 this
central part of Peschanoozerskoye was acquired by Urals by purchase
of ANK.
The field area is covered by high resolution 3D data in the
central area with a good grid of 2D data covering remaining parts.
Blackwatch found that the structure mapping was reasonably robust
but did not investigate the time to depth conversion that is
adequately constrained by well tops. A large number of maps
(structure isopach and net pay) were loaded and geo-rectified on
Kingdom workstation in order to estimate the Gross Rock Volume
(GRV). A range of tabulated input values were used for
probabilistic determination using crystal ball. As a result,
Blackwatch was able to replicate Ural's in-house estimates which
are a significant uplift on Miller and Lents 2014 assessment. The
deeper "reefal" play and associated anomalies is not well defined
but provides significant upside resource potential. Further G&G
studies are recommended and required to identify optimal drilling
locations to test this play.
The oil was probably sourced from mature Lower to Middle
Triassic mudstone in the deeper part of the South Barents Basin
north of the area of interest. Petroleum generated from Triassic
mudstone is interpreted to have migrated up-dip to the field. The
oil is a high quality light (46.7degAPI), low sulphur (0.075%), low
paraffin crude that sells at a premium of $1 to 1.8/ bbls to
Brent.
The primary objective reservoir interval comprises stacked Lower
Triassic parallic - fluvial continental and shallow regressive)
marine sandstones with secondary (as yet under-explored) potential
in Permo- Carboniferous and Devonian reefal build-ups. The Triassic
sandstones (Charkabozh formation) are lithic-rich, but still with
fair to good porosity ranging from 13-24%, and permeability ranging
from tenths to nearly 200 millidarcies. However pay zones are thin
with net pay ranging from 3-12 m. The sedimentary architecture of
the reservoir was not reviewed in detail for this report but is
probably complex, and in combination with thin zones is likely to
result in low overall recovery. However correlation of e-logs shows
good lateral continuity of sand intervals cross the field area.
The oil is trapped in low amplitude anticlines but a combination
of stratigraphic pinch-out and structure provides effective
trapping. The area contains abundant and excellent Mesozoic shale
seals
The Peschanoozerskoye has flexible facilities and
infrastructure. The Oil treatment facility has a capacity of 2,205
bopd, export crude oil storage capacity of 555,000 bbl and oil
product storage capacity of 50,000 bbl (including oil storage
capacity of newly acquired assets). Existing storage facilities
allow accumulation of production year-round. There are two sea
loading points which provide 100% export capability. They are
located directly off the coast and adjacent to the field's crude
oil tank farm which allows Oil tankers up to 50,000 ton deadweight.
The field also has an oil refining unit with c.440 bopd capacity
and produces diesel, fuel oil and straight run gasoline mostly for
own needs and local sales points.
The company owns Well Work Service Units of type APRS 40 with
rated capacity up to 40 tonnes and type UPA 60/80 with rated
capacity up to 80 tonnes in addition to a Russian-made drilling rig
(type Uralmash-3D-76). This drilling rig can handle a maximum depth
of 5,000 m and thus provides options for exploration and production
well drilling. The rig capacity is up to 260 tonnes and its located
on the field. The company also owns a Reservoir Pressure
Maintenance System which utilises water from an aquifer system of
Middle Triassic deposits containing high-pressure waters. water
wells are drilled to a depth of 1,300-1,400 m and are equipped with
submersible pumps.
In 2016 there were a total of 26 producing wells with a
production capacity of approximately 1400 bopd. Most wells are
assisted by artificial lift. A programme of well intervention and
installation of pumps is planned to maintain production.
III) BVN Oil - Babaevsky
BVN oil LLC incorporated in 2013 in order to develop the
Babaevsky license area is located within well-known the
Velhiu-Tebukskogo petroleum district Timan-Pechora oil and gas
province. Urals Energy acquired 100% of BVN oil in November 2015.
BVN holds two licences; one for exploration (including outside the
currently defined field) the other for exploitation. The
concessions are conveniently located with respect to export routes
to refineries and Europe.
There is no current production but an exploration well drilled
in 2013 flowed oil at 130bopd. Previous drilling indicates an
approximately 50m gross oil column (1815-1865 OWC) but there is
significant uncertainty in the data. Offset fields believed to host
oil in comparable reservoirs produce 15-20tons /day. Urals are
confident this could be increased to 40-60tons/day after fracture
stimulation. The permeability of the formation is not known at
present or whether the matrix is naturally fractured. Primary
objective is the terrigenous Upper Devonian (Yaranskii (layer Iv),
Jier (layers 1a, 1av) and Timan (layer A2). However, there may be
additional oil-bearing zones above the Domanic or even within it.
