Prospectus re Admission to the Official List - Heritage Oil

RPS EnergyHeritage Oil – Competent Persons Report4.1. Data AvailableData from the surrounding fields was sparse because competitor data is proprietary. A variety of data wasavailable for this review. Seismic data coverage (2006 survey and the older data) comprising 2D lines shotat fairly wide spacing. A number of Russian drilled wells with Russian style wireline logs limited to SP,Conductivity and the Russian BKZ gradient (lateral) logs with 2.25 electrode spacing. Two new wells havebeen drilled in 2007 (P3 and P2) and a third (P4) was finishing drilling when this report was beingprepared. New wells drilled in 2007 by Heritage have modern western-style logs.DST data from new wells, summaries of reservoir simulation studies and production data from Wells 226and P3 were provided.4.2. Geology4.2.1. Regional SettingThe Upper Jurassic sequence in the Zapadno Chumpasskoye Licence is understood to comprise asequence of shallow marine clastics, which are widely deposited in the West Siberian Basin. The UpperJurassic is some 60 to 70 meters thick and includes a lower section of claystones and upper sand sequenceinterbedded with siltstones and claystones. The Upper Jurassic in the area is overlain by the BazhenovFormation, a 20 to 25 metre thick bituminous shale which is both the source and the cap rock forthe reservoir.The six fields surrounding Zapadno Chumpasskoye are also reported to be producing from theUpper Jurassic.4.2.2. Zapadno Chumpasskoye FieldThe data from Russian drilled wells available for evaluating net sand, net pay and fluid contact is limited toSP, Conductivity and the Russian BKZ gradient (lateral) logs with 2.25 electrode spacing. These are lowresolution tools and the resistivity logs are unfocused. There are no porosity logs. The SP logs werenormalised to enable a consistent comparison of sand quality between wells. Net sand was initially pickedat a typical VCL cut-off 50 per cent. However, to compensate for the low resolution of the SP and thepresence of thin beds, a higher VCL cut-off was accepted for the thinner layers (i.e. thickness less than5m). The Russian lateral logs were reviewed for evidence of hydrocarbons in the wells and to determinethe fluid contacts. The log response is asymmetrical and only a qualitative interpretation was possible. Theshallower hydrocarbon bearing sands were found to indicate resistivities approaching and exceeding40 Ohmm, whereas the deeper formation closer to the hydrocarbon-water contact tended towards15 Ohmm. The resistivity measurements in some of the thinner sands were uncertain due to poorlog resolution.New wells drilled in 2007 by Heritage have modern western-style logs.Prior to the new wells, Heritage presented a correlation of the upper part of an Upper Jurassic clasticsequence based on lithostratigraphy (no biostratigraphic data is available). Two sandstone intervals (theUpper and Lower J 1 Sandstones) were identified in the upper part of the sequence and correlated betweenmost of the wells using the SP logs. These occur below the base of the ‘low conductivity zone’, equating tothe Bazhenov shale which is the seal and source rock for the Jurassic reservoirs. The correlation has beenrevised based on data from the 2007 wells and additional older well data that has become availableto Heritage.The revised interpretation suggests that the Upper J 1 Sand is very localised and no volumes are nowassigned to this sand. Well spacing is large in this licence (between 2 and 7 km) and lateral variations insand content and quality, plus sand pinch-outs and amalgamations are likely to occur within such distances.The model of pinch-out of the Upper Sand on to the high in the south is a reasonable interpretation of thelogs and is supported by evidence from well P2.Seismic data quality in this licence is of moderate quality; however the frequency content of the data atreservoir level is insufficient to define the reservoir thickness. Effectively the only presently perceived usefor these data is to define the structure at the top of the reservoir sequence which is seen to be a simplenorth-westerly dipping surface.Heritage provided depth structure maps at Top Upper Sand levels. Seismic data have been reviewed;seismic survey data coverage comprises 2D lines shot at fairly wide spacing. No faults are shown on the94