THEME IX: The New Oil Business
AAPG FORUM: Independent Producers Re-Exploring Mature Fields
Building a European
Independent
V. J. Hamilton
Oil field in Schodnica - 1909
THE CASE FOR EUROPE
6 Europe offer good prospects for oil and gas exploration
6 22.3 billion bbls of oil and 8.7 trillion cm of natural gas in 11 selected
provinces of Europe according to estimates by the United States
Geological Survey (2000)
6 Europe has not yet been thoroughly explored
ƒ In the USA there are 15.7 square kilometers per exploration well
(1 well in 6 square miles)
ƒ Compared with Europe where there are 151.2 square kilometers
per exploration well (1 well in 58 square miles)
ƒ In Spain for example there are 684 square kilometers per
exploration well (1 well in 264 square miles)
THE CASE FOR EUROPE
Tethys Oil
locations in
Europe
Square kilometer / Well
THE CASE FOR EUROPE
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1000
800
600
400
200
0
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Sq km
Square kilometer / Well
for 10 European countries and the US
Country
INVESTMENT ATTRACTIONS
6 Low political risk
6 Zero currency risk
6 Under explored compared with North America
6 Low level of competition
6 Extensive existing infrastructure
6 Recently de-regulated gas markets
TECHNOLOGICAL DEVELOPMENT
6 Advances in geophysics
ƒ Exponential increase in computer processing capacity
ƒ New seismic data processing programs
ƒ 3D-seismic increases data density which improves drilling
accuracy
6 Advances in drilling technology
ƒ Horizontal well drilling recovers more oil at a faster rate
ƒ Under-balanced drilling improves production rates
EUROPEAN NATURAL GAS MARKET - NETWORK
1970
2002
EUROPEAN NATURAL GAS MARKET - OVERVIEW
6 Natural gas constitutes 24
percent of energy demand in
Western Europe (2002)
European natural gas demand & supply
6 Demand for natural gas in
Europe is expected to rise from
482 bcm in 2000 to 901 bcm in
2020 according to Eurogas
Undefined
supply
6 European production totalled
310 bcm in 2002
6 Increase in demand from power 2002
generation due to lower cost
and environmental issues
2010
2020
European demand
European production
Import + European production
TETHYS OIL - LICENSE EVALUATION PROCESS
Study of existing geological and geophysical data
Analysis of local infrastructure
Analysis of fiscal terms and commercial terms
and conditions of the proposed license
Negotiation or auction
DEAL MAKING OPTIONS
6 Licensing Rounds
(0)
6 Farmins
(3)
6 Corporate acquisitions
(2)
6 Directly from governments
(4)
6 Asset exchanges
(1)
TETHYS OIL LOCATIONS
© 2000 C.R. Scotese PALEOMAP Project
TETHYS OIL - 2001- 2006
6 2001 - Tethys Oil founded as a Swedish company
6 2002 - Denmark – 1st exploration license award (1/02 in Zealand)
6 2003 - Spain – Interests in 1 production license (La Lora) and 2 exploration
licenses (Valderredible and Huermeces)
- Turkey – Interests in 3 exploration licenses (Hoto and Ispandika)
- Denmark – Interests in 1 exploration license (1/03 in Jutland)
6 2004 - Spain – Interests in 1 exploration license (Basconcillos-H)
- Tethys Oil IPO
- Denmark – Drilling phase approval
- Turkey – Drilled Koctepe-1 well in Hoto license
6 2005 - Turkey – Interests in 2 exploration licenses (Thrace)
- France – Interest in 1 exploration license (Attila)
- Morocco – Reconnaissance license award (Bouanane)
6 2006 - Morocco – Farm out to Dana for exploration license
- Oman – Exploration license award (Block 15)
DENMARK - KARLEBO GEOLOGICAL SETTING AND DRILLING SITE
Li c e ns e ar e a
Li n e o f s ec t i on
Upper Tertiary
We l l s
ba s e m en t f au l t s
Lower Tertiary
LICENSES
1/03 1/02
Cretaceous
Triassic and Jurassic
Silurian
Lavo-1
Cambrian and Ordovician
Helsingborg
crystalline basement
Copenhagen
Malmo
Kungstorp-1
Granvik-1
Hollviken- 1
Ljunghusen-1
Hollviken-2
Falsterborev-1
Smygehuk-1
Figure 5
DENMARK - KARLEBO PROSPECT
FRANCE – ATTILA LICENSE
6 Tethys interest 40 % with Galli
Coz 60 % (operator)
6 Area 1,986 km2
6 Natural gas prospects
6 Drilling planned in 2007
FRANCE - ATTILA LICENSE AND SURROUNDING AREA
License
Many oil fields
One gas field
FRANCE - PROSPECT AND LEADS
1 Prospect
and 4 Leads
1
FRANCE - PIERRE MAUBEUGE PROSPECT
SPAIN - EXPLORATION LICENSES
6 Tethys interest
50% with Ascent
Resources plc
(operator)
Production License
6 Play concept: shallow
surface anticlines for
oil and natural gas
6 Technical work
completed
6 Operator contracting a
drilling rig
Exploration Licenses
SPAIN - HONTOMIN PROSPECT SEISMIC LINE
28
S84
B
Hontomin-4
-8
6
BG-84-
)
09
ig
(or
Sal1
BG-1N
P
BG
-6 7
BG
BG
-84
-0 4
BG-66
BG-24
BG-25
-25
E
23
85
S-
BG
-8 4 B G
-02 -84
W -02
E
BG-1N
S85
BG
-8 4
B-0G3
-68
BG
-8
8
S-
85
3
-2
E
Hon1
Hon2
S-85-23
BG
W
Hon3
Mon1
S-
BG-26
BG-8409
23W
85
3
-2
S-8
5-25
BG
BG
88
HonSW2
S-
85
-2
1
BG
-69
404
BG
-84
E
HonSW1
-8
-840
-03
BG
BG8
1
Hontomin-4
SUMMARY
6
CORE AREA OF ONSHORE EUROPE
6
LOW EXPLORATION COSTS AND EXISTING INFRASTRUCTURE
6
BENEFIT FROM EUROPEAN GAS MARKET DEREGULATION
6
LIMITED COMMITMENTS AND FINANCIAL EXPOSURE
6
“MORE OIL CAN BE FOUND IN OLD AREAS WITH NEW IDEAS
THAN WITH OLD IDEAS IN NEW AREAS”
Discovery consists of seeing what everyone else has seen
and thinking what no one else has thought.