The proposed work programme includes 30 Km(2) of 3D seismic data
acquisition and interpretation and four exploratory wells with a
design depth of 2,080 m, to horizon - D3jar (Jherei). The 2017 work
programme included seismic re-interpretation to evaluate possible
license area extensions.
Available seismic data is of fair quality and was seen to
confirm a structure is present. However Blackwatch did not carry
out an independent interpretation and did not evaluate time to
depth conversion. There is clearly significant uncertainty in the
trap size and faulting. This uncertainty will be reduced with the
exploration programme proposed by Urals Energy.
Blackwatch loaded 2D seismic data and images of the depth
closures (which were georectified) to Kingdom workstation in order
to estimate volumes. We also accessed reports detailing the input
parameters (porosity, saturation, formation volume factor) for
input into crystal ball(3) . As noted by Urals, the geological data
available in this area is very limited and therefore these
parameters have been compiled mainly from nearby analogue
accumulations. There is also very significant uncertainty in the
recovery factor that may be achieved. There is clearly a working
petroleum system in the licensed area and the possibility of
significant upside potential.
IV) RK-Oil - Ordymsky
RK oil LLC incorporated in 2014 in order to develop the Ordymsky
license area which is located within the well-known the
Omra-Soyvinskomu petroleum district Timan-Pechora oil and gas
province. Ordymskiy is a large licensed area (444.7Km2), with good
road accessibility and a rail link only 3Km to the North. A variety
of export routes to refineries and the European market are
potentially available. Urals Energy acquired RK oil (100%) the
Licence holder in 2014. The concession is valid to 2040 with the
initial assessment of 3C resources stated as 162.4 million tons
STOIIP, 35.9million tons (266 million bbls) recoverable. Various
seismic surveys were acquired between 1975 and 1995 (giving a
seismic coverage of approximately 0.94 line km per km2). A detailed
electromagnetic survey conducted in 2000. This supported leads
identified by the seismic data and RK went ahead and drilled a well
South Ordymsojvinskoj. Blackwatch loaded the 2D data into Kingdom
workstation and found it good quality with indications of flat
spots and DHIs. However, the fault pattern is less clear.
Blackwatch did not carry out any independent geophysical
interpretation and cannot comment on the time to depth conversion
used by RK to generate maps. In total 34 wells have been drilled in
the concession area.
South Ordymsojvinskoj-1 was drilled in 2001 to a TD of 750 m and
penetrated Tournaisian carbonates that flowed oil at a rate of
0.79m3 /day with a flowing pressure of 60-70 atms. This oil was a
sweet light (0.897 sg) crude. Formation temperature is not known.
In 2015 seismic was re-processed to further evaluate the deep
potential around South Omrinskaja and Ordymskaja. In total 4
interesting structures have been identified with stratigraphic
potential recognized in both reefal build-up and reef flank plays.
Build-ups are interpreted to have up to 400m vertical relief and
extend up to 15Km with areal closure around 40 sq km in the maximum
case.
A well was spudded in April 2017 but Urals terminated operations
due to unsatisfactory performance by the contractor. Present status
is not known.
Reports show that the pay zones are thin. Prospective resource
base for Ordymskiy is recognized in Tournaisian (Carboniferous),
Fammenian and Frasnian (Upper Devonian) and Eifelian (Middle
Devonian). The projected reservoir zones are prognosed in:
-- 1t
-- D3fm
-- D3dzr, 1- and 1-b ( D3f1)
-- D3jar, 1-v (B-2 bundle + B-3)
-- D2ef. Stratum III
Blackwatch inspected and measured the mapped structures provided
by Urals. Using the available seismic data, which is of fair to
good quality, a reasonable range of minimum and maximum GRVs
(P10-P90) was used to estimate a range of possible outcomes.
Based on reports provided input parameters were found
satisfactory and were adopted to estimate a reasonable range of
input parameters. Blackwatch has not carried out independent
petrophysical analysis but consider that porosity is well
constrained by core information but that there is significant
uncertainty in estimation of N/G ratio, hydrocarbon saturation, FVF
and especially projected recovery factors.
