Athabasca Viking/Grand Rapids/Nisku Technical ... - Oil Reserve Inc.

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Geological risk factors A total of six criteria are considered in determining the overall geological risk. source rock – is there thermally mature hydrocarbon source rock present in adequate thickness, extent, and organic richness, charge – is the source rock capable of generating hydrocarbon, migration – are there sufficient migration pathways such as faults, fractures, and carrier beds to the reservoir, reservoir rock – does the reservoir have favorable parameters such as thickness, pore space, and the ability to allow fluid flow, trap / closure – does closure of the reservoir exist in terms of adequate areal extent and vertical relief, seal / containment – are there effective sealing rocks present to ensure that containment has occurred. Source rock, charge, migration, trap and seal are of low risk due to the indication of hydrocarbon on well logs, and bitumen recovered on drill stem tests. For the Viking and Grand Rapids Formations, the reservoir rock is also relatively low risk due to the good well control demonstrating a relatively homogeneous reservoirs, availability of core, indication of oil in drill stem test and oil saturations in core. The largest risk is related to the oil saturation and the degree of biodegradation of the oil. There is a large degree of uncertainty as to whether this resource could be successfully produced in if so, whether the rates would be sustainable given the viscosity and apparent water saturation and whether production would be economically feasible. For the Nisku Formation, the main geological risk revolves around the reservoir rock. Many areas have sparse well control and even among control wells, potential is not seen in every one. Within the reservoir, facies and lithological changes can be abrupt. As is the case with the majority of carbonate oil reservoirs in the Western Canadian Sedimentary Basin, the Nisku Formation at Athabasca is heterogeneous. Porosity, contiguous net pay thicknesses and hydrocarbon saturation are variable and permeability is irregular. The ASC 2010 Oil and Gas Review states that due to the degree of heterogeneity typically found in carbonate heavy oil reservoirs, estimating recoverable resources beyond control wells requires “substantial supporting technical evidence”. In this case, we do not have production on or offsetting company land or an appropriate analogue; Therefore recoverability cannot be proven or estimated at this time. © Deloitte & Touche LLP and affiliated entities.
Technical assessment Probabilistic analysis AJM Deloitte has used data provided by ORI and from the public domain to assess the Nisku, Viking and Grand Rapids potential on and around company land holdings. AJM Deloitte considered wells on and adjacent to these lands, and additional wells required in the assessment of geological elements on company lands. 635 wells were reviewed for the Viking and Grand Rapids assessments, and 202 wells were reviewed for the Nisku assessment. This is in addition to the wells reviewed in the potential analogue areas. The well log review consisted of an analysis of the porosity (density and neutron porosity or sonic) and resistivity (induction or electric well logs) for all wells with log control of each respective zone. Cutoffs have been applied to the gamma ray, porosity, and hydrocarbon saturation calculation from log parameters and averages for each parameter was recorded. Low and high case mapping has been created based on wells penetrating a sufficient thickness of each formation. Seismic data was not available for this assessment. The Viking and Grand Rapids Structural X-Sections characterize the respective intervals in the Nixon area. Cutoffs have been applied to the gamma ray, porosity, and hydrocarbon saturation calculation from log parameters and averages for each parameter was recorded. Seismic data was not available for this assessment. Ninety five percent of wells in the mapped area penetrate the Viking and 88 percent penetrate the Grand Rapids. The Nisku Type Log and corresponding Nisku Core Plot for 102/07-27-072-18W4 characterize the Nisku interval in the Nixon area. This well has comparatively higher resistivity, thicker net pay and comparatively lower porosity than the average for each parameter on company lands. Area Viking ORI owns a 100 percent working interest in 397,440 acres of land in the Athabasca area, according to the company. For the Viking Formation, most of this area exists beyond the thick channel; the company owns approximately 66,700 acres of land over the Viking channel, based on high case mapping. The ranges of area have been derived from the low and high case mapping of geological parameters for each interval. PIIP area distributions for the Viking include a reasonable range of area considering the lower © Deloitte & Touche LLP and affiliated entities.
Page 1 and 2: Oil Reserve Inc. Resource study Vik
Page 3 and 4: Oil Reserve Inc. Viking, Grand Rapi
Page 5 and 6: Independent petroleum consultants c
Page 7 and 8: Certificate of qualification I, D.
Page 10 and 11: Evaluation procedure Definitions an
Page 12 and 13: 3 Procedure AJM Deloitte has prepar
Page 14 and 15: 5 Resource and reserve definitions
Page 16 and 17: 7 Best Estimate: This is considered
Page 18 and 19: 9 Reserves are estimated remaining
Page 20 and 21: 11 Resource and reserve estimation
Page 22 and 23: 13 In preparing a resource estimate
Page 24 and 25: 15 Royalties and taxes General All
Page 26 and 27: 17 In reserve evaluations conducted
Page 28 and 29: AJM Deloitte Canadian Domestic Pric
Page 30 and 31: Property index 1. Athabasca, Albert
Page 32 and 33: Viking, Grand Rapids, and Nisku For
Page 34 and 35: complex and unproven recovery schem
Page 36 and 37: Geology Viking The Lower Cretaceous
Page 38 and 39: eflects the net pay assuming gas ov
Page 40 and 41: eservoir properties (reservoir anal
Page 44 and 45: density well spacing from Section 0
Page 46 and 47: from 122 to 140 meters subsea. The
Page 48 and 49: Nisku The oil shrinkage is assumed
Page 50 and 51: Development risk factors The geolog
Page 52 and 53: Company Evaluated: Appraisal For: P
Page 54 and 55: Company Evaluated: Oil Reserve Inc.
Page 56 and 57: Company Evaluated: Oil Reserve Inc
Page 58 and 59: T77 T76 T75 T74 T73 T72 T71 Legend
Page 62 and 63: 360.0 370.0 Legend Grand Rapids Pen
Page 66 and 67: Depth Depth Porosity Porosity 0.4 0
Page 68 and 69: A 100/07-23-072-20W4/00 Husky Oil O

Athabasca Viking/Grand Rapids/Nisku Technical ... - Oil Reserve Inc.

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