A - EIA - ARI - 2013 World Shale Gas and Shale Oil Resource Assessment

EIA/ARI World Shale Gas and
Shale Oil Resource Assessment

Technically Recoverable Shale Gas and Shale Oil Resources:
An Assessment of 137 Shale Formations in 41 Countries
Outside the United States
Prepared for:
U.S. Energy Information Administration
U.S. Department of Energy
Prepared by:
Advanced Resources International, Inc.
4501 Fairfax Drive, Suite 910, Arlington, VA 22203 USA
P: 703.528.8420 | W: www.adv-res.com
June 2013
EIA/ARI World Shale Gas and Shale Oil Resource Assessment
Table of Contents
EXECUTIVE SUMMARY AND STUDY RESULTS .................................................................................................... 1-1

STUDY METHODOLOGY.......................................................................................................................................... 2-1
I. CANADA ....................................................................................................................................................... I-1
II. MEXICO....................................................................................................................................................... II-1
III. AUSTRALIA ................................................................................................................................................ III-1
IV. N. SOUTH AMERICA ................................................................................................................................ IV-1
V. ARGENTINA ................................................................................................................................................ V-1
VI. BRAZIL ....................................................................................................................................................... VI-1
VII. OTHER S. SOUTH AMERICA ................................................................................................................... VII-1
VIII. POLAND (Including Lithuania and Kaliningrad) ........................................................................................ VIII-1
IX. RUSSIA ...................................................................................................................................................... IX-1
X. EASTERN EUROPE (Bulgaria, Romania, Ukraine)..................................................................................... X-1
XI. UNITED KINGDOM .................................................................................................................................... XI-1
XII. SPAIN ........................................................................................................................................................ XII-1
XIII. NORTHERN AND WESTERN EUROPE .................................................................................................. XIII-1
XIV. MOROCCO (Including Western Sahara and Mauritania) ........................................................................ XIV-1
XV. ALGERIA ................................................................................................................................................... XV-1
XVI. TUNISIA.................................................................................................................................................... XVI-1
XVII. LIBYA....................................................................................................................................................... XVII-1
XVIII. EGYPT.................................................................................................................................................... XVIII-1
XIX. SOUTH AFRICA ....................................................................................................................................... XIX-1
XX. CHINA........................................................................................................................................................ XX-1
XXI. MONGOLIA .............................................................................................................................................. XXI-1
XXII. THAILAND ............................................................................................................................................... XXII-1
XXIII. INDONESIA ............................................................................................................................................ XXIII-1
XXIV. INDIA/PAKISTAN .................................................................................................................................. XXIV-1
XXV. JORDAN ................................................................................................................................................. XXV-1
XXVI. TURKEY ................................................................................................................................................ XXVI-1
June, 2013 i
EXECUTIVE SUMMARY AND STUDY RESULTS
The “World Shale Gas and Shale Oil Resource Assessment”, conducted by Advanced
Resources International, Inc. (ARI) for the U.S. DOE’s Energy Information Administration (EIA),
evaluates the shale gas and shale oil resource in 26 regions, containing 41 individual countries,
Figure 1. The assessment did not include the United States, but for completeness we have
included in the Executive Summary our internal estimates of shale gas and shale oil resources
for the U.S., extracted from ARI’s proprietary shale resource data base.
The information provided in this report should be viewed as the second step on a
continuing pathway toward a more rigorous understanding and a more comprehensive
assessment of the shale gas and shale oil resources of the world. This report captures our
latest view of the in-place and technically recoverable shale gas and shale oil in the 95 shale
basins and 137 shale formations addressed by the study.
Figure 1. Assessed Shale Gas and Shale Oil Basins of the World
June, 2013 1
The twenty-six chapters of the report discuss our current understanding of the quantity
and quality of shale gas and shale oil resources in the 41 assessed countries, Table 1. Initial
shale exploration is underway in many of these countries. New geologic and reservoir data
collected by these industry and research drilling programs will enable future assessments of
shale gas and shale oil resources to progressively become more rigorous.
Table 1. Scope of “EIA/ARI World Shale Gas and Shale Oil Resource Assessment”
Number of
Number of Number of
Continent Region Shale
Countries Basins
Formations
I. Canada 1 12 13
North
II. Mexico 1 5 8
America
Subtotal 2 17 21
Australia III. Australia 1 6 11
IV. N. South America 2 3 3
V. Argentina 1 4 6
South
VI. Brazil 1 3 3
America
VII. Other S. South America 4 3 4
Subtotal 8 13 16
VIII. Poland* 3 5 5
Eastern IX. Russia 1 1 2
Europe X. Other Eastern Europe 3 3 4
Subtotal 7 9 11
XI. UK 1 2 2
Western XII. Spain 1 1 1
Europe XIII. Other Western Europe 5 5 10
Subtotal 7 8 13
Europe Total 14 17 24
XIV. Morocco** 3 2 2
XV. Algeria 1 7 11
XVI. Tunisia 1 1 2
Africa XVII. Libya 1 3 5
XVIII. Egypt 1 4 4
XIX. South Africa 1 1 3
Subtotal 8 18 27
XX. China 1 7 18
XXI. Mongolia 1 2 2
XXII. Thailand 1 1 1
XXIII. Indonesia 1 5 7
Asia
XXIV. India/Pakistan 2 5 6
XXV. Jordan 1 2 2
XXVI. Turkey 1 2 2
Subtotal 8 24 38
Total 41 95 137
*Includes Lithuania and Kaliningrad. **Includes Western Sahara & Mauritania
June, 2013 2
When reviewing the shale gas and shale oil resource assessments presented in this
report, it is important to consider these three points:
 First, the resource assessments in the individual regional and country chapters are
only for the higher quality, “prospective areas” of each shale gas and shale oil basin.
The lower quality and less defined areas in these basins, which likely hold additional
shale resources, are not included in the quantitatively assessed and reported values.
 Second, the in-place and technically recoverable resource values for each shale gas
and shale oil basin have been risked to incorporate: (1) the probability that the shale
play will (or will not) have sufficiently attractive flow rates to become developed; and
(2) an expectation of how much of the prospective area set forth for each shale basin
and formation will eventually be developed. (Attachment C provides a listing of the
risk factors used in this shale resource assessment study.)
 We benefited greatly from the major new efforts on assessing and pursuing shale
gas and shale oil resources, stimulated in part by the 2011 EIA/ARI study in
countries such as Algeria, Argentina and Mexico, among many others.
No doubt, future exploration will lead to changes in our understanding and assessments
of the ultimate size and recoverability of international shale gas and shale oil resources. We
would encourage the U.S. Energy Information Administration, which commissioned this unique,
“cutting edge” shale gas and shale oil resource assessment, to incorporate the new exploration
and resource information that will become available during the coming years, helping keep this
world shale resource assessment “evergreen”.
STUDY AUTHORS
Three individuals, each a long-term member of Advanced Resources International, Inc.,

are the authors of this “International Shale Gas Resource Assessment”, namely: Vello A.
Kuuskraa, President; Scott H. Stevens, Sr. Vice President; and Keith Moodhe, Sr. Consultant.
Messrs. Kuuskraa, Stevens and Moodhe (plus Tyler Van Leeuwen) were the primary authors of
the previous (April, 2011) version of the world shale gas resource assessment. Attachment A
provides brief background information on each of the study authors.
June, 2013 3
In addition, Mr. Aloulou Fawzi, EIA’s Project Manager for this study, provided highly
valuable review and comments, as did numerous EIA, DOE, DOI, USGS and State Department
officials. We are appreciative of their thoughtful input.
SUMMARY OF STUDY FINDINGS
Although the exact in-place and technically recovered resource numbers will change
with time, our work to date shows that the world shale gas and shale oil resource is vast.
 Shale Gas Resources. Overall, for the 41 countries assessed in the EIA/ARI study,
we identified a total risked shale gas in-place of 31,138 Tcf. Of this total,
approximately 6,634 Tcf is considered the risked, technically recoverable shale gas
resource, not including the U.S., Table 2A. Adding the U.S. shale gas resource
increases the assessed shale gas in-place and technically recoverable shale gas
resources of the world to 35,782 Tcf and 7,795 Tcf, respectively.
 Shale Oil Resources. The previous EIA/ARI study did not assess shale oil
resources, thus the 2013 report represents a major new expansion of scope. In this
EIA/ARI assessment, we identified a total risked shale oil in-place of 5,799 billion
barrels, with 286.9 billion barrels as the risked, technically recoverable shale oil
resource, not including the U.S., Table 2B. Adding the U.S. shale oil resource
increases the assessed shale oil in-place and technically recoverable shale oil
resources of the world to 6,753 billion barrels and 335 billion barrels, respectively.
Two-thirds of the assessed, technically recoverable shale gas resource is concentrated

in six countries - - U.S., China, Argentina, Algeria, Canada and Mexico. As shown on Figure 2,
the top ten countries account for over 80% of the currently assessed, technically recoverable
shale gas resources of the world.
Similarly, two-thirds of the assessed, technically recoverable shale oil resource is

concentrated in six countries - - Russia, U.S., China, Argentina, Libya and Venezuela. The top
ten countries, listed on Figure 2, account for about three-quarters of the currently assessed,
technically recoverable shale oil resources of the world.
Importantly, much of this shale resource exists in countries with limited endowments of
conventional oil and gas supplies such as South Africa, Jordan and Chile or resides in countries
where conventional hydrocarbon resources have largely been depleted, such as Europe.
June, 2013 4
Table 2A. Risked Shale Gas In-Place and Technically Recoverable: Seven Continents
Risked Risked Technically
Continent Gas In-Place Recoverable
(Tcf) (Tcf)
North America (Ex. U.S.) 4,647 1,118
Australia 2,046 437
South America 6,390 1,431
Europe 4,895 883
Africa 6,664 1,361
Asia 6,495 1,403
Sub-Total 31,138 6,634

U.S. 4,644 1,161
TOTAL 35,782 7,795
Table 2B. Risked Shale Oil In-Place and Technically Recoverable: Seven Continents
Risked Risked Technically
Continent Oil In-Place Recoverable
(B bbl) (B bbl)
North America (Ex. U.S.) 437 21.9
Australia 403 17.5
South America 1,152 59.7
Europe 1,551 88.6
Africa 882 38.1
Asia 1,375 61.1
Sub-Total 5,799 286.9

U.S. 954 47.7
TOTAL 6,753 334.6
The tabulation of shale resources at the country-level (excluding the U.S.) is provided in
Table 3. More detailed information on the size of the shale gas and shale oil resource, at the
basin- and formation-level, is provided in Attachment B.
Significant additional shale gas and shale oil resources exist in the Middle East, Central
Africa and other countries not yet included in our study. Hopefully, future editions of this report
will address these important potential shale resource areas.
June, 2013 5
Figure 2. Assessed World Shale Gas and Shale Oil Resources (42 Countries, including U.S.)
Technically Recoverable Technically Recoverable

Shale Gas Resources Shale Oil Resources
(T cf) (Billion Barrels)
1. U.S. 1,161 1. Russia 75
2. China 1,115 2. U.S. 48
3. Argentina 802 3. China 32
4. Algeria 707 4. Argentina 27
5. Canada 573 5. Libya 26
6. Mexico 545 6. Australia 18
7. Australia 437 7. Venezuela 13
8. South Africa 390 8. Mexico 13
9. Russia 285 9. Pakistan 9
10. Brazil 245 10. Canada 9
11. Others 1,535 11. Others 65
TOTAL 7,795 TOTAL 335
June, 2013 6
Table 3. Risked Shale Gas and Shale Oil Resources In-Place and Technically Recoverable,
41 Countries Assessed in the EIA/ARI Study
Risked Gas Technically Risked Oil Technically
Continent Region Country In-Place Recoverable In-Place Recoverable
(Tcf) (Tcf) (Billion bbl) (Billion bbl)
I. Canada 2,413 573 162 8.8

North
II. Mexico 2,233 545 275 13.1
America
Total 4,647 1,118 437 21.9
Australia III. Australia 2,046 437 403 17.5
Colombia 308 55 120 6.8

IV. N. South America
Venezuela 815 167 269 13.4
Subtotal 1,123 222 389 20.2
V. Argentina 3,244 802 480 27.0
VI. Brazil 1,279 245 134 5.3
South
Bolivia 154 36 11 0.6
America
Chile 228 48 47 2.3
VII. Other S. South America
Paraguay 350 75 77 3.7
Uruguay 13 2 14 0.6
Subtotal 744 162 150 7.2
Total 6,390 1,431 1,152 59.7
Poland 763 148 65 3.3

VIII. Poland Lithuania 4 0 5 0.3
Kaliningrad 20 2 24 1.2
Eastern IX. Russia 1,921 285 1,243 74.6
Europe Bulgaria 66 17 4 0.2
X. Other Eastern Europe Romania 233 51 6 0.3
Ukraine 572 128 23 1.1
Subtotal 872 195 33 1.6
XI. UK 134 26 17 0.7
XII. Spain 42 8 3 0.1
France 727 137 118 4.7
Western
Germany 80 17 14 0.7
Europe
XIII. Other Western Europe Netherlands 151 26 59 2.9
Denmark 159 32 0 0.0
Sweden 49 10 0 0.0
Subtotal 1,165 221 190 8.3
Europe Total 4,895 883 1,551 88.6
XIV. Morocco* 95 20 5 0.2

XV. Algeria 3,419 707 121 5.7
XVI. Tunisia 114 23 29 1.5
Africa XVII. Libya 942 122 613 26.1
XVIII. Egypt 535 100 114 4.6
XIX. South Africa 1,559 390 0 0.0
Total 6,664 1,361 882 38.1
XX. China 4,746 1,115 644 32.2

XXI. Mongolia 55 4 85 3.4
XXII. Thailand 22 5 0 0.0
XXIII. Indonesia 303 46 234 7.9
Asia India 584 96 87 3.8
XXIV. India/Pakistan
Pakistan 586 105 227 9.1
XXV. Jordan 35 7 4 0.1
XXVI. Turkey 163 24 94 4.7
Total 6,495 1,403 1,375 61.1
Grand Total 31,138 6,634 5,799 286.9

*Includes Western Sahara & Mauritania
June, 2013 7
COMPARISON OF STUDY FINDINGS

Since the publication of the first EIA/ARI shale gas resource assessment in 2011,
considerable new information has become available, helping provide a more rigorous resource
assessment. New basins and countries have been added to the list. Data from more recently
drilled exploration wells have helped constrain the resource size and quality - - sometimes
increasing and sometimes reducing the resource estimates. With new information, some areas
of prospective shale basins previously placed in the “gas window” are now classified as wet
gas/condensate. In addition, associated gas from shale oil plays has been incorporated into the
shale gas resource estimate.
Table 4 provides a comparison of the world shale gas resources included in the current
(year 2013) EIA/ARI assessment with the initial EIA/ARI shale gas resource assessment
published in 2011.
Table 5 provides a more detailed comparison and discussion of the differences between
the 2011 and the current (2013) EIA/ARI estimates of risked, technically recoverable shale gas
resources for 16 selected countries.
Table 4. Comparison of 2011 EIA/ARI Study and

Current EIA/ARI Study of Assessed World Shale Gas Resources
2011 2013
Risked Risked
Continent Recoverable Recoverable
(Tcf) (Tcf)
North America (Ex. U.S.) 1,069 1,118
Australia 396 437

South America 1,225 1,431
Europe 624 883
Africa 1,042 1,361

Asia 1,404 1,403
Total 5,760 6,634
June, 2013 8
Table 5. Selected Comparison of 2011 and Current EIA/ARI Estimates

of World Shale Gas Resources
Risked, Technically Recoverable
Shale Gas Resources (Tcf) Discussion
April 2011 Report May 2013 Report
1. North America
• Canada 388 573 7 basins vs. 12 basins.
• Mexico 681 545 Better data on areal extent.
2. South America
Improved dry and wet gas areal
• Argentina 774 802
definitions.
• Brazil 226 245 New dedicated chapter.
Included associated gas; better
• Venezuela 11 167
data.
3. Europe
Higher TOC criterion, better data
• Poland 187 148
on Ro.
• France 180 137 Better data on SE Basin in France.
Eliminated speculative area for
• Norway 83 0
Alum Shale.
• Ukraine 42 128 Added major basin in Ukraine.
New dedicated chapter.
• Russia - 285
4. Africa
• Algeria 230 707 1 basin vs. 7 basins.
Higher TOC criterion; moved area
• Libya 290 122
to oil.
Reduced area due to igneous
• South Africa 485 390
intrusions.
New dedicated chapter.
• Egypt - 100
5. Asia
• China 1,225 1,115 Better data; higher TOC criterion.
Expanded assessment for
• India/Pakistan 114 201
Pakistan.
June, 2013 9
Beyond the resource numbers, the current EIA/ARI “World Shale Gas and Shale Oil
Resource Assessment” represents a major step-forward in terms of the depth and “hard data” of
the resource information assembled for 137 distinct shale formations and 95 shale basins in 41
countries. In Table 6, we strive to more fully convey the magnitude of differences in these two
shale resource assessments.
Table 6. Comparison of Scope and Coverage,

EIA/ARI 2011 and 2013 World Shale Gas Resource Assessments
EIA/ARI 2011 Report EIA/ARI 2013 Report

No. of Regions (Chapters) 14 26
No. of Countries 32 41
No. of Basins 48 95
No. of Formations 69 137
Resource Coverage
• Shale Gas  
• Shale Oil Not requested 
No. of Pages 355 ~700
No. of Original Maps ~70 ~200
June, 2013 10
Attachment A
Authors of “World Shale Gas and Shale Oil Resource Assessment”
Vello A. Kuuskraa, President of Advanced Resources International, Inc. (ARI), has over 40
years of experience assessing unconventional oil and gas resources. Mr. Kuuskraa headed
the team that prepared the 1978, three volume report entitled “Enhanced Recovery of
Unconventional Gas” for the U.S. Department of Energy (DOE) that helped guide
unconventional gas R&D and technology development efforts during the formative period
1978-2000. He is a member of the Potential Gas Committee and has authored over 100
technical papers on energy resources. Mr. Kuuskraa is a 2001 recipient of the Ellis Island
Medal of Honor that recognizes individuals for exceptional professional contributions by
America's diverse cultural ancestry. He currently serves on the Board of Directors of
Southwestern Energy Company (SWN), on the Board of Directors for Research Partnership to
Secure Energy for America (RPSEA) and on the National Petroleum Council. Mr. Kuuskraa
holds a M.B.A., Highest Distinction from The Wharton Graduate School and a B.S., Applied
Mathematics/ Economics; from North Carolina State University.
Scott H. Stevens, Sr. Vice President of Advanced Resources International, Inc. (ARI), has 30
years of experience in unconventional gas and oil resources. Mr. Stevens advises Major oil
companies, governments, and financial industry clients on shale gas/oil and coalbed methane
investments in North America and abroad. After starting his career with Getty and Texaco in
1983 working the liquids-rich Monterey shale deposit in California, Stevens joined ARI in 1991.
He has initiated or evaluated hundreds of unconventional oil & gas drilling projects in the USA,
Australia, Chile, China, Indonesia, Poland, and other countries. Mr. Stevens holds a B.A. in
Geology (Distinction) from Pomona College, an M.S. in Geological Science from Scripps
Institution of Oceanography, and an A.M. in Regional Studies – East Asia (Economics and
Chinese) from Harvard University.
Keith Moodhe, Sr. Consultant with Advanced Resources International, Inc. (ARI ), has eight
years of experience with unconventional resources in the U.S. and globally. He is an expert in
geographic information system (GIS) mapping and analysis of shale gas/oil and coalbed
methane geologic and reservoir properties. During his career he has constructed a geologic
data base of shale properties in China; assessed the shale and CBM resource potential of
major basins in Southeast Asia, Indonesia, Australia, and South America; and conducted
geologic and GIS analysis of domestic and global shale resources for the U.S. Energy
Information Administration (EIA) and various industry and investment firms. Mr. Moodhe holds
a B.S. in Geology with a minor in Economics from the College of William & Mary.
June, 2013
Attachment B
Estimates of U.S. Shale Gas and Shale Oil Resources Extracted from
Advanced Resources International’s Proprietary Shale Resource Data Base
June, 2013
Estimates of U.S. Shale Gas and Shale Oil Resources Extracted from
Advanced Resources International’s Proprietary Shale Resource Data Base
BACKGROUND
While not within the scope of work of the EIA/ARI study of world shale gas and shale oil
resources, for purposes of completeness we have provided information from Advanced
Resources International’s (ARI) proprietary shale resource data base on U.S. shale gas and
shale oil resources.
The overall estimate of 1,161 Tcf of risked, technically recoverable wet and dry shale
gas for the U.S. represents an aggregation of information from 15 shale basins and 70 distinct
and individually addressed plays, Table B-1. For example, the resource estimate for the major
Marcellus Shale play in the Appalachian Basin is the sum of eight individually assessed plays,
where each play has been partitioned to capture differences in geologic and reservoir conditions
and in projected well performance across this vast basin. (We used an average shale gas
recovery factor of 25% to estimate the U.S. shale gas resource in-place.)
The overall estimate of 47.7 billion barrels of risked, technically recoverable shale oil and
condensate for the U.S. represents an aggregation of information from 8 shale basins and 35
distinct and individually assessed plays, Table B-1. (We used an average shale oil recovery
factor of 5% to estimate the U.S. shale oil resource in-place.)
For completeness, the U.S. has already produced 37 Tcf of shale gas plus modest
volumes of shale oil/condensate, from major shale plays such as the Barnett, Fayetteville and
Bakken, among others. These volumes of past shale gas and shale oil production are not
included in the above remaining reserve and undeveloped shale resource values.
Advanced Resources has plans for performing a major update of its shale gas and shale
oil resource base this year, incorporating emerging shale resource plays such as the
Tuscaloosa Marine Shale in Louisiana, the Eaglebrine (Woodbine/Eagle Ford) in East Texas,
and the Mancos Shale in the San Juan Basin.
June, 2013
Table B-1. U.S. Remaining Shale Gas Reserves and Undeveloped Resources
Shale Gas Shale Oil

Resources Resources
Remaining Remaining
Reserves and Reserves and
Distinct Undeveloped Distinct Undeveloped
Plays Resources Plays Resources
(#) (Tcf) (#) (Billion Barrels)
1. Northeast
▪ Marcellus 8 369 2 0.8
▪ Utica 3 111 2 2.5
▪ Other 3 29 - -
2. Southeast
▪ Haynesville 4 161 - -
▪ Bossier 2 57 - -
▪ Fayetteville 4 48 - -
3. Mid-Continent
▪ Woodford* 9 77 5 1.9
▪ Antrim 1 5 - -
▪ New Albany 1 2 - -
4. Texas
▪ Eagle Ford 6 119 4 13.6
▪ Barnett** 5 72 2 0.4
▪ Permian*** 9 34 9 9.7
5. Rockies/Great Plains
▪ Niobrara**** 8 57 6 4.1
▪ Lewis 1 1 - -
▪ Bakken/Three Forks 6 19 5 14.7
TOTAL 70 1161 35 47.7
*Woodford includes Ardmore, Arkoma and Anadarko (Cana) basins.

**Barnett includes the Barnett Combo.
***Permian includes Avalon, Cline and Wolfcamp shales in the Delaware and Midland sub-basins.
****Niobrara Shale play includes Denver, Piceance and Powder River basins.
June, 2013
Attachment C
Size of Assessed Shale Gas and Shale Oil Resources,
at Basin- and Formation-Levels
June, 2013
Attachment C
Size of Assessed Shale Gas and Shale Oil Resources, at Basin- and Formation-Levels
Continent Region Basin Formation In-Place Recoverable In-Place Recoverable
Muskwa/Otter Park 376 94 0 0.0
Horn River
Evie/Klua 154 39 0 0.0
Cordova Muskwa/Otter Park 81 20 0 0.0
Liard Lower Besa River 526 158 0 0.0
Deep Basin Doig Phosphate 101 25 0 0.0
Alberta Basin Banff/Exshaw 5 0 11 0.3
Canada East and West Shale Basin Duvernay 483 113 67 4.0
Deep Basin North Nordegg 72 13 20 0.8
NW Alberta Area Muskwa 142 31 42 2.1
Southern Alberta Basin Colorado Group 286 43 0 0.0
North America Williston Basin Bakken 16 2 22 1.6
Appalachian Fold Belt Utica 155 31 0 0.0
Windsor Basin Horton Bluff 17 3 0 0.0
Eagle Ford Shale 1,222 343 106 6.3
Burgos
Tithonian Shales 202 50 0 0.0
Eagle Ford Shale 501 100 0 0.0
Sabinas
Tithonian La Casita 118 24 0 0.0
Mexico
Tampico Pimienta 151 23 138 5.5
Tamaulipas 9 1 13 0.5
Tuxpan
Pimienta 10 1 12 0.5
Veracruz Maltrata 21 3 7 0.3
Roseneath-Epsilon-Murteree (Nappamerri) 307 89 17 1.0

Cooper Roseneath-Epsilon-Murteree (Patchawarra) 17 4 9 0.4
Roseneath-Epsilon-Murteree (Tenappera) 1 0 3 0.1
Maryborough Goodwood/Cherwell Mudstone 64 19 0 0.0
Carynginia 124 25 0 0.0
Perth
Australia Australia Kockatea 44 8 14 0.5
Canning Goldwyer 1,227 235 244 9.7
L. Arthur Shale (Dulcie Trough) 41 8 3 0.1
Georgina
L. Arthur Shale (Toko Trough) 27 5 22 0.9
M. Velkerri Shale 94 22 28 1.4
Beetaloo
L. Kyalla Shale 100 22 65 3.3
June, 2013 Attachment C-1

Attachment C
Middle Magdalena Valley La Luna/Tablazo 135 18 79 4.8
Colombia
Llanos Gacheta 18 2 13 0.6
Colombia/Venezuela Maracaibo Basin La Luna/Capacho 970 202 297 14.8
Los Molles 982 275 61 3.7
Neuquen
Vaca Muerta 1,202 308 270 16.2
Aguada Bandera 254 51 0 0.0
Argentina San Jorge Basin
Pozo D-129 184 35 17 0.5
Austral-Magallanes Basin L. Inoceramus-Magnas Verdes 605 129 131 6.6
South America
Parana Basin Ponta Grossa 16 3 0 0.0
Parana Basin Ponta Grossa 450 80 107 4.3
Brazil Solimoes Basin Jandiatuba 323 65 7 0.3
Amazonas Basin Barreirinha 507 100 19 0.8
Paraguay Ponta Grossa 46 8 14 0.5
Parana Basin
Uruguay Cordobes 13 2 14 0.6
Paraguay/Bolivia Chaco Basin Los Monos 457 103 75 3.8
Chile Austral-Magallanes Basin Estratos con Favrella 228 48 47 2.3
Baltic Basin/Warsaw Trough Llandovery 532 105 25 1.2

Lublin Llandovery 46 9 0 0.0
Poland
Podlasie Llandovery 54 10 12 0.6
Fore Sudetic Carboniferous 107 21 0 0.0
Lithuania/Kaliningrad Baltic Basin Llandovery 24 2 29 1.4
Eastern Europe West Siberian Central Bazhenov Central 1,196 144 965 57.9
Russia
West Siberian North Bazhenov North 725 141 278 16.7
Carpathian Foreland Basin L. Silurian 362 72 0 0.0
Ukraine
Dniepr-Donets L. Carboniferous 312 76 23 1.1
Ukraine/Romania L. Silurian 48 10 2 0.1
Moesian Platform
Romania/Bulgaria Etropole 148 37 8 0.4
N. UK Carboniferous Shale Region Carboniferous Shale 126 25 0 0.0

UK
S. UK Jurassic Shale Region Lias Shale 8 1 17 0.7
Spain Cantabrian Jurassic 42 8 3 0.1
Lias Shale 24 2 38 1.5
Paris Basin
France Permian-Carboniferous 666 127 79 3.2
Southeast Basin Lias Shale 37 7 0 0.0
Western Europe Posidonia 78 17 11 0.5
Germany Lower Saxony
Wealden 2 0 3 0.1
Epen 94 15 47 2.4
Netherlands West Netherlands Basin Geverik Member 51 10 6 0.3
Posidonia 7 1 5 0.3
Sweden Alum Shale - Sweden 49 10 0 0.0
Scandinavia Region
Denmark Alum Shale - Denmark 159 32 0 0.0

Attachment C
Tindouf L. Silurian 75 17 5 0.2
Morocco
Tadla L. Silurian 20 3 0 0.0
Frasnian 496 106 78 3.9
Ghadames/Berkine
Tannezuft 731 176 9 0.5
Illizi Tannezuft 304 56 13 0.5
Mouydir Tannezuft 48 10 0 0.0
Frasnian 50 9 5 0.2
Ahnet
Algeria Tannezuft 256 51 0 0.0
Frasnian 467 93 0 0.0
Timimoun
Tannezuft 295 59 0 0.0
Frasnian 94 16 6 0.2
Reggane
Tannezuft 542 105 8 0.3
Tindouf Tannezuft 135 26 2 0.1
Africa Tannezuft 45 11 1 0.0
Tunisia Ghadames
Frasnian 69 12 28 1.4
Tannezuft 240 42 104 5.2
Ghadames
Frasnian 36 5 26 1.3
Libya Sirte/Rachmat Fms 350 28 406 16.2
Sirte
Etel Fm 298 45 51 2.0
Murzuq Tannezuft 19 2 27 1.3
Shoushan/Matruh Khatatba 151 30 17 0.7
Abu Gharadig Khatatba 326 65 47 1.9
Egypt
Alamein Khatatba 17 1 14 0.6
Natrun Khatatba 42 3 36 1.4
Prince Albert 385 96 0 0.0
South Africa Karoo Basin Whitehill 845 211 0 0.0
Collingham 328 82 0 0.0

Attachment C
Qiongzhusi 500 125 0 0.0
Sichuan Basin Longmaxi 1,146 287 0 0.0
Permian 715 215 0 0.0
L. Cambrian 181 45 0 0.0
Yangtze Platform
L. Silurian 415 104 0 0.0
Niutitang/Shuijintuo 46 11 0 0.0
Jianghan Basin Longmaxi 28 7 1 0.0
Qixia/Maokou 40 10 5 0.2
Mufushan 29 7 0 0.0
China
Greater Subei Wufeng/Gaobiajian 144 36 5 0.2
U. Permian 8 2 1 0.1
L. Cambrian 176 44 0 0.0
L. Ordovician 377 94 0 0.0
Tarim Basin
M.-U. Ordovician 265 61 31 1.6
Ketuer 161 16 129 6.5
Pingdiquan/Lucaogou 172 17 109 5.4
Junggar Basin
Triassic 187 19 134 6.7
Songliao Basin Qingshankou 155 16 229 11.5
East Gobi Tsagaantsav 29 2 43 1.7
Asia Mongolia
Tamtsag Tsagaantsav 26 2 43 1.7
Thailand Khorat Basin Nam Duk Fm 22 5 0 0.0
C. Sumatra Brown Shale 41 3 69 2.8
S. Sumatra Talang Akar 68 4 136 4.1
Naintupo 34 5 0 0.0
Indonesia Tarakan Meliat 25 4 1 0.0
Tabul 4 0 11 0.3
Kutei Balikpapan 16 1 17 0.7
Bintuni Aifam Group 114 29 0 0.0
Cambay Basin Cambay Shale 146 30 54 2.7
Krishna-Godavari Permian-Triassic 381 57 20 0.6
India
Cauvery Basin Sattapadi-Andimadam 30 5 8 0.2
Damodar Valley Barren Measure 27 5 5 0.2
Sembar 531 101 145 5.8
Pakistan Lower Indus
Ranikot 55 4 82 3.3
Hamad Batra 33 7 0 0.0
Jordan
Wadi Sirhan Batra 2 0 4 0.1
SE Anatolian Dadas 130 17 91 4.6
Turkey
Thrace Hamitabat 34 6 2 0.1
Total 31,138 6,634 5,799 286.9

Attachment D
Risk Factors Used for Shale Gas and Shale Oil Formations
in the EIA/ARI Resource Assessment
June, 2013
Attachment D
Risk Factors Used for Shale Gas and Shale Oil Formations in the EIA/ARI Resource Assessment
Play Prospective Composite
Continent Region Basin Formation Success Area Success Success
Factor Factor Factor
Muskwa/Otter Park 100% 75% 75%

Horn River
Evie/Klua 100% 75% 75%
Cordova Muskwa/Otter Park 100% 60% 60%
Liard Lower Besa River 100% 50% 50%
Deep Basin Doig Phosphate 100% 50% 50%
Alberta Basin Banff/Exshaw 100% 40% 40%
Canada East and West Shale Basin Duvernay 100% 70% 70%
Deep Basin North Nordegg 100% 50% 50%
NW Alberta Area Muskwa 100% 50% 50%
Southern Alberta Basin Colorado Group 80% 35% 28%
North America Williston Basin Bakken 100% 60% 60%
Appalachian Fold Belt Utica 100% 40% 40%
Windsor Basin Horton Bluff 100% 40% 40%
Eagle Ford Shale 100% 60% 60%
Burgos
Tithonian Shales 60% 50% 30%
Eagle Ford Shale 80% 50% 40%
Sabinas
Tithonian La Casita 60% 30% 18%
Mexico
Tampico Pimienta 70% 50% 35%
Tamaulipas 70% 50% 35%
Tuxpan
Pimienta 70% 50% 35%
Veracruz Maltrata 70% 75% 53%
Roseneath-Epsilon-Murteree (Nappamerri) 100% 75% 75%

Cooper Roseneath-Epsilon-Murteree (Patchawarra) 100% 60% 60%
Roseneath-Epsilon-Murteree (Tenappera) 100% 60% 60%
Maryborough Goodwood/Cherwell Mudstone 75% 50% 38%
Carynginia 100% 60% 60%
Perth
Australia Australia Kockatea 100% 60% 60%
Canning Goldwyer 75% 40% 30%
L. Arthur Shale (Dulcie Trough) 75% 50% 38%
Georgina
L. Arthur Shale (Toko Trough) 75% 50% 38%
M. Velkerri Shale 100% 50% 50%
Beetaloo
L. Kyalla Shale 100% 50% 50%
June, 2013 Attachment D-1

Attachment D
Middle Magdalena Valley La Luna/Tablazo 80% 70% 56%
Colombia
Llanos Gacheta 55% 45% 25%
Colombia/Venezuela Maracaibo Basin La Luna/Capacho 70% 50% 35%
Los Molles 100% 50% 50%
Neuquen
Vaca Muerta 100% 60% 60%
Aguada Bandera 50% 40% 20%
Argentina San Jorge Basin
Pozo D-129 60% 40% 24%
Austral-Magallanes Basin L. Inoceramus-Magnas Verdes 75% 60% 45%
South America
Parana Basin Ponta Grossa 40% 30% 12%
Parana Basin Ponta Grossa 40% 30% 12%
Brazil Solimoes Basin Jandiatuba 50% 30% 15%
Amazonas Basin Barreirinha 50% 30% 15%
Paraguay Ponta Grossa 40% 30% 12%
Parana Basin
Uruguay Cordobes 40% 40% 16%
Paraguay/Bolivia Chaco Basin Los Monos 50% 30% 15%
Chile Austral-Magallanes Basin Estratos con Favrella 75% 60% 45%
Baltic Basin/Warsaw Trough Llandovery 100% 40% 40%

Lublin Llandovery 60% 35% 21%
Poland
Podlasie Llandovery 60% 40% 24%
Fore Sudetic Carboniferous 50% 35% 18%
Lithuania/Kaliningrad Baltic Basin Llandovery 80% 40% 32%
Eastern Europe West Siberian Central Bazhenov Central 100% 45% 45%
Russia
West Siberian North Bazhenov North 75% 35% 26%
Carpathian Foreland Basin L. Silurian 50% 40% 20%
Ukraine
Dniepr-Donets L. Carboniferous 50% 40% 20%
Ukraine/Romania L. Silurian 55% 40% 22%
Moesian Platform
Romania/Bulgaria Etropole 50% 35% 18%
N. UK Carboniferous Shale Region Carboniferous Shale 60% 35% 21%

UK
S. UK Jurassic Shale Region Lias Shale 80% 40% 32%
Spain Cantabrian Jurassic 80% 50% 40%
Lias Shale 100% 50% 50%
Paris Basin
France Permian-Carboniferous 80% 40% 32%
Southeast Basin Lias Shale 60% 30% 18%
Western Europe Posidonia 100% 60% 60%
Germany Lower Saxony
Wealden 75% 60% 45%
Epen 75% 60% 45%
Netherlands West Netherlands Basin Geverik Member 75% 60% 45%
Posidonia 75% 60% 45%
Sweden Alum Shale - Sweden 60% 50% 30%
Scandinavia Region
Denmark Alum Shale - Denmark 60% 40% 24%

Attachment D
Tindouf L. Silurian 50% 40% 20%
Morocco
Tadla L. Silurian 50% 50% 25%
Frasnian 100% 50% 50%
Ghadames/Berkine
Tannezuft 100% 50% 50%
Illizi Tannezuft 50% 40% 20%
Mouydir Tannezuft 50% 40% 20%
Frasnian 50% 40% 20%
Ahnet
Algeria Tannezuft 50% 40% 20%
Timimoun
Reggane
Tindouf Tannezuft 50% 40% 20%
Africa Tannezuft 100% 65% 65%
Tunisia Ghadames
Frasnian 100% 65% 65%
Ghadames
Frasnian 100% 50% 50%
Libya Sirte/Rachmat Fms 80% 50% 40%
Sirte
Etel Fm 80% 50% 40%
Murzuq Tannezuft 100% 50% 50%
Shoushan/Matruh Khatatba 80% 60% 48%
Abu Gharadig Khatatba 80% 60% 48%
Egypt
Alamein Khatatba 70% 35% 25%
Natrun Khatatba 70% 35% 25%
Prince Albert 50% 30% 15%
South Africa Karoo Basin Whitehill 60% 40% 24%
Collingham 50% 30% 15%

Attachment D
Qiongzhusi 100% 70% 70%
Sichuan Basin Longmaxi 100% 70% 70%
Permian 60% 50% 30%
L. Cambrian 80% 70% 56%
Yangtze Platform
L. Silurian 80% 70% 56%
Niutitang/Shuijintuo 60% 40% 24%
Jianghan Basin Longmaxi 60% 40% 24%
Qixia/Maokou 50% 40% 20%
Mufushan 40% 30% 12%
China
Greater Subei Wufeng/Gaobiajian 40% 30% 12%
U. Permian 40% 30% 12%
L. Cambrian 50% 70% 35%
L. Ordovician 50% 65% 33%
Tarim Basin
M.-U. Ordovician 50% 50% 25%
Ketuer 50% 50% 25%
Pingdiquan/Lucaogou 60% 60% 36%
Junggar Basin
Triassic 60% 60% 36%
Songliao Basin Qingshankou 100% 50% 50%
East Gobi Tsagaantsav 40% 50% 20%
Asia Mongolia
Tamtsag Tsagaantsav 40% 50% 20%
Thailand Khorat Basin Nam Duk Fm 50% 30% 15%
C. Sumatra Brown Shale 75% 60% 45%
S. Sumatra Talang Akar 50% 35% 18%
Naintupo 40% 50% 20%
Indonesia Tarakan Meliat 40% 50% 20%
Tabul 40% 50% 20%
Kutei Balikpapan 40% 40% 16%
Bintuni Aifam Group 40% 40% 16%
Cambay Basin Cambay Shale 100% 60% 60%
Krishna-Godavari Permian-Triassic 75% 60% 45%
India
Cauvery Basin Sattapadi-Andimadam 50% 50% 25%
Damodar Valley Barren Measure 80% 50% 40%
Sembar 40% 30% 12%
Pakistan Lower Indus
Ranikot 40% 30% 12%
Hamad Batra 100% 40% 40%
Jordan
Wadi Sirhan Batra 100% 40% 40%
SE Anatolian Dadas 100% 60% 60%
Turkey
Thrace Hamitabat 60% 60% 36%

SHALE GAS AND SHALE OIL RESOURCE

ASSESSMENT METHODOLOGY
INTRODUCTION
This report sets forth Advanced Resources’ methodology for assessing the in-place and
recoverable shale gas and shale oil resources for the EIA/ARI “World Shale Gas and Shale Oil
Resource Assessment.” The methodology relies on geological information and reservoir
properties assembled from the technical literature and data from publically available company
reports and presentations. This publically available information is augmented by internal (non-
confidential) proprietary prior work on U.S. and international shale gas and shale oil resources
by Advanced Resources International.
The report should be viewed as an initial step toward future, more comprehensive
assessments of shale gas and shale oil resources. As additional exploration data are gathered,
evaluated and incorporated, the assessments of shale oil and gas resources will become more
rigorous.
RESOURCE ASSESSMENT METHODOLOGY
The methodology for conducting the basin- and formation-level assessments of shale
gas and shale oil resources includes the following five topics:
1. Conducting preliminary geologic and reservoir characterization of shale basins and

formation(s).
2. Establishing the areal extent of the major shale gas and shale oil formations.
3. Defining the prospective area for each shale gas and shale oil formation.
4. Estimating the risked shale gas and shale oil in-place.
5. Calculating the technically recoverable shale gas and shale oil resource.
Each of these five shale gas and shale oil resource assessment steps is further
discussed below. The shale gas and shale oil resource assessment for Argentina’s Neuquen
Basin is used to illustrate certain of these resource assessment steps.
June, 2013 1
1. Conducting Preliminary Geologic and Reservoir Characterization of Shale

Basins and Formation(s).
The resource assessment begins with the compilation of data from multiple public and
private proprietary sources to define the shale gas and shale oil basins and to select the major
shale gas and shale oil formations to be assessed. The stratigraphic columns and well logs,
showing the geologic age, the source rocks and other data, are used to select the major shale
formations for further study, as illustrated in Figures 1 and 2 for the Neuquen Basin of
Argentina.
Preliminary geological and reservoir data are assembled for each major shale basin and
formation, including the following key items:
 Depositional environment of shale (marine vs non-marine)
 Depth (to top and base of shale interval)
 Structure, including major faults
 Gross shale interval
 Organically-rich gross and net shale thickness
 Total organic content (TOC, by wt.)
 Thermal maturity (Ro)
These geologic and reservoir properties are used to provide a first order overview of the
geologic characteristics of the major shale gas and shale oil formations and to help select the
shale gas and shale oil basins and formations deemed worthy of more intensive assessment.
June, 2013 2
Figure 1: Prospective Shale Basins of Argentina
June, 2013 3
Figure 2. Neuquen Basin Stratigraphy

The Vaca Muerta and Los Molles are Jurassic-age shale formations.
VACA MUERTA FM
LOS MOLLES FM
Modified from Howell, J., et al., 2005
June, 2013 4
2. Establishing the Areal Extent of Major Shale Gas and Shale Oil Formations.
Having identified the major shale gas and shale oil formations, the next step is to
undertake more intensive study to define the areal extent for each of these formations. For this,
the study team searches the technical literature for regional as well as detailed, local cross-
sections identifying the shale oil and gas formations of interest, as illustrated by Figure 3 for the
Vaca Muerta and Los Molles shale gas and shale oil formations in the Neuquen Basin. In
addition, the study team draws on proprietary cross-sections previously prepared by Advanced
Resources and, where necessary, assembles well data to construct new cross-sections.
The regional cross-sections are used to define the lateral extent of the shale formation in
the basin and/or to identify the regional depth and gross interval of the shale formation.
Figure 3: Neuquen Basin SW-NE Cross Section
(Structural settings for the two shale gas and shale oil formations, Vaca Muerta and Los Molles)
A A’
SW NE
FRONTAL
SYNCLINE
VACA MUERTA FM
HUINCUL
ARCH
LOS MOLLES FM
PALEOZOIC BASMENT
Los Molles Gas Vaca Muerta Hydrocarbon Migration Pathways

Los Molles Oil
Los Molles Hydrocarbon Migration Pathways
Vaca Muerta Oil
Vaca Muerta Gas
Mosquera et al., 2009
June, 2013 5
3. Defining the Prospective Area for Each Shale Gas and Shale Oil Formation.
An important and challenging resource assessment step is to establish the portions of

the basin that, in our view, are deemed to be prospective for development of shale gas and
shale oil. The criteria used for establishing the prospective area include:
 Depositional Environment. An important criterion is the depositional environment of

the shale, particularly whether it is marine or non-marine. Marine-deposited shales
tend to have lower clay content and tend to be high in brittle minerals such as quartz,
feldspar and carbonates. Brittle shales respond favorably to hydraulic stimulation.
Shales deposited in non-marine settings (lacustrine, fluvial) tend to be higher in clay,
more ductile and less responsive to hydraulic stimulation.
Figure 4 provides an illustrative ternary diagram useful for classifying the mineral
content of the shale for the Marcellus Shale in Lincoln Co., West Virginia
Figure 4. Ternary Diagram of Shale Mineralogy (Marcellus Shale).
Quartz (Q)
Calcite (C) Clay (Cly)
Source: Modified from AAPG Bull. 4/2007, p. 494 & 495

JAF028263.PPT
June, 2013 6
 Depth. The depth criterion for the prospective area is greater than 1,000 meters but
less than 5,000 meters (3,300 feet to 16,500 feet). Areas shallower than 1,000
meters have lower reservoir pressure and thus lower driving forces for oil and gas
recovery. In addition, shallow shale formations have risks of higher water content in
their natural fracture systems. Areas deeper than 5,000 meters have risks of
reduced permeability and much higher drilling and development costs.
 Total Organic Content (TOC). In general, the average TOC of the prospective area
needs to be greater than 2%. Figure 5 provides an example of using a gamma ray
log to identify the TOC content for the Marcellus Shale in the New York (Chenango
Co.) portion of the Appalachian Basin.
Organic materials such as microorganism fossils and plant matter provide the
requisite carbon, oxygen and hydrogen atoms needed to create natural gas and oil.
As such TOC and carbon type (Types I and II) are important measures of the oil
generation potential of a shale formation.
Figure 5. Relationship of Gamma Ray and Total Organic Carbon
Top Marcellus ~1,300’
Beaver Meadow #1 Well,

Chenango County, New York
• High TOC in Marcellus concentrates
potassium-40 isotope, visible as high
radioactivity (100 to 300 units) on
gamma ray log.
Organically • Gamma ray count correlates
Rich reasonably with TOC.
Marcellus • The Beaver Meadow #1 well has
~200’ approximately 150 feet of organically
rich (TOC >3% by wt.) shale.
Source: J. Reed, 2008

JAF028263.PPT
June, 2013 7
 Thermal Maturity. Thermal maturity measures the degree to which a formation has
been exposed to high heat needed to break down organic matter into hydrocarbons.
The reflectance of certain types of minerals (Ro%) is used as an indication of
Thermal Maturity, Figure 6. The thermal maturity of the oil prone prospective area
has a Ro greater than 0.7% but less than 1.0%. The wet gas and condensate
prospective area has a Ro between 1.0% and 1.3%. Dry gas areas typically have
an Ro greater than 1.3%. Where possible, we have identified these three
hydrocarbon “windows”.
Figure 6. Thermal Maturation Scale
 Geographic Location. The prospective area is limited to the onshore portion of the
shale gas and shale oil basin.
The prospective area, in general, covers less than half of the overall basin area.
Typically, the prospective area will contain a series of higher quality shale gas and shale oil
areas, including a geologically favorable, high resource concentration “core area” and a series
of lower quality and lower resource concentration extension areas. However, this more detailed
delineation of the prospective area is beyond the scope of this initial resource assessment.
June, 2013 8
Finally, shale gas and shale oil basins and formations that have very high clay content
and/or have very high geologic complexity (e.g., thrusted and high stress) are assigned a high
prospective area risk factor or are excluded from the resource assessment. Subsequent, more
intensive and smaller-scale (rather than regional-scale) resource assessments may identify the
more favorable areas of a basin, enabling portions of the basin currently deemed non-
prospective to be added to the shale gas and shale oil resource assessment. Similarly,
advances in well completion practices may enable more of the very high clay content shale
formations to be efficiently stimulated, also enabling these basins and formations to be added in
future years to the resource assessment.
The Neuquen Basin’s Vaca Muerta Shale illustrates the presence of three prospective
areas - - oil, wet gas/condensate and dry gas, Figure 7.
Figure 7. Vaca Muerta Shale Gas and Shale Oil Prospective Areas, Neuquen Basin
June, 2013 9
A more detailed resource assessment, including in-depth appraisal of newly drilled

exploration wells, with modern logs and rigorous core analyses, will be required to define the
next levels of resource quality and concentration for the major international shale plays.
4. Estimating the Risked Shale Gas and Shale Oil In-Place (OIP/GIP).
Detailed geologic and reservoir data are assembled to establish the oil and gas in-place
(OIP/GIP) for the prospective area.
a. Oil In-Place. The calculation of oil in-place for a given areal extent (acre, square
mile) is governed, to a large extent, by two key characteristics of the shale formation - - net
organically-rich shale thickness and oil-filled porosity. In addition, pressure and temperature
govern the volume of gas in solution with the reservoir oil, defined by the reservoir’s formation
volume factor.
 Net Organically-Rich Shale Thickness. The overall geologic interval that contains
the organically-rich shale is obtained from prior stratigraphic studies of the formations
in the basin being appraised. The gross organically-rich thickness of the shale
interval is established from log data and cross-sections, where available. A net to
gross ratio is used to account for the organically barren rock within the gross
organically-rich shale interval and to estimate the net organically-rich thickness of the
shale.
 Oil- and Gas-Filled Porosity. The study assembles porosity data from core and/or
log analyses available in the public literature. When porosity data are not available,
emphasis is placed on identifying the mineralogy of the shale and its maturity for
estimating porosity values from analogous U.S shale basins. Unless other evidence
is available, the study assumes the pores are filled with oil, including solution gas,
free gas and residual water.
 Pressure. The study methodology places particular emphasis on identifying over-

pressured areas. Over-pressured conditions enable a higher portion of the oil to be
produced before the reservoir reaches its “bubble point” where the gas dissolved in
the oil begins to be released. A conservative hydrostatic gradient of 0.433 psi per
foot of depth is used when actual pressure data is unavailable because water salinity
data are usually not available.
June, 2013 10
 Temperature. The study assembles data on the temperature of the shale formation.
A standard temperature gradient of 1.25o F per 100 feet of depth and a surface
temperature of 60o F are used when actual temperature data are unavailable.
The above data are combined using established reservoir engineering equations and
conversion factors to calculate OIP per square mile.
OIP = 7758 ∗ ∗ ∅∗
A is area, in acres (with the conversion factors of 7,758 barrels per acre foot).
h is net organically-rich shale thickness, in feet.
 is porosity, a dimensionless fraction (the values for porosity are obtained from
log or core information published in the technical literature or assigned by
analogy from U.S. shale oil basins; the thermal maturity of the shale and its
depth of burial can influence the porosity value used for the shale).
(So) is the fraction of the porosity filled by oil (So) instead of water (Sw) or gas
(Sg), a dimensionless fraction (the established value for porosity () is
multiplied by the term (So) to establish oil-filled porosity; the value Sw defines
the fraction of the pore space that is filled with water, often the residual or
irreducible reservoir water saturation in the natural fracture and matrix
porosity of the shale; shales may also contain free gas (Sg) in the pore
space, further reducing oil-filled porosity.
Boi is the oil formation gas volume factor that is used to adjust the oil volume in
the reservoirs, typically swollen with gas in solution, to oil volume in stock-
tank barrels; reservoir pressure, temperature and thermal maturity (Ro)
values are used to estimate the Boi value. The procedures for calculating Boi
are provided in standard reservoir engineering text.1,2 In addition, Boi can be
estimated from correlations (Copyright 1947 Chevron Oil Field Research)
printed with permission in McCain, W.D., “The Properties of Petroleum Fluids,
Second Edition (1990)”, p. 320.
1 Ramey, H.J., “Rapid Methods of Estimating Reservoir Compressibilities,” Journal of Petroleum Technology, April, 1964, pp.
447-454.
2 Vasquez, M., and Beggs, H.D., “Correlations for Fluid Physical Property Predictions,” Journal of Petroleum Technology, June
1980, pp. 968-970.
June, 2013 11
In general, the shale oil in the reservoir contains solution or associated gas. A series of
engineering calculations, involving reservoir pressure, temperature and analog data from U.S.
shale oil formations are used to estimate the volume of associated gas in-place and produced
along with the shale oil. As the pressure in the shale oil reservoir drops below the bubble point,
a portion of the solution gas separates from the oil creating a free gas phase in the reservoir. At
this point, both oil (with remaining gas in solution) and free gas are produced.
b. Free Gas In-Place. The calculation of free gas in-place for a given areal extent
(acre, square mile) is governed, to a large extent, by four characteristics of the shale formation
- - pressure, temperature, gas-filled porosity and net organically-rich shale thickness.
 Pressure. The study methodology places particular emphasis on identifying areas

with overpressure, which enables a higher concentration of gas to be contained
within a fixed reservoir volume. A conservative hydrostatic gradient of 0.433 psi per
foot of depth is used when actual pressure data is unavailable.
 Temperature. The study assembles data on the temperature of the shale formation,
giving particular emphasis on identifying areas with higher than average temperature
gradients and surface temperatures. A temperature gradient of 1.25o F per 100 feet
of depth plus a surface temperature of 60o F are used when actual temperature data
is unavailable.
 Gas-Filled Porosity. The study assembles the porosity data from core or log
analyses available in the public literature. When porosity data are not available,
emphasis is placed on identifying the mineralogy of the shale and its maturity for
estimating porosity values from analogous U.S shale basins. Unless other evidence
is available, the study assumes the pores are filled with gas and residual water.
 Net Organically-Rich Shale Thickness. The overall geologic interval that contains
the organically-rich shale is obtained from prior stratigraphic studies of the formations
in the basin being appraised. The gross organically-rich thickness of the shale
interval is established from log data and cross-sections, where available. A net to
gross ratio is used to account for the organically barren rock within the gross
organically-rich shale interval and to estimate the net organically-rich thickness of the
shale.
June, 2013 12
The above data are combined using established PVT reservoir engineering equations
and conversion factors to calculate free GIP per acre. The calculation of free GIP uses the
following standard reservoir engineering equation:
43 , 560 * A h  ( S g )
GIP =
Bg
Where: Bg = 0.02829zT
P
A is area, in acres (with the conversion factors of 43,560 square feet per acre
and 640 acres per square mile).
h is net organically-rich shale thickness, in feet.
 is porosity, a dimensionless fraction (the values for porosity are obtained from
log or core information published in the technical literature or assigned by
analogy from U.S. shale gas basins; the thermal maturity of the shale and its
depth of burial can influence the porosity value used for the shale).
(Sg) is the fraction of the porosity filled by gas (Sg) instead of water (SW) or oil
(So), a dimensionless fraction (the established value for porosity () is
multiplied by the term (Sg) to establish gas-filled porosity; the value Sw
defines the fraction of the pore space that is filled with water, often the
residual or irreducible reservoir water saturation in the natural fracture and
matrix porosity of the shale; liquids-rich shales may also contain condensate
and/or oil (So) in the pore space, further reducing gas-filled porosity.
P is pressure, in psi (pressure data is obtained from well test information

published in the literature, inferred from mud weights used to drill through the
shale sequence, or assigned by analog from U.S. shale gas basins; basins
with normal reservoir pressure are assigned a conservative hydrostatic
gradient of 0.433 psi per foot of depth; basins with indicated overpressure are
assigned pressure gradients of 0.5 to 0.6 psi per foot of depth; basins with
indicated underpressure are assigned pressure gradients of 0.35 to 0.4 psi
per foot of depth).
T is temperature, in degrees Rankin (temperature data is obtained from well

test information published in the literature or from regional temperature
versus depth gradients; the factor 460 oF is added to the reservoir
temperature (in oF) to provide the input value for the gas volume factor (Bg)
equation).
June, 2013 13
Bg is the gas volume factor, in cubic feet per standard cubic feet and includes
the gas deviation factor (z), a dimensionless fraction. (The gas deviation
factor (z) adjusts the ideal compressibility (PVT) factor to account for non-
ideal PVT behavior of the gas; gas deviation factors, complex functions of
pressure, temperature and gas composition, are published in standard
reservoir engineering text.)
c. Adsorbed Gas In-Place. In addition to free gas, shales can hold significant
quantities of gas adsorbed on the surface of the organics (and clays) in the shale formation.
A Langmuir isotherm is established for the prospective area of the basin using available
data on TOC and on thermal maturity to establish the Langmuir volume (VL) and the Langmuir
pressure (PL).
Adsorbed gas in-place is then calculated using the formula below (where P is original
reservoir pressure).
GC = (VL * P) / (PL + P)
The above gas content (GC) (typically measured as cubic feet of gas per ton of net
shale) is converted to gas concentration (adsorbed GIP per square mile) using actual or typical
values for shale density. (Density values for shale are typically in the range of 2.65 gm/cc and
depend on the mineralogy and organic content of the shale.)
The estimates of the Langmuir value (VL) and pressure (PL) for adsorbed gas in-place
calculations are based on either publically available data in the technical literature or internal
(proprietary) data developed by Advanced Resources from prior work on various U.S. and
international shale basins.
In general, the Langmuir volume (VL) is a function of the organic richness and thermal
maturity of the shale, as illustrated in Figure 8. The Langmuir pressure (PL) is a function of how
readily the adsorbed gas on the organics in the shale matrix is released as a function of a finite
decrease in pressure.
The free gas in-place (GIP) and adsorbed GIP are combined to estimate the resource
concentration (Bcf/mi2) for the prospective area of the shale gas basin. Figure 9 illustrates the
relative contributions of free (porosity) gas and adsorbed (sorbed) gas to total gas in-place, as a
function of pressure.
June, 2013 14
Figure 8. Marcellus Shale Adsorbed Gas Content
Adsorbed Gas Content: Lower TOC Adsorbed Gas Content: Higher TOC
(Gas Content in scf/ton vs pressure) (Gas Content in scf/ton vs pressure)
JAF028263.PPT
Figure 9. Combining Free and Adsorbed Gas for Total Gas In-Place
Adsorption Isotherm (Gas Content vs. Pressure)
Shallow Gas Shales Deep Gas Shales
Total
Porosity
Sorbed
JAF028263.PPT
June, 2013 15
b. Establishing the Success/Risk Factors. Two judgmentally established

success/risk factors are used to estimate risked OIP and GIP within the prospective area of the
shale oil and gas formation. These two factors are as follows:
 Play Success Probability Factor. The shale gas and shale oil play success
probability factor captures the likelihood that at least some significant portion of the
shale formation will provide oil and/or gas at attractive flow rates and become
developed. Certain shale oil formations, such as the Duvernay Shale in Alberta,
Canada, are already under development and thus would have a play probability
factor of 100%. More speculative shale oil formations with limited geologic and
reservoir data may only have a play success probability factor of 30% to 40%. As
exploration wells are drilled, tested and produced and information on the viability of
the shale gas and shale oil play is established, the play success probability factor will
change.
 Prospective Area Success (Risk) Factor: The prospective area success (risk) factor
combines a series of concerns that could relegate a portion of the prospective area
to be unsuccessful or unproductive for shale gas and shale oil production. These
concerns include areas with high structural complexity (e.g., deep faults, upthrust
fault blocks); areas with lower thermal maturity (Ro between 0.7% to 0.8%); the outer
edge areas of the prospective area with lower net organic thickness; and other
information appropriate to include in the success (risk) factor.
The prospective area success (risk) factor also captures the amount of available
geologic/reservoir data and the extent of exploration that has occurred in the
prospective area of the basin to determine what portion of the prospective area has
been sufficiently “de-risked”. As exploration and delineation proceed, providing a
more rigorous definition of the prospective area, the prospective area success (risk)
factor will change.
These two success/risk factors are combined to derive a single composite success
factor with which to risk the OIP and GIP for the prospective area.
June, 2013 16
The history of shale gas and shale oil exploration has shown that with time the
success/risk factors improve, particularly the prospective area success factor. As exploration
wells are drilled and the favorable shale oil reservoir settings and prospective areas are more
fully established, it is likely that the assessments of the size of the shale gas and shale oil in-
place will change.
6. Estimating the Technically Recoverable Resource.
The technically recoverable resource is established by multiplying the risked OIP and
GIP by a shale oil and gas recovery efficiency factor, which incorporates a number of geological
inputs and analogs appropriate to each shale gas and shale oil basin and formation. The
recovery efficiency factor uses information on the mineralogy of the shale to determine its
favorability for applying hydraulic fracturing to “shatter” the shale matrix and also considers
other information that would impact shale well productivity, such as: presence of favorable
micro-scale natural fractures; the absence of unfavorable deep cutting faults; the state of stress
(compressibility) for the shale formations in the prospective area; and the extent of reservoir
overpressure as well as the pressure differential between the reservoir original rock pressure
and the reservoir bubble point pressure.
Three basic shale oil recovery efficiency factors, incorporating shale mineralogy,
reservoir properties and geologic complexity, are used in the resource assessment.
 Favorable Oil Recovery. A 6% recovery efficiency factor of the oil in-place is used
for shale oil basins and formations that have low clay content, low to moderate
geologic complexity and favorable reservoir properties such as an over-pressured
shale formation and high oil-filled porosity.
 Average Oil Recovery. A 4% to 5% recovery efficiency factor of the oil in-place is

used for shale gas basins and formations that have a medium clay content,
moderate geologic complexity and average reservoir pressure and other properties.
 Less Favorable Gas Recovery. A 3% recovery efficiency factor of the oil in-place is
used for shale gas basins and formations that have medium to high clay content,
moderate to high geologic complexity and below average reservoir pressure and
other properties.
June, 2013 17
A recovery efficiency factor of up to 8% may be applied in a few exceptional cases for

shale areas with reservoir properties or established high rates of well performance. A recovery
efficiency factor of 2% is applied in cases of severe under-pressure and reservoir complexity.
Attachment A provides information on oil recovery efficiency factors assembled for a

series of U.S. shale oil basins that provide input for the oil recovery factors presented above.
Three basic shale gas recovery efficiency factors, incorporating shale mineralogy,
reservoir properties and geologic complexity, are used in the resource assessment.
 Favorable Gas Recovery. A 25% recovery efficiency factor of the gas in-place is
used for shale gas basins and formations that have low clay content, low to
moderate geologic complexity and favorable reservoir properties such as an
overpressured shale formation and high gas-filled porosity.
 Average Gas Recovery. A 20% recovery efficiency factor of the gas in-place is used
for shale gas basins and formations that have a medium clay content, moderate
geologic complexity and average reservoir pressure and properties.
 Less Favorable Gas Recovery. A 15% recovery efficiency factor of the gas in-place
is used for shale gas basins and formations that have medium to high clay content,
moderate to high geologic complexity and below average reservoir properties.
A recovery efficiency factor of 30% may be applied in exceptional cases for shale areas
with exceptional reservoir performance or established rates of well performance. A recovery
efficiency factor of 10% is applied in cases of severe under-pressure and reservoir complexity.
The recovery efficiency factors for associated (solution) gas are scaled to the oil recovery
factors, discussed above.
a. Two Key Oil Recovery Technologies. Because the native permeability of the shale
gas reservoir is extremely low, on the order of a few hundred nano-darcies (0.0001 md) to a few
milli-darcies (0.001 md), efficient recovery of the oil held in the shale matrix requires two key
well drilling and completion techniques, as illustrate by Figure 10:
June, 2013 18
Figure 10. Lower Damage, More Effective Horizontal Well Completions Provide Higher Reserves Per Well
Initial Barnett Shale Well Completions

(1,500 foot horizontal well with 5 stage frac)
Latest Barnett Shale Well Completions

(3,000 foot horizontal well with 12 stage frac)
JAF028263.PPT
 Long Horizontal Wells. Long horizontal wells (laterals) are designed to place the oil
production well in contact with as much of the shale matrix as technically and
economically feasible.
 Intensive Well Stimulation. Large volume hydraulic stimulations, conducted in

multiple, closely spaced stages (up to 20), are used to “shatter” the shale matrix and
create a permeable reservoir. This intensive set of induced and propped hydraulic
fractures provides the critical flow paths from the shale matrix to the horizontal well.
Existing, small scale natural fractures (micro-fractures) will, if open, contribute
additional flow paths from the shale matrix to the wellbore.
The efficiency of the hydraulic well stimulation depends greatly on the mineralogy of the
shale, as further discussed below.
June, 2013 19
b. Importance of Mineralogy on Recoverable Resources. The mineralogy of the

shale, particularly its relative quartz, carbonate and clay content, significantly determines how
efficiently the induced hydraulic fracture will stimulate the shale, as illustrated by Figure 11:
 Shales with a high percentage of quartz and carbonate tend to be brittle and will
“shatter”, leading to a vast array of small-scale induced fractures providing numerous
flow paths from the matrix to the wellbore, when hydraulic pressure and energy are
injected into the shale matrix, Figure 11A.
 Shales with a high clay content tend to be ductile and to deform instead of shattering,
leading to relatively few induced fractures (providing only limited flow paths from the
matrix to the well) when hydraulic pressure and energy are injected into the shale
matrix, Figure 11B.
Figure 11. The Properties of the Reservoir Rock Greatly Influence the Effectiveness of Hydraulic
Stimulations.
June, 2013 20
c. Significance of Geologic Complexity. A variety of complex geologic features can

reduce the shale gas and shale oil recovery efficiency from a shale basin and formation:
 Extensive Fault Systems. Areas with extensive faults can hinder recovery by limiting
the productive length of the horizontal well, as illustrated by Figure 12.
 Deep Seated Fault System. Vertically extensive faults that cut through organically
rich shale intervals can introduce water into the shale matrix, reducing relative
permeability and flow capacity.
 Thrust Faults and Other High Stress Geological Features. Compressional tectonic
features, such as thrust faults and up-thrusted fault blocks, are an indication of basin
areas with high lateral reservoir stress, reducing the permeability of the shale matrix
and its flow capacity.
Figure 12. 3D Seismic Helps Design Extended vs. Limited Length Lateral Wells
N Well #1 S
Extended Lateral
640 Acre Section U
Well #1 Well #2 D
ult
D 80 ’ Fa
Lateral
160’
t
Faul
U
80’
1 Mile
Lateral
D Well #2
Standard Lateral
ult U
Fa
0’
26
U
D
ult
1 Mile
’ Fa
260
160’
Source: Newfield Exploration Company
JAF028263.PPT
June, 2013 21
SUMMARY
The step-by-step application of the above shale gas and shale oil resource assessment
methodology leads to three key assessment values for each major shale oil and gas formation:
 Shale Gas and Shale Oil In-place Concentration, reported in terms of billion cubic
feet of shale gas per square mile or millions of barrels of shale oil per square mile.
This key resource assessment value defines the richness of the shale gas and shale
oil resource and its relative attractiveness compared to other gas and oil
development options.
 Risked Shale Gas and Shale Oil In-Place, reported in trillion cubic feet (Tcf) of shale
gas and billion barrels (Bbbl) of shale oil for each major shale formation.
 Risked Recoverable Gas and Oil, reported in trillion cubic feet (Tcf) of shale gas and
billion barrels (Bbbl) of shale oil for each major shale formation.
The risked recoverable shale gas and shale oil provide the important “bottom line” value
that helps the reader understand how large is the prospective shale gas and shale oil resource
and what impact this resource may have on the gas and oil options available in each region and
country.
Tables 1 and 2, for the Neuquen Basin and its Vaca Muerta Shale formation, provides a
summary of the resource assessment conducted for one basin and one shale formation in
Argentina including the risked, technically recoverable shale gas and shale oil, as follows:
 308 Tcf of risked, technically recoverable shale gas resource, including 194 Tcf of
dry gas, 91 Tcf of wet gas and 23 Tcf of associated gas, Table 1.
 16.2 billion barrels of technically recoverable shale oil resource, including 2.6 billion
barrels of condensate and 13.6 billion barrels of volatile/black oil, Table 2.
June, 2013 22
Table 1. Shale Gas Reservoir Properties and Resources of Argentina

Neuquen
Basin/Gross Area
Basic Data
2
(66,900 mi )
Shale Formation Vaca Muerta
Geologic Age U. Jurassic - L. Cretaceous
Depositional Environment Marine
2
Prospective Area (mi ) 4,840 3,270 3,550
Physical Extent
Organically Rich 500 500 500
Thickness (ft)
Net 325 325 325
Interval 3,000 - 9,000 4,500 - 9,000 5,500 - 10,000
Depth (ft)
Average 5,000 6,500 8,000
Highly Highly Highly
Reservoir Pressure
Properties
Reservoir
Overpress. Overpress. Overpress.

Average TOC (wt. %) 5.0% 5.0% 5.0%
Thermal Maturity (% Ro) 0.85% 1.15% 1.50%
Clay Content Low/Medium Low/Medium Low/Medium
Gas Phase Assoc. Gas Wet Gas Dry Gas
Resource
2
GIP Concentration (Bcf/mi ) 66.1 185.9 302.9
Risked GIP (Tcf) 192.0 364.8 645.1
Risked Recoverable (Tcf) 23.0 91.2 193.5
Table-2. Shale Oil Reservoir Properties and Resources of Argentina

Neuquen
Basin/Gross Area
Basic Data
2
(66,900 mi )
Shale Formation Vaca Muerta
Geologic Age U. Jurassic - L. Cretaceous
2
Prospective Area (mi ) 4,840 3,270
Physical Extent
Organically Rich 500 500

Thickness (ft)
Net 325 325
Interval 3,000 - 9,000 4,500 - 9,000
Depth (ft)
Average 5,000 6,500
Highly Highly
Reservoir Pressure
Properties
Reservoir
Overpress. Overpress.
Average TOC (wt. %) 5.0% 5.0%
Thermal Maturity (% Ro) 0.85% 1.15%
Clay Content Low/Medium Low/Medium
Oil Phase Oil Condensate
Resource
2
OIP Concentration (MMbbl/mi ) 77.9 22.5
Risked OIP (B bbl) 226.2 44.2
Risked Recoverable (B bbl) 13.57 2.65
June, 2013 23
ATTACHMENT A
ESTABLISHING OIL RECOVERY EFFICIENCY FACTORS FOR THE

INTERNATIONAL “TIGHT OIL” STUDY
INTRODUCTION
The information assembled in Attachment A provides support for the oil recovery
efficiency factors to be used by the International “Tight Oil” Resource Study being conducted for
the U.S. Energy Information Administration by Advanced Resources International, Inc.
DATA BASE
The Advanced Resources proprietary data base used to establish analog values for the
oil recovery efficiency factor in the International “Tight Oil” Resource Study consists of 28 “tight
oil” plays in seven U.S. shale and tight sand/lime basins.
Table A-1 provides a listing of the 28 U.S. “tight oil” plays included in the analysis as well
as key geological and reservoir properties that influence oil recovery efficiency, such as: (1)
reservoir pressure; (2) thermal maturity; and (3) the formation volume factor.
In addition, Table A-1 provides information on the geologic age of the “tight oil” formation
which influences its depositional style. In general, the 28 U.S. “tight oil” plays have deep marine
depositions with low to moderate clay content.
ANALYTIC RESULTS
Table A-2 provides the oil recovery efficiency factor estimated for each of the 28 U.S.
“tight oil” plays in the data base.
 The oil in-place, shown in thousand barrels per square mile, is calculated from the
data on Table A-1 as well as from data in Advanced Resources proprietary
unconventional gas data base.
 The oil recovery, also shown in thousand barrels per square mile, is from “type
curves” based calculations of oil recovery per well times the number of wells
expected to be drilled per square mile.
June, 2013 24
 The oil recovery efficiency, shown as a percent, is calculated by dividing oil recovery
by oil in-place.
FINDINGS AND OBSERVATIONS
A closer look at the oil recovery efficiency data on Table A-2 leads to the following
findings and observations:
 The oil recovery efficiency values range from about 1% to 9%, with an un-weighted
average of about 3.5%.
 Taking out five of the extremely low oil recovery efficiency plays (which we would
classify as non-productive) - - Mississippi Lime (Eastern Oklahoma Ext.), Mississippi
Lime (Kansas Ext.), Delaware Wolfcamp (Texas Ext.), D-J Niobrara (North Ext. #2),
and D-J Niobrara (East Ext.), raises the average oil recovery efficiency to 4.1%.
 Six of the U.S. “tight oil” plays have oil recovery factors that range from about 8% to
about 9%.
 Four of the U.S. “tight oil” plays have oil recovery factors that range from about 4% to
about 6%.
 Twelve of the U.S. “tight oil” plays have oil recovery factors that range from about 2%
to about 3%.
A number of actions could change these initial estimates of oil recovery efficiency in
future years, including: (1) use of closer well spacing; (2) continued improvements in oil
recovery technology, including use of longer laterals and more frac stages; (3) completion of
more of the vertical net pay encountered by the wellbore; and (4) development of the lower
productivity portions of each play area.
June, 2013 25
Table A-1. Tight Oil Data Base Used for Establishing Oil Recovery Efficiency Factors
Thermal Formation
Basin Formation/Play Age Reservoir Pressure Maturity Volume Factor
(% Ro) (Boi)
Bakken ND Core Mississippian‐Devonian Overpressured 0.80% 1.35

Bakken ND Ext. Mississippian‐Devonian Overpressured 0.80% 1.58
Williston Bakken MT Mississippian‐Devonian Overpressured 0.75% 1.26
Three Forks ND Devonian Overpressured 0.85% 1.47
Three Forks MT Devonian Overpressured 0.85% 1.27
Eagle Ford Play #3A Late Cretaceous Overpressured 0.90% 1.75
Eagle Ford Play #3B Late Cretaceous Overpressured 0.85% 2.01
Maverick
Eagle Ford Play #4A Late Cretaceous Overpressured 0.75% 1.57
Eagle Ford Play #4B Late Cretaceous Overpressured 0.70% 1.33
Barnett Combo ‐ Core Mississippian Slightly Overpressured 0.90% 1.53
Ft. Worth
Barnett Combo ‐ Ext. Mississippian Slightly Overpressured 0.80% 1.41
Del. Avalon/BS (NM) Permian Slightly Overpressured 0.90% 1.70
Del. Avalon/BS (TX) Permian Slightly Overpressured 0.90% 1.74
Del. Wolfcamp (TX Core) Permian‐Pennsylvanian Slightly Overpressured 0.92% 1.96
Del. Wolfcamp (TX Ext.) Permian‐Pennsylvanian Slightly Overpressured 0.92% 1.79
Permian
Del. Wolfcamp (NM Ext.) Permian‐Pennsylvanian Slightly Overpressured 0.92% 1.85
Midl. Wolfcamp Core Permian‐Pennsylvanian Overpressured 0.90% 1.67
Midl. Wolfcamp Ext. Permian‐Pennsylvanian Overpressured 0.90% 1.66
Midl. Cline Shale Pennsylvanian Overpressured 0.90% 1.82
Cana Woodford ‐ Oil Upper Devonian Overpressured 0.80% 1.76
Miss. Lime ‐ Central OK Core Mississippian Normal 0.90% 1.29
Anadarko
Miss. Lime ‐ Eastern OK Ext. Mississippian Normal 0.90% 1.20
Miss. Lime ‐ KS Ext. Mississippian Normal 0.90% 1.29
Appalachian Utica Shale ‐ Oil Ordovician Slightly Overpressured 0.80% 1.46
D‐J Niobrara Core Late Cretaceous Normal 1.00% 1.57
D‐J Niobrara East Ext. Late Cretaceous Normal 0.70% 1.26
D‐J
D‐J Niobrara North Ext. #1 Late Cretaceous Normal 0.70% 1.37
D‐J Niobrara North Ext. #2 Late Cretaceous Normal 0.65% 1.28
June, 2013 26
Table A-2. Oil Recovery Efficiency for 28 U.S. Tight Oil Plays
(Black Oil, Volatile Oil and Condensates)
Oil
Oil
Oil In‐Place Recovery
Basin Formation/Play Age Recovery
(MBbls/Mi2) Efficiency
(MBbls/Mi2)
(%)
Bakken ND Core Mississippian‐Devonian 12,245 1,025 8.4%
Bakken ND Ext. Mississippian‐Devonian 9,599 736 7.7%
Williston Bakken MT Mississippian‐Devonian 10,958 422 3.9%
Three Forks ND Devonian 9,859 810 8.2%
Three Forks MT Devonian 10,415 376 3.6%
Eagle Ford Play #3A Late Cretaceous 22,455 1,827 8.1%
Eagle Ford Play #3B Late Cretaceous 25,738 2,328 9.0%
Maverick
Eagle Ford Play #4A Late Cretaceous 45,350 1,895 4.2%
Eagle Ford Play #4B Late Cretaceous 34,505 2,007 5.8%
Barnett Combo ‐ Core Mississippian 25,262 377 1.5%
Ft. Worth
Barnett Combo ‐ Ext. Mississippian 13,750 251 1.8%
Del. Avalon/BS (NM) Permian 34,976 648 1.9%
Del. Avalon/BS (TX) Permian 27,354 580 2.1%
Del. Wolfcamp (TX Core) Permian‐Pennsylvanian 35,390 1,193 3.4%
Del. Wolfcamp (TX Ext.) Permian‐Pennsylvanian 27,683 372 1.3%
Permian
Del. Wolfcamp (NM Ext.) Permian‐Pennsylvanian 21,485 506 2.4%
Midl. Wolfcamp Core Permian‐Pennsylvanian 53,304 1,012 1.9%
Midl. Wolfcamp Ext. Permian‐Pennsylvanian 46,767 756 1.6%
Midl. Cline Shale Pennsylvanian 32,148 892 2.8%
Cana Woodford ‐ Oil Upper Devonian 11,413 964 8.4%
Miss. Lime ‐ Central OK Core Mississippian 28,364 885 3.1%
Anadarko
Miss. Lime ‐ Eastern OK Ext. Mississippian 30,441 189 0.6%
Miss. Lime ‐ KS Ext. Mississippian 21,881 294 1.3%
Appalachian Utica Shale ‐ Oil Ordovician 42,408 906 2.1%
D‐J Niobrara Core Late Cretaceous 33,061 703 2.1%
D‐J Niobrara East Ext. Late Cretaceous 30,676 363 1.2%
D‐J
D‐J Niobrara North Ext. #1 Late Cretaceous 28,722 1,326 4.6%
D‐J Niobrara North Ext. #2 Late Cretaceous 16,469 143 0.9%
June, 2013 27
I. Canada EIA/ARI W
World Shale Gas and Shale Oil Resource Assesssment
I. CANAD
C DA
SUMMA
ARY
Canada
C has a series of large hydroc
carbon basin
ns with thick, organic-ricch shales tha
at are
assessed
d by this res
source study
y. Figure I-1 illustrates ccertain of the major sha
ale gas and sshale
oil basins
s in Western
n Canada.
Figure
F I-1. Seleected Shale Gaas and Oil Bassins of Westeern Canada
Sourcee: ARI, 2012.
June, 2013 I--1

I. Canada EIA/ARI W
The
T full set of
o Canadian shale gas and
a shale o il basins asssessed in th
his study incclude:
(1) the Horn
H River Basin, the Cordova Em
mbayment a
and the Lia
ard Basin (lo
ocated in B
British
Columbia
a and the No
orthwest Territories) plu
us the Doig P
Phosphate S
Shale (locate
ed in both B
British
Columbia
a and Alberrta); (2) the ons and plays in
e numerous shale gas and shale oil formatio
Alberta, such
s as the Banff/Exshaw, the Duv
vernay, the N
Nordegg, the Muskwa a
and the Colo
orado
Group; (3
3) the Willistton Basin’s Bakken
B Shale in Saskattchewan and
d Manitoba; and (4) the Utica
d the Horton Bluff Shale in Nova Sco
Shale in Quebec and otia.
Western
W Can
nada also contains
c the
e prolific and
d areally exxtensive Mo
ontney and Doig
Resource
e Plays (in both
b British Columbia and
a Alberta) categorized
d primarily a
as tight sand
d and
siltstone reservoirs. As thus, these two important u
unconventio
onal gas resources are
e not
e gas and sh
included in this shale hale oil reso
ource assesssment. In ad
ddition, Can
nada has a sseries
onal hydrocarbon-bearin
of additio ng siltstone and shale formations that are not included in the
quantitative portion of
o this resou
urce study either
e becausse of low orrganic conte
ent (Wilrich S
Shale
a) or becaus
in Alberta se of limited information (Frederick B
Brook Shale in New Brunswick).
W estimate risked shale gas in-pla

We nada of 2,413 Tcf, with
ace for Can h 573 Tcf as the
risked, te
echnically re
ecoverable shale
s gas res
source. In a
addition, we
e estimate rissked shale o
oil in-
place for Canada of
o 162 billio
on barrels, with 8.8 biillion barrelss as the rissked, techn
nically
recoverable shale oil
o resource.. Table I-1 provides a more in-d
depth, regional tabulatio
on of
s shale gas and oil resources.
Canada’s
A new drilling occurs and more detailed in formation iss obtained on these large,
As
emerging
g shale pla
ays, the es
stimates of the size of their in--place resources and their
recoverability will und
doubtedly ch
hange.
June, 2013 I--2

I. Canada EIA/ARI W
Table I--1. Shale Gas and Oil Resouurces of Canaada

Risked Risk
ked Technically
y
Resource In-Place Recov
verable Resourrce
egion
Re Basin / Formation
F
Oil/Condennsate Natural Gas Oil/Condensate Natura
al Gas
(Million bbl)
b (Tcf)) n bbl)
(Million (Tc
cf)
Horn River (Musk
H kwa / Otter Park ) - 375.77 - 93
3.9
H
Horn River (Evie / Klua) - 154.22 - 38
8.5
British Columbia
C / C
Cordova (Muskwa a / Otter Park) - 81.0
0 - 20
0.3
Northwes st Territories Liard
L (Lower Bes sa River) - 526.33 - 157
7.9
D
Deep (Doig Phossphate) - 100.77 - 25
5.2
S
Sub-Total - 1,237.8 - 335
5.8
Alberta (Banff / Exshaw)

A E 10,500
0 5.1 3200 0. 3
E
E/W Shale (Duve ernay) 66,800
0 482.6
6 4,01
10 113
3.0
D
Deep Basin (Nord degg) 19,800
0 72.0
0 7900 13
3.3
Al berta
N
N.W. Alberta (Muuskwa) 42,400
0 141.7
7 2,12
20 31.1
S Alberta (Colorrado)
S. - 285.6
6 - 2.8
42
S
Sub-Total 139,500 987.1
1 7,24
40 200
0.5
Saskattchewan /
W
Williston (Bakken
n) 22,500
0 16.0
0 1,60
00 2..2
Man nitoba
Qu
uebec A
App. Fold Belt (U
Utica) - 155.3
3 - 31.1
Nova
a Scotia W
Windsor (Horton Bluff) - 17.0
0 - 3..4
T
Total 162,000 2,413.2 40
8,84 572
2.9
*Less than 0.5 Tcf
June, 2013 I--3

I. Canada EIA/ARI W
BRITIS
SH COLUMBIA/NO
ORTHWES
ST TERR
RITORIES
British
B Colum
mbia (BC) and
a the Norrthwest Terrritories (NW
WT) hold thrree “world-sscale”
shale basins, the Ho
orn River Ba
asin, the Corrdova Emba
ayment and the Liard Ba
asin. In add
dition,
nic-rich Doig
the organ g Phosphate Shale existts on each s ide of the ce
entral Alberta
a and BC bo
order.
In additio
on to these shale resou
urces, Britis
sh Columbia
a also has p
portions of tthe massive tight
sand and
d siltstone Montney Re
esource an
nd Doig Re
esource playys. These two low org
ganic
content formations, classified as
a tight san
nds by Can
nada’s Natio
onal Energyy Board, are
e not
included in this shale
e gas and oill resource as
ssessment.
This
T resource
e assessme
ent study ha
as benefitted
d greatly fro
om the exte
ensive geolo
ogical
and rese
ervoir charac
cterization work
w supportted by the B
BC Ministry of Energy a
and Mines on the
shale ba ormations off British Columbia.1,2 In
asins and fo n addition, this study ha
as drawn on the
extensive ng and welll performance informat ion provided
e well drillin d by Canad
da’s oil and
d gas
industry. These two
o information
n sources se
erve as foun
ndations for the assessm
ment of the sshale
gas and oil resource
es of British
h Columbia and the No
orthwest Terrritories. Th
he four BC//NWT
shale oil and gas ba
asins assess
sed by this study
s contain
n 1,238 Tcf of risked sh
hale gas in-p
place,
with 336 Tcf as the risked, techn
nically recove
erable shale
e gas resourcce, Table I-2
2.
Table I-2. Shale Gas Reeservoir Propeerties and Ressources of Briitish Columbiaa/NWT
Horn River
R Cordova Liard Deep Baasin
Basin/Grosss Area
Basic Data
2 2 2 2
(7,100 mi ) (4,290 mi ) (4,300 mi ) (24,800 mi )
Shale Formmation Muskwa/Otter Parkk Evie/Klua Muskwa/Otter Park
P Lower Besa River Doig Phossphate
Geologicc Age Devonian Devonian Devonian Devoniaan Triasssic
Depositional En
nvironment Marine Marine Marine Marinee Marinne
2
Prospective Area (mi ) 3,320 3,320 2,000 3,300 3,000
Physical Extent
Orgganically Rich 420 160 230 500 1655

Th
hickness (ft)
Nett 380 144 207 400 1500
Inteerval 6,300 - 10,200 6,800 - 10,700 5,500 - 6,2000 6,600 - 13,000 6,800 - 10,900
Deepth (ft)
Aveerage 8,000 8,500 6,000 10,0000 9,250
Mod.
Reeservoir Pressuree M
Mod. Overpress. Mod. Overpresss. Highly Overppress. Mod. Overrpress.
Properties
Reservoir
Overpress.
Avverage TOC (wt. %)
% 3.5% 4.5% 2.0% 3.5% 5.0%
%
Th
hermal Maturity (% Ro) 3.50% 3.80% 2.50% 3.80% 1.10%
%
Clay Content Low Low Low Low Loww
Gas Phase Dry Gas Dry Gas Dry Gas Dry Gass Dry Gas
G
Resource
2
GIP Concentration (Bcf/mi ) 150.9 61.9 67.5 319.0 67.11
Risked GIP (Tcf) 375.7 154.2 81.0 526.3 100.7
Risked Recoverablle (Tcf) 93.9 38.5 20.3 157.9 25.22
June, 2013 I--4

I. Canada EIA/ARI W
1. HORN
H RIVE
ER BASIN
1.1 Geologic
G Se
etting
The
T Horn Riv
ver Basin co
overs an are mi2 in northe
ea of 7,100 m ern British C
Columbia and the
Northwes
st Territories
s, Figure I-2
2. The bas n border is defined by the Bovie F
sin’s western Fault,
which se
eparates the Horn Riverr Basin from
m the Liard B
Basin. Its northern bord
der, in North
hwest
Territorie
es, is defined
d by the thinning of the shale
s sectio n, and its so
outhern bord
der is constra
ained
by the piinch-out of the shale. Itts eastern border
b is deffined by the Slave Pointt/Keg River Uplift
and the thinning
t of the shale de
eposit. We have
h defined
d a higher q 0-mi2 prospe
quality, 3,320 ective
area for the
t Horn Riv
ver Shale in the west-central portion
n of the basin
n, Figure I-3.
The
T Horn Riv
ver Basin contains a seriies of organic-rich shale
es, with the M
Middle Devo
onian-
age Muskwa/Otter Park
P e/Klua mostt prominent, Figure I-4.3 These two shale units were
and Evie
mapped in the Horn
n River Basin to establis
sh a prospe
ective area w
with sufficie
ent thicknesss and
e concentration favorable
resource e for shale gas
g developm
ment. Otherr shales in th
his basin (bu
ut not
included in the study
y) include th
he high orga
anic-content,, lower therm
mal maturityy, poorly de
efined
ppian Banff//Exshaw Sh
Mississip hale and th
he thick, low
w organic-ccontent Late
e Devonian Fort
Simpson Shale.
1.2 Reservoir
R Properties
P (Prospectiive Area)
Two
T major sh
hale gas form
mations, the Muskwa/Ottter Park and
d the Evie/K
Klua, are inclluded
ortion of our resource as
in the quantitative po ssessment.
Muskwa/Otte
M er Park. The
e Middle De
evonian Musskwa/Otter P
Park Shale, the upper sshale
interval within
w the Horn
H River Group,
G is th
he main sha
ale gas targ
get in the Horn River B
Basin.
Drilling depth
d to the
e top of the Muskwa/Ottter Park Sh
hale rangess from 6,300
0 to 10,200 feet,
averaging 8,000 fee
et for the prrospective area. The M
Muskwa/Otte
er Park Sha
ale is moderrately
ssured in th
over-pres he center of the basin. With an orrganic-rich g
gross shale thickness off 420
feet, the Muskwa/Ottter Park ha
as a net pa
ay of 380 fe
eet. Total orrganic conte
ent (TOC) in
n the
prospective area ave
erages 3.5%
% for the net shale thickn
ness investig
gated. Therrmal maturityy (Ro)
is high, averaging
a ab
bout 3.5% an
nd placing th
his shale gass in the dry g
gas window. Because o
of the
high therrmal maturity
y in the pros
spective area
a, the in-pla ce shale gass has a CO2 content of 11%.
The Muskwa/Otte
M r Park Shale ha
as high quartz a
and low clay con
ntent.
June, 2013 I--5

I. Canada EIA/ARI W
World Shale Gas andd Shale Oil Resourcee Assessment
FFigure I-2. Horn River

R Basin (Muskkwa/Otter Park Shaale) Outline and Depth
D Figure I-3.
I Horn River Baasin (Muskwa/Otteer Park Shale) Isoopach and
Prospective Areea
S
Source: ARI, 2013. Source: ARI, 2013.
JJune, 2013 I-6

I. Canada EIA/ARI W
Figuree I-4. NE British Columbia, Devonian andd Mississippiaan Stratigraphhy
Middle
ower
Lo
Sourcce: D. J. K. Ross and R. M. Bustin, AAPG

A Bulletin, v. 922, no. 1 (January 2008),
2 pp. 87–125 JAF21300.A
AI
Evie/Klua.
E The
T Middle Devonian Evie/Klua
E Sh
hale, the low
wer shale in
nterval within the
Horn Riv
ver Group, provides
p a se
econdary sh
hale gas targ Horn River Basin. The ttop of
get in the H
the Evie//Klua Shale is approxim
mately 500 fe
eet below th
he top of the Otter Park S
e Muskwa/O Shale,
separate
ed by an orrganically-lea
an rock inte
erval. The organic-ricch Evie/Klua
a Shale, witth an
average TOC of 4.5%, has a th
hickness of about
a 160 fe
eet (gross) a
and 144 fee
et (net). The
ermal
maturity (Ro) is high
h at about 3.8%,
3 placing
g this shale
e gas in the dry gas window. The
e CO2
content is estimated at 13%. Th
he Evie/Klua
a Shale has a low clay ccontent making the form
mation
e for hydraulic stimulatio
favorable on.
Other
O Shales
s. The Horn ains two shallower shales - - the U
n River Basiin also conta Upper
Devonian w Shale and the Late De
n/Lower Mississippian Banff/Exshaw
B evonian Fortt Simpson S
Shale.
The Ban
nff/Exshaw Shale,
S while
e rich in TO
OC (~5%) iis relatively thin (10 to
o 30 feet). The
massively thick Fort Simpson Shale, with a gross intervval of 2,000
0 to 3,000 fe
eet, is organ
nically
OC <1%). Because of th
lean (TO hese less fa
avorable res ervoir prope
erties and lim
mitations of data,
June, 2013 I--7

I. Canada EIA/ARI W
these two
o shale units
s have not been
b include
ed in the qua
antitative portion of the H
Horn River B
Basin
shale res
source asses
ssment.
1.3 Resource
R Assessmen
A nt
The
T prospec
ctive area for
f both the
e Horn Rivver Muskwa
a/Otter Parkk Shale and
d the
Evie/Klua
a Shale is ap y 3,320 mi2.
pproximately
Within
W this prospective
p area, the Horn
H River Muskwa/Ottter Park S
Shale has a rich
e concentration of about 151 Bcf/mi2 and a risked
resource d gas in-placce is 376 Tccf, excluding CO2.
Based on
n favorable reservoir mineralogy an
nd other prop
perties, we e
estimate a risked, techn
nically
recoverable shale ga
as resource of 94 Tcf forr the Muskwa
a/Otter Parkk Shale, Tab
ble I-2.
The
T thinner Evie/Klua
E Sh
hale has a resource
r con of 62 Bcf/mi2 and 154 T
ncentration o Tcf of
risked ga
as in-place, excluding CO
C 2. We es
stimate a rissked, technically recove
erable shale
e gas
resource
e for the Evie
e/Klua Shale
e of 39 Tcf, Table
T I-2.
1.4 Comparison
C n with Other Resourc
ce Assess
sments
In
n mid-2010, the Canadian Society for
f Unconve
entional Gass estimated 75 to 170 T
Tcf of
marketab
ble (recoverable after extraction
e of CO2 and a ny NGLs) sshale gas fo
or the Horn River
basin.4 Subsequently, in 2011, the BC Ministry
M of E
Energy and Mines (BC
C MEM) and
d the
ard (NEB) pu
National Energy Boa ublished an assessmentt for the sha
ale gas resou
urces of the Horn
River Ba entified 448 Tcf of gas in-place, w
asin that ide with an expe
ected marke
etable shale
e gas
e of 78 Tcf.5
resource
W estimate a larger risked, technic

We cally recove rable shale gas resourcce of 133 Tcf for
the two shale
s units assessed by
b this study
y, using a re
ecovery facttor of 25% of the shale
e gas
resource
e in-place. Our
O recovery
y factor is consistent wiith the 25% recovery fa
actor used b
by the
BC Oil and
a Gas Co
ommission in their 2011 hydrocarb
bon reserve
es report forr the Horn River
Basin.6 The
T BC ME
EM/NEB Ho
orn River Basin
B ort, with a lower 78 T
asses sment repo Tcf of
marketab
ble (recovera
able) shale gas
g resource
e, implies a lower recove
ery factor off 17.4% of ga
as in-
place. (The
( BC ME
EM/NEB ass
sessment ex
xcluded CO2 content and
d produced gas used ass fuel
from marrketable sha
ale gas.)
June, 2013 I--8

I. Canada EIA/ARI W
Consistent
C with
w the exp
perience of shale gass developme
ent in the U.S., this sstudy
anticipate
es progressively increas
sed efficienc
cies for shal e gas recovvery as industry optimize
es its
well com
mpletion and production practices. One
O examp le is Nexen’s testing off advanced sshale
well com hods in the Horn River Basin.
mpletion meth The
ese advanced methodss are designed to
increase EURs in the
e Horn Riverr Basin shale
es from 11 B
Bcf/well to 16
6 Bcf/well.
1.5 Recent
R Activity
A number of major and in River Shale play,

ndependent companies are active in the Horn R
including
g Apache Ca
anada, EnCa
ana, EOG Resources,
R Nexen, Devvon Canada, Quicksilver and
others.
Apache
A Cana
ada, the Ho
orn River Ba
asin’s most active operrator with 72
2 wells targ
geting
shale gas in the bas
sin, has full-scale develo
opment und erway in the
e Two Island
d Lake area
a with
net production of 90
0 million cub
bic feet per day
d (MMcfd
d). Apache estimates a net recove
erable
gas resource of 9.2 Tcf
T from its shale
s leases
s in the Horn n. 7
n River Basin
EnCana,
E with
h 68 long horizontal wells, produced
d a net 95 M
MMcfed in 20
011 from its sshale
gas lease
es in the Ho
orn River Bas
sin. Devon, with 22 sha le gas wellss, is in the ea
arly stages o
of de-
risking its 170,000 net
n acre lea
ase position,, which the company e
estimates co
ontains nearrly 10
Tcfe of net
n risked res
source. EO
OG, with a 15
57,000 net a
acre lease position and 9 Tcf of pote
ential
recoverable resource
es, has drillled 35 shale
e gas wells and claimss that the pe
erformance of its
initial sett of shale ga
as wells has
s met or exceeded expe
ectations. Q
Quicksilver ha
as a 130,00
00 net
acre leas
se position, 18 shale ga
as wells and
d a projecte
ed recoverab
ble resource
e of over 10
0 Tcf.
Nexen, with
w 90,000 acres, has drilled 42 horizontal
h we
ells and esttimates 6 Tccf of recove
erable
resource ase area.8
es from its lea
Total
T natural gas produ
uction from the Horn R
River Basin was 382 M
MMcfd from
m 159
productiv
ve wells in 2011. In th
heir 2010 re
eport, the B
BC Oil and Gas Comm
mission (BCO
OGC)
estimated
d 10 Tcf of initial
i raw ga
as reserves from 40 Tcff of original g
gas in-place
e, equal to a 25%
recovery factor. 8 In their 2011 report, th
he BCOGC increased tthe Horn R
River Shale initial
recoverable raw gas reserves to 11.5 Tcf.
June, 2013 I--9

I. Canada EIA/ARI W
The
T gas pro
ocessing an
nd transporttation capaccity in the Horn Riverr Basin is b
being
expanded to provide
e improved market acce
ess for its g
growing sha
ale gas prod
duction. Pip
peline
cture is bein
infrastruc ng expanded
d to bring the gas sou th to a series of propo
osed LNG e
export
facilities. A 287-mile
e (480-km) Pacific
P Trail Pipeline
P under constrruction to connect the Kitimat
is u
port plant (d
LNG exp due on line in 2017) wiith Spectra Energy’s W
West Coast P
Pipeline Sysstem,
Figure I-5. The Kittimat LNG te
erminal has an announcced initial se
end-out cap
pacity of 5 m
million
tons of LNG per yearr (MTPA), ex
xpanding to 10 MTPA w
with a second
d train.
Figu
ure I-5. Westeern Canada’s LNG
L Export Pipelines and Infrastructure
TransCanada
T a is proposing to build the 470-mil e Prince Ru
upert Gas T
Transmission
n line
with an in
nitial capacitty of 2 Bcfd (expandable
e to 3.6 Bcfd
d) to move M
Montney and
d Horn Rive
er gas
to the Pa
acific Northw
west LNG ex
xport terminal near Prin
nce Rupert, BC. The pllanned in-se
ervice
date is 2018. Earlierr, TransCana
ada was selected by Sh
hell Canada to build the 1.7 Bcfd Co
oastal
GasLink Project, link
king Horn River
R (and Montney)
M ga
as with Shelll’s planned 12 MTPA LNG
export facility near Kitimat estima
ated to be in
n-service “tow d of the deccade”.9
ward the end
June, 2013 I-10

I. Canada EIA/ARI W
2. CORDOVA
C EMBAYME
ENT
2.1 Geologic
G Se
etting
The
T Cordova
a Embayme
ent covers an 4,290 mi2 in the extreme northea
a area of 4 astern
corner off British Collumbia, exte
ending into the
t Northwe
est Territorie
es, Figure I-6. The Corrdova
Embaym
ment is separated from the
t Horn Riv
ver Basin on
n the west b e Point Plattform.
by the Slave
The Emb
bayment’s no
orthern and southern bo
oundaries arre defined by a thinning of the shale
e and
its easte
ern boundary
y is the Briitish Columb
bia and Alb
berta borderr. The dom
minant shale
e gas
formation
n, the Musk
kwa/Otter Pa
ark Shale, was
w mapped 0-mi2 prospe
d to establissh the 2,000 ective
area, Fig
gure I-7.
2.2 Reservoir
R Properties
One
O shale ga
as formation
n, the Muskw
wa/Otter Parrk, is include
ed in the qu
uantitative po
ortion
of our res
source asse
essment.
Muskwa/Otte
M er Park. The
e Middle De
evonian Musskwa/Otter P
Park Shale is the main sshale
gas targe
et in the Corrdova Embay
yment. The
e drilling dep
pth to the top
p of the Musskwa Shale iin the
prospective area ranges from 5,500 to 6,200 feet, a
averaging 6,,000 feet. The reservoir is
ely over-pres
moderate ssured. The
e organic-ric
ch gross thic kness is 230
0 feet, with a net thickne
ess of
207 feett. Total org
ganic content (TOC) in
n the prosp
pective area
a is 2.5% fo
or the net sshale
thickness
s investigate
ed. Therma
al maturity averages
a 2.0
0% Ro, placcing the shale in the dryy gas
window. The Muskwa/Otter Pa
ark Shale ha
as a moderrately high q
quartz conte
ent, favorable for
hydraulic
c stimulation.
Other
O Shales
s. The deep
per Evie/Klua
a Shale, sep m the overlying Muskwa//Otter
parated from
Park by the Slave Point and Sulfur Poin
nt Formation
ns, is thin, Figure I-8. The overlying
Banff/Exs
shaw and Fort Simpson
n shales are shallower, tthin and/or low in organics. These other
shales ha
ave not bee
en included in
i the quanttitative portio ordova Embayment reso
on of the Co ource
assessm
ment.
June, 2013 I-11

I. Canada EIA/ARI W
Figure I-6. Cordova Embayment (M

Muskwa/Otter Parkk Shale) Outline an
nd Figu
ure I-7. Cordova EEmbayment - Musskwa/Otter Park Shale Isopach
Deepth annd Prospective Arrea
S
2
JJune, 2013 I-12

I. Canada EIA/ARI W
Figure I-8.. Cordova Em

mbayment Straatigraphic Column
2.3 Resource
R Assessmen
A nt
The
T prospec
ctive area of
o the Cord
dova Emba
ayment’s Muskwa/Otterr Park Sha
ale is
approxim 0 mi2. With
mately 2,000 hin this pros
spective are
ea, the shale
e has a mo
oderate reso
ource
concentrration of 68 Bcf/mi2 and
d a risked ga
as in-place o
of 81 Tcf. B
Based on favorable rese
ervoir
mineralogy and oth
her propertie
es, we estim
mate a riskked, techniccally recove
erable shale
e gas
resource
e of 20 Tcf fo
or the Muskw
wa/Otter Park Shale in th
he Cordova Embaymentt, Table I-2.
2.4 Comparison
ce Assess
sments
In mid-2010, the Canadian Society of

o Unconven
ntional Gas ((CSUG) estimated 200 T
Tcf of
shale ga
as in-place and
a 30 to 68
6 Tcf of marketable (rrecoverable)) shale gas for the Corrdova
ment.4 In earrly 2012, the
Embaym e BC Ministry
y of Energy reported 20
00 Tcf of gas in-place fo
or the
Cordova Embayment, a number which appe
ears to have been based UG study.4
d on the CSU
June, 2013 I-13

I. Canada EIA/ARI W
2.5 Recent
R Activity
Nexen
N has acquired
a an 82,000-acre
e lease posittion in the C
Cordova Emb
bayment and
d has
wo vertical and two horizontal
drilled tw h sh
hale gas e
exploration w
wells. Nexxen estimattes a
contingent resource of up to 5 Tcf ase position.10 PennWesst Exploratio
T for its lea on and Mitsu
ubishi
have forrmed a jointt venture to
o develop th
he estimated
d 5 to 7 Tccf of recove
erable shale
e gas
resource
es on their 17 se area.11
70,000-acre (gross) leas
June, 2013 I-14

I. Canada EIA/ARI W
3. LIARD
L BAS
SIN
3.1 Geologic
G Se
etting
The
T Liard Ba
asin covers an
a area of 4,300
4 mi2 in northwesterrn British Co
olumbia, Figure I-
9.3 Its eastern borde
er is defined
d by the Bov
vie Fault, w hich separa
ates the Liarrd Basin from
m the
ver Basin, Figure I-8. Its
Horn Riv s northern bo
oundary is ccurrently deffined by the British Colu
umbia
and the Yukon/Nortthwest Terriitories borde
er, and its western an
nd southern boundariess are
defined by
b structural folding and shale depos
sition.
Figurre I-9. Liard Basin

B (Lower Besa
B River Shhale) Outline aand Depth Mapp
Source: Modiffied from Ross and

a Bustin, 2008.
The
T dominan
nt shale gas formation in
n the Liard B
Basin is the Middle Devvonian-age L
Lower
Besa Riv
ver Shale, eq
quivalent to the Muskwa Klua shales iin the Horn River
a/Otter Parkk and Evie/K
Basin. Additional,
A le
ess organica
ally rich and
d less prosp ective shale
es exist in th
he basin’s U
Upper
Devonian
n- and Mississippian-ag
ge shales, su
uch as the M
Middle Besa
a River Shale (Fort Sim
mpson
equivalen
nt) and the Upper Besa
a River Sha
ale (Exshaw ures I-1012 a
w/Banff equivvalent), Figu and I-
11.13 Based on still limited data
a on this sha
ale play, a p
prospective a 300 mi2 has been
area of 3,3
er Besa Rive
mapped for the Lowe er Shale in th
he central po e basin, Figure I-12.3
ortion of the
June, 2013 I-15

I. Canada EIA/ARI W
Figu
ure I-10. Liard
d Basin Locatio
on, Cross-Secction and Prosspective Areaa
Source: Levvson et al., British Columbia Ministry of Energy, Mines, and Petrroleum Resourcees, 2009.
Figure I--11. Liard Bassin Stratigraphhic Cross-Secction
June, 2013 I-16

I. Canada EIA/ARI W
Figure I-112. Liard Basiin (Lower Bessa River Shalee) Isopach andd Prospective Area
Source: Modified
M from Rosss and Bustin, 2006.
3.2 Reservoir
R Properties
P (Prospectiive Area).
The
T Lower Be
esa River orrganic-rich shale
s is the m
main shale g
gas target in
n the Liard B
Basin.
Drilling depths
d to the
e top of the formation in the prosp ective area range from 6,600 to 13
3,000
feet, ave
eraging abou eet. The organic-rich L
ut 10,000 fe Lower Besa
a River secttion has a g
gross
thickness
s of 750 fee
et and a ne
et thickness
s of 600 fee
et. Total orrganic conte
ent (TOC) in
n the
prospective area, loc
cally up to 5%,
5 average
es 3.5% for tthe net shalle interval in
nvestigated. The
thermal maturity
m of the
t prospecttive area is high, with a
an average R
Ro of 3.8%. Because o
of the
high therrmal maturitty, we estim
mate the in-place shale gas has a CO2 content of 13%. The
geology of the Besa River Shale
e is complex and thrusts. The Lower Besa
x with numerrous faults a
hale is quarttz-rich, with episodic inttervals of do
River Sh olomite and more perva
asive interva
als of
clay.
June, 2013 I-17

I. Canada EIA/ARI W
3.3 Resource
R Assessmen
A nt
The
T Liard Ba
asin’s Lowerr Besa Rive
er Shale hass a high ressource conccentration off 319
2
Bcf/mi . Within the prospective
p area
a of 3,300 mi2, the rissked shale g
gas in-place is approxim
mately
526 Tcf. Based on
n favorable reservoir mineralogy
m b
but significant structural complexityy, we
estimate a risked, te
echnically re
ecoverable shale
s gas re
esource of 158 Tcf for the Liard B
Basin,
2.
Table I-2
3.4 Recent
R Activity
Apache
A has a 430,000 acre
a lease po
osition in the
e center of tthe Liard Ba
asin’s prospe
ective
area, esttimating 210
0 Tcf of net gas in-pla
ace and 54 Tcf of reco
overable raw
w gas (48 T
Tcf of
marketab
ble gas). Ap
pache’s D-3
34-K well, drrilled to a ve
ertical depth
h of 12,600 ffeet with a 2
2,900
foot laterral and 6 frrac stages, had a 30-d
day IP of 21
1.3 MMcfd a
and a 12 m
month cumulative
recovery of 3.1 Bcf. The well has a currently EUR of nearrly 18 Bcf.7
y projected E
Nexen
N has acquired a 12
28,000-acre (net) land p
position in th
his basin, asssigning up to 24
Tcf of prospective
p t its lease area.10
recoverable resource to Trranseuro En
nergy Corp.. and
Questerrre Energy Co
orp., two sm
mall Canadian operators,, have comp
pleted three exploration wells
in the Be
esa River and
d Mattson sh
hale/siltstone intervals a
at the Beave d.14
er River Field
June, 2013 I-18

I. Canada EIA/ARI W
4. DOIG
D PHOS
SPHATE SHALE/DEE
EP BASIN
4.1 Geologic
G Se
etting
The
T Doig Pho
osphate Sha
ale is located
d in the Dee
ep Basin of A
Alberta and British Colum
mbia.
The Middle Triassic Doig Phos
sphate Form
mation serve
es as the ba
ase for the more exten
nsive,
nantly siltsto
predomin one and sa
and conten
nt Doig Ressource Playy, Figure I--13. The Doig
Phospha as a prospecctive area off 3,000 mi2 a
ate Formation, a high orrganic-content shale, ha along
the west--central portion of the De
eep Basin.
Fig
gure I-13. Dep
position and Stratigraphy
S off Doig Phosphhate and Monttney/Doig Ressource Plays
Advanced Montney
W Well Completion E
ke
lls La
o thi wan so
n
Fo S Da
w
Halfway
Post-Triassic
Unconformity
Doig
Doig Phosphate
Upper Montney
Montney
Lower Montney
Belloy
R
054.CD
JA F02
Blacck Marine Shale Siltstone, Sands

S Convventional Sands
and Shales
Modified from Tristone Shhale Gas Report Octobeer 2008

JAF028245.PPT
4.2 Reservoir
R Properties
The
T Middle Triassic
T Doiig Phosphatte Shale ha
as a thick ssection of organic-rich sshale
along the
e western edge
e of the
e Deep Basin that form
ms the prosp a, Figure I-14.15,8
pective area
Drilling depth
d to the top of the shale avera
ages 9,250 feet. The o
organic-rich Doig Phosp
phate
Shale’s thickness ra
anges from 130 to 20
00 feet, witth a net thickness of 150 feet in
n the
June, 2013 I-19

I. Canada EIA/ARI W
prospective area. The

T average
e thermal maturity
m (Ro
o of 1.1%) p
places the sshale in the
e wet
gas/cond
densate wind
dow. The to
otal organic content (TO
OC) is mode
erate to high
h, averaging
g 5%.
X-ray difffraction of cores
c taken from the Do
oig Phospha
ate Formatio
on show sig
gnificant leve
els of
quartz with minor to moderate le
evels of clay
y and trace tto minor amo
ounts of pyrrite and dolo
omite,
making the formation
n favorable for
f hydraulic fracturing.
Figuree I-14. Prospeective Area forr the Doig Phoosphate Shalee (Deep Basin))
Modified from Walsh,

W 2006.
June, 2013 I-20

I. Canada EIA/ARI W
4.3 Resource
R Assessmen
A nt
The
T prospecttive area of the Doig Ph
hosphate Sh
hale is estim 00 mi2, limite
mated at 3,00 ed on
the west by the Phanerozoic De
eformation Fault and by the pinch-out of the sha
ales to the n
north,
east and south. Within the pros a, the shale has a mode
spective area erate resourrce concentrration
cf per mi2 off wet gas an
of 67 Bc nd a risked resource in
n-place of 10
01 Tcf. Bassed on favo
orable
mineralogy, we estim
mate a riske
ed, technically recoverab
ble shale ga
as resource of 25 Tcf fo
or the
osphate Sha
Doig Pho ale.
4.4 Comparison
ce Assess
sments
In
n 2006, Wals
sh estimated
d a gas in-p phate Unit off ~70 Tcf.15
place for the Doig Phosp
4.5 Recent
R Activity
The
T Doig Ph
hosphate Sh
hale reservo
oir overlies tthe Montneyy Resource Play. As ssuch,
much of the activity and apprais
sal of the Do
oig Phospha
ate is reportted as part o
of exploratio
on for
the Monttney and Do
oig Resource
e plays. Pe
engrowth En
nergy Corp, a small Can
nadian prod
ducer,
tested the larger Doiig interval with
w a vertica
al well in 201
11 with a rep
ported test rrate of 750 M
Mcfd.
The company plans to
t target the well in 2012.8
e Doig with a horizontal w
June, 2013 I-21

I. Canada EIA/ARI W
5. MONTNEY
M AND
A DOIG
G RESOURCE PLAYS
S (BRITISH
H COLUMBIA)
The
T Deep Ba
asin of Britis
sh Columbia
a contains tthe Montneyy and Doig Resource p
plays.
These arre multi-depo
ositional, Triiassic-age hydrocarbon accumulatio
ons containin
ng large volu
umes
of dry and wet gas in onventional, tight sand a nd shale forrmations.
n-place in co
The
T Canadian National Energy
E Board
d categorize
es the Montn g Resource plays
ney and Doig
as tight gas
g sands. Work
W by the
e BC Oil and Gas Comm
mission, in th
heir “Montney Formation
n Play
as NEBC”,16 shows that only
Area Atla o a very small
s portion
n of the Mon
ntney Resource play con
ntains
oil/conde
ensate, Figure I-15. As such, we ha
ave excluded
d the Montn
ney and Doig
g Resource plays
from the
e shale res
source asse
essment of Canada. (In our pre
evious shalle gas reso
ource
assessm
ment, we speculated thatt a shale-rich
h Montney a
area with hig
gher TOC va
alues may exxist in
BC along the north
hwestern ed
dge of the Deep Basin
n. Howeve
er, because of lack of data
ng this specu
confirmin ulation, we have
h excluded this area
a and resourrce volumes from our cu
urrent
shale oil and gas ass
sessment.)
T put the potential volu

To ume of tightt gas resourrce in the M
Montney and
d Doig Reso
ource
plays of British
B Colum
mbia into perspective, th
he BC MEM reports a ga
as in-place ffor the BC po
ortion
of the Mo
ontney and Doig
D d 200 Tcf resspectively.8
Resourrce plays at 450 Tcf and
6. CANOL
C SHA
ALE
The
T Canol Sh
hale is an em
merging sha
ale play loca ted in the ce
entral Macke
enzie Valleyy near
Norman Wells, North
hwest Territo
ories. To da
ate, only seissmic and a h
handful of ve
ertical wells have
been drilled to explo
ore this sha
ale oil play. Work is u
underway on a multi-ye
ear study byy the
Northwes
st Territories
s Geoscienc
ce Office to better
b define
e this resourcce.
Husky
H Oil, ha
aving spent $376 million at the 20 11 land aucction, has drrilled two ve
ertical
wells on its 300,000
0-net acre le
ease area and is planniing on comp
pleting three 013.17
e wells in 20
nergy Corp, with 470,000-net acres in this reso
MGM En ource play, p
plans to drill one vertica
al well
during th
he current wiinter explora
ation season
n. MGM (witth Shell as its partner) w
withdrew pla
ans to
drill a horizontal well in 2012 to test the prod
ductivity of th ale play. 18 A
he Canol Sha As informatio
on on
pectivity of th
the prosp he Canol Sh
hale is gaine
ed from the a
above wells,, it would be timely to incclude
this shale
e play in the assessmen
nt of Canada
a’s shale gass and oil reso
ources.
June, 2013 I-22

I. Canada EIA/ARI W
Fig
gure I-15. Mon
ntney Trend – Identified Gaas Liquids/Oil Distribution
Source: BC Oil and Gas Commission

C Monntney Formation Play Atlas NEB
BC October 20122.
June, 2013 I-23

I. Canada EIA/ARI W
ALBER
RTA
Alberta
A holds
s a series of
o significantt, organic-ri ch shale ga
as and shalle oil formattions,
including
g: (1) the Ba
anff and Exs
shaw Shale in the Alberrta Basin; (2
2) the Duverrnay Shale in the
East and
d West Shale
e Basin of west-central
w Alberta;
A (3) the Nordegg
g Shale in th
he Deep Bassin of
west-cen
ntral Alberta
a; (4) the Muskwa
M Sha
ale in north
hwest Alberrta; and (5) the shale
e gas
formation
ns of the Co
olorado Grou
up in southe
ern Alberta. (In additio
on, Alberta h
holds the ea
astern
portion of
o the Doig Phosphate
P hale play, discussed pre
Sh eviously.)
The
T study ha
as benefitted
d greatly from
m the in-dep
pth and rigorrous siltstone and shale
e data
in the ERCB/AGS
E report enttitled, “Sum
mmary of A
Alberta’s Sh
hale- and Siltstone-Ho
osted
al”.19 This ERCB/AGS
Hydrocarrbon Resource Potentia E report helpe
ed define the boundarie
es for
the oil, wet
w gas/con
ndensate an
nd dry gas play areas used by th
his study. This report also
provided valuable da
ata on key re
eservoir prop
perties such as porosity and net payy.
To
T maintain consistency
c with the ER
RCB/AGS stu
udy for Alberrta, our stud
dy used the ssame
minimum
m criterion off 0.8% Ro fo
or the volatiile/black oil window. H
However, our study used the
criterion of >1.3% Ro for the dry
y gas windo
ow, compare
ed to the >1
1.35% Ro in
n the ERCB//AGS
study. Our study also expanded on the
e analytical data in ER
RCB/AGS’s report with
h our
dently derive
independ ed estimates
s of prospec
ctive areas a
as well as o
our assignm
ments of presssure
gradients
s, gas-oil ra
atios (as fu
unctions of reservoir p nd temperatture), and other
pressure an
reservoirr properties to each sha
ale play. (T AGS assumed normal rrather than over-
The ERCB/A
pressure
ed gradients in their Albe
erta resourc
ce assessme
ent and linke
ed a constant oil-gas ra
atio to
each thermal maturitty (Ro) value, independe oir pressure and depth.))
ent of reservo
The
T five Albe
erta basins assessed
a by
y this study contain 987
7 Tcf of riskked shale ga
as in-
place, wiith 200 Tcf as
a the risked
d, technically
y recoverabl e shale gass resource, T
Table 1-3. T
These
five basin
ns also conttain 140 billion barrels of
o risked sha
ale oil in-placce, with 7.2 billion barre
els as
d, technically recoverable shale oil resource,
the risked r Ta
able I-4.
June, 2013 I-24

I. Canada EIA/ARI W
Taable I-3. Shale Gas Reservoiir Properties aand Resourcees of Alberta

Alberta Basin East and West Shale Basin Deep Basin NW Albertaa Area Southern Alb
berta Basin
B
Basin/Gross Area 2 2 2
Basic Data
2 2
(28,700 mi ) (50,500 mi ) (26,200 mi ) (33,000 mi
m ) (124,0000 mi )
Shale Formation
S Banff/Exshaw Duvernay North Nordegg Muskwwa Colorado Group
Geologic Age L Mississippian
L. U. Devonian L. Jurassic U. Devonnian Cretaceeous
Depositional Environment Marine Marine Marine Marinee Marinne
2
Prospecctive Area (mi ) 10,500 13,000 7,350 2,900 6,900 4,000 1,5500 12,500 6,600 48,7550
Physical Extent
Organically Rich 65 45 60 70 82 72 6
69 70 112 5233
Thicknesss (ft)
Net 15 41 54 63 37 31 2
29 25 78 1055
Interval 3,900 - 6,200 7,500 - 100,500 10,500 - 13,800 13,8800 - 16,400 5,200 - 8,2000 8,200 - 11,500 11,500 - 14,800 3,300 - 8,200 3,,900 - 8,200 5,000 - 10,000
1
Depth (ftt)
Average 4,800 9,0000 11,880 15,000 6,724 10,168 12,464 6,100 4,602 6,9000
Highlyy Highly Highly Mod. Mod. Mood. Mod. Mod.
Reservoir Pressure Normal Underp ress.
Properties
Reservoir
Overpreess. Overpress. O
Overpress. Overpress. Overpress. Overppress. Overpress. O
Overpress.
% 3.4% 3.4% 11.0% 11.0% 11..0% 3.2% 3.2% 2.4%
%
Thermal Maturity (% Ro) 0.90% 0.90%% 1.15% 1.50% 0.90% 1.15% 1.335% 0.90% 1.10% 0.60%
Clay Con
ntent Medium Low Low Low Low/Med. Low/Med. Low//Med. Low Low Low/MMed.
Gas Phaase Assoc. Gas Assoc. Gas
G Wet Gas Dry Gas Assoc. Gas Wet Gas Dry Gas Assoc. Gas Wet Gas Dry Gas
G
Resource
2
GIP Con
ncentration (Bcf/mi ) 1.2 12.0 47.4 63.8 4.7 19.6 222.1 4.6 34.2 20.99
Risked GIP
G (Tcf) 5.1 109.11 244.1 129.5 16.2 39.2 166.6 29.0 112.7 285..6
Risked Recoverable
R (Tcf) 0.3 13.1 61.0 38.8 1.3 7.8 4
4.1 2.9 28.2 42.88
Taable I-4. Shalee Oil Reservoirr Properties aand Resourcess of Alberta

Albertaa Basin East an
nd West Shale Basin
n Deep Basin NW Alberta Areaa
Basin/Gross Arrea 2 2 2
Basic Data
2
(28,7000 mi ) (50,500 mi ) (26,200 mi ) (33,000 mi )
Shale Formatioon Banff/EExshaw Duvernay North Nordegg
N Muskwa
Geologic Agee L. Missiissippian U. Devonian L. Jurrassic U. Devonian
Depositional Enviro
onment Maarine Marine Marrine Marine
2
Pro
ospective Area (mi ) 10,,500 13,0000 7,350 6,900 4,000 12,500 6,6600
Physical Extent
Organically Rich 6
65 45 60 82 72 70 112
Thickness (ft)
Net 1
15 41 54 37 31 25 7
78
Interval 3,900 - 6,200 7,500 - 10,500 10,500 - 13,8800 5,200 - 8,200 8,200 - 11,500 3,3300 - 8,200 3,900 - 8,200
pth (ft)
Dep
Average 4,8800 9,0000 11,880 6,724 10,168 6,100 4,6602
Highly Highly Mod. Mod. Mod. Mood.
Resservoir Pressure No rmal
Properties
Reservoir
Overpreess. Overpresss. Overpress. Overpress. O

Overpress. Overppress.
Aveerage TOC (wt. %) 3.22% 3.4%% 3.4% 11.0% 11.0% 3.2% 3.2%
Theermal Maturity (% Ro)
R 0.990% 0.90% % 1.15% 0.90% 1.15% 0.90% 1.110%
Clay Content Meddium Loww Low Low/Med. Low/Med. Low Loow
Oil Phase O
Oil Oil Condensatte Oil Condensate Oil Cond ensate
Resource
2
OIP
P Concentration (MM
Mbbl/mi ) 2
2.5 7.1 0.5 5.5 0.4 6.4 0
0.7
Risked OIP (B bbl) 100.5 64.22 2.6 19.0 0.8 40.0 2
2.4
B bbl)
Risked Recoverable (B 0..32 3.855 0.16 0.76 0.03 2.00 0.12
June, 2013 I-25

I. Canada EIA/ARI W
1. BASAL
B BAN
NFF AND EXSHAW
E SHALE/
S AL
LBERTA BA
ASIN
1.1 Geologic
G Se
etting
The
T basal Ba
anff/Exshaw Shale asses
ssed by thiss study is loccated in the southern Allberta
portion of
o the Alberrta Basin, Figure
F I-16.19 The wesstern boundary of this shale depo
osit is
ned by the Deformed Belt and itts northern boundary is defined by the sub
constrain b-crop
erosional edge. Its eastern
e boundary is the Alberta and
d Saskatche
ewan borderr and its southern
y is the U.S. and Canada border. Within
boundary W the larrger 15,360--mi2 area of shale depossition,
the Basa
al Banff/Exsh
haw Shale has
h a prospe of 10,500 mii2 for volatile
ective area o e/black oil, F
Figure
I-17.19 (T
The small dry
d gas and wet gas are
eas were no
ot considere
ed prospective.) The ea
ast to
west cros
ss-section (E
E-E’) for the
e Lower Miss
sissippian an
nd Upper De
evonian Bassal Banff/Exxshaw
Shale shows its strattigraphic equ
uivalence to the Bakken
n Formation in the Willistton Basin, F
Figure
I-18.19
1.2 Reservoir
R Properties
Similar
S to the
e Bakken Sh
hale, the ba
asal Banff/Exxshaw Shale
e consists o
of three rese
ervoir
units. Th
he upper and
d lower units
s are domina
ated by orga
anic-rich sha
ale. The mid
ddle unit con
ntains
a variety
y of lithologies including
g calcareou
us sandstone
e and siltsttone, dolomitic siltstone
e and
limestone
e. The primary reservoir is the more
e porous an d permeable
e middle uniit, sourced b
by the
upper an
nd lower orrganic-rich shales
s units
s. Howeverr, compared
d to the Ba
akken Shale
e, the
prospective area of the
t basal Ba
anff/Exshaw Shale is no
ormally presssured (with higher presssures
est) rather th
in the we han over-pre
essured, and
d its middle unit appearss to have co
onsiderably lower
permeab
bility and solu
ution gas.
In
n the prospe
ective area, the drilling depth
d to the top of the sshale rangess from 3,300
0 feet
on the ea
ast to about 6,600 feet on
o the west, averaging 4
4,800 feet. T
The upper shale unit is 3 to 5
feet thick ower shale unit has a gross thickn
k and the lo ness of 10 to 40 feet, providing a net,
organic-rrich shale pa
ay averaging
g 15 feet.
June, 2013 I-26

I. Canada EIA/ARI W
Figuree I-16. Outlinee and Depth of

o Basal Banff and Exshaw S
Shale (Albertaa)
Source: Modified from ERCB/AGS

E Openn File Report 20 12-06, October 22012.
Figuree I-17. Prospeective Area forr Basal Banff and Exshaw S

Shale (