Blackwatch attempted to capture this uncertainty within the
P10-P90 range of input parameters. A further uncertainty is the
physical character of the hydrocarbons with low gravity and high
viscosity possible at shallow levels. In-depth geophysical and
geological studies are recommended to further refine drilling
locations and resource potential.
V) Blackwatch Findings
We have undertaken a review/audit of the data provided and the
technical work carried out by Urals, its advisors and third party
consultants and we have carried out independent estimates of
reserves, and prospective resources as summarised in Tables
ES-1.
Table ES-1 Blackwatch Reserves and Resources Estimates for Urals
Assets
Original Recoverable Cumulative Gross Remaining Urals Net Operator
Reserves Prior Production Reserves Interest attributable
to Production as of as of 31/12/2017 in Remaining
(MMSTB) 31/12/2018 the Reserves
(MMSTB) Licence as of 31/12/2017
Proved
Proved +Probable
Proved +Probable +Possible
(1P) (2P) (3P) 1P 2P 3P 1P 2P 3P
------------------- ------- ----------- ----- ----- ------ --------- ------ ------ ------ ----------
Okruzhnoye
Total 24.5 40.6 67.4 23.76 0.8 16.9 43.7 97.16% 0.73 16.37 42.41 Petrosakh
------- ---------- ----------- ----------- ----- ----- ------ --------- ------ ------ ------ ----------
South Dagi
Total 2.9 20.9 38.3 0.00 2.9 20.9 38.3 97.16% 2.82 20.32 37.25 Petrosakh
------- ---------- ----------- ----------- ----- ----- ------ --------- ------ ------ ------ ----------
Okruzhnoye
& South
Dagi Combined 27.4 61.5 105.8 23.76 3.7 37.8 82.0 97.16% 3.55 36.69 79.66 Petrosakh
------- ---------- ----------- ----------- ----- ----- ------ --------- ------ ------ ------ ----------
Babaevskiy BVN
Total 1.0 10.8 13.7 0.00 1.0 10.8 13.7 100% 1.00 10.80 13.66 Oil
------- ---------- ----------- ----------- ----- ----- ------ --------- ------ ------ ------ ----------
Peschanoozerskoye Articneft
Total 58.7 76.8 96.3 17.85 40.8 59.0 78.4 100% 40.84 58.97 78.43 + ANK
------- ---------- ----------- ----------- ----- ----- ------ --------- ------ ------ ------ ----------
Gross Prospective Urals Net Attributable Risk Operator
Resources (MMSTB) Interest Prospective Resources Factor
as of 31/12/2017 in the (MMSTB) as of
Licence 31/12/2017
Low Best High % Low Best High %
Estimate Estimate Estimate Estimate Estimate Estimate
(P90) (P50) (P10)
---------- ---------- ---------- ---------- ---------- ---------- --------
Ordymsky
Total 124.7 178.0 256.4 100% 124.7 178.0 256.4 25% RK Oil
---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- ---------
Part-2) Professional Qualifications
Blackwatch Petroleum Services Ltd (Blackwatch) is an independent
provider of geological, petroleum engineering, well testing and
drilling engineering services to the international petroleum
industry. Blackwatch specialises in the modelling, estimation,
assessment and evaluation of oil and gas assets. Blackwatch was
established in 1994 with offices in central London and Aberdeen and
a multi-national / multi-disciplined staff base. As such,
Blackwatch has acquired experience in most of the hydrocarbon
producing provinces of the world. Blackwatch has performed work for
a wide variety of clients, ranging from multi-national and state
oil companies, small independents, investment banks, financial
institutions, stock markets and governments. Blackwatch's client
base includes ADCO, BP, Shell, ConocoPhillips, Exxon Mobil,
ChevronTexaco, ENI, JNOC (renamed JOGMEC), GDF, Marathon, Merrill
Lynch, EBRD, Norsk Hydro, Cairn Energy, CNR, Victoria Oil and Gas
and many others.
Except for the provision of professional services on a fee
basis, Blackwatch does not have any interest in or commercial
arrangement with any persons employed by or acting for Urals.
This report has been prepared under the supervision of Radwan
Hadi, and David Craik. Mr Hadi is a BSc graduate and was awarded an
MSc in Chemical Engineering from the University of Bradford in
1979. He is Deputy Managing Director of Blackwatch and has over
thirty-five years of experience in the international oil industry
in the estimation, assessment, evaluation, exploration, development
and management of hydrocarbon reserves and resources. Mr Craik is a
BSC Geology Graduate from the University of Liverpool and was
awarded an MSc in Sedimentology from the University of Reading in
1976. He is a Fellow of the Geological Society and a Member of the
Petroleum Exploration Society of Great Britain (PESGB). He is an
experienced petroleum explorer with over thirty-five years of
experience in the international oil industry in the estimation,
assessment and evaluation of hydrocarbon reserves working on
assignments with oil majors such as BG, BP, Repsol and Sun as well
as independent operators. Since 1996, he has worked as an
independent geological consultant providing services to a wide
range of upstream clients including Private Equity backed E & P
start-ups and multi-national corporations in the UKCS and
internationally. Blackwatch declares that to the best of its
knowledge and belief, having taken all reasonable care to ensure
that such is the case, the information contained herein is in
accordance with the facts and does not omit anything likely to
affect the import of such information.
Yours faithfully,
Radwan Hadi
Deputy Managing Director
Blackwatch Petroleum Services Limited
(1) Source: Urals Energy Website
http://www.uralsenergy.com/content/Petrosakh/Petrosakh.asp
(2) Source: Urals Energy Website
http://www.uralsenergy.com/content/Petrosakh/Petrosakh.asp
(3) Crystalball is a spreadsheet-based software suite for
predictive modeling, forecasting, simulation and optimization. It's
used by Blackwatch to carry out probabilistic hydrocarbon
volumetric calculation.
https://www.emerald-associates.com/software/oracle/oracle-crystal-ball/crystal-ball.html
For further information, please contact:
Urals Energy Public Company Limited
Andrew Shrager, Chairman Tel: +7 495 795 0300
Leonid Dyachenko, Chief Executive
Officer
Sergey Uzornikov, Chief Financial www.uralsenergy.com
Officer
Allenby Capital Limited
Nominated Adviser and Broker
Nick Naylor / Alex Brearley Tel: +44 (0) 20 3328
5656
www.allenbycapital.com
Appendix
Glossary of Technical Terms
Reserves Categories:
(Source:
http://www.spe.org/industry/docs/Petroleum_Resources_Management_System_2007.pdf
- pages 28 & 29)
Proved reserves are those quantities of petroleum, which by
analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be commercially recoverable, from a given
date forward, from known reservoirs and under defined economic
conditions, operating methods, and government regulations.
Probable reserves are those additional Reserves which analysis
of geoscience and engineering data indicate are less likely to be
recovered than Proved Reserves but more certain to be recovered
than Possible Reserves.
Possible reserves are those additional reserves which analysis
of geoscience and engineering data indicate are less likely to be
recoverable than Probable Reserves.
1P - Taken to be equivalent to Proved Reserves; denotes low
estimate scenario of Reserves.
2P - Taken to be equivalent to the sum of Proved plus Probable
Reserves; denotes best estimate scenario of Reserves.
3P - Taken to be equivalent to the sum of Proved plus Probable
plus Possible Reserves; denotes high estimate scenario of
reserves.
Prospective Resources Categorization
Source:
http://www.spe.org/industry/docs/Petroleum_Resources_Management_System_2007.pdf
- pages 31, 39 & 37
Low (P90) resource: With respect to resource categorization,
this is considered to be a conservative estimate of the quantity
that will actually be recovered from the accumulation by a project.
If probabilistic methods are used, there should be at least a 90%
probability (P90) that the quantities actually recovered will equal
or exceed the low estimate.
Best (P50) resource: With respect to resource categorization,
this is considered to be the best estimate of the quantity that
will actually be recovered from the accumulation by the project. It
is the most realistic assessment of recoverable quantities if only
a single result were reported. If probabilistic methods are used,
there should be at least a 50% probability (P50) that the
quantities actually recovered will equal or exceed the best
estimate.
High (P10) resource: With respect to resource categorization,
this is considered to be an optimistic estimate of the quantity
that will actually be recovered from an accumulation by a project.
If probabilistic methods are used, there should be at least a 10%
probability (P10) that the quantities actually recovered will equal
or exceed the high estimate.
Prospective Resources - those quantities of petroleum which are
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations.
Remaining Reserves and Resources - those quantities of petroleum
(of any category) which are estimated, as of a given date, to be
recoverable after deducting actual petroleum quantities that are
already produced.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFKKDDKBKBOPD
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May 11, 2018 02:00 ET (06:00 GMT)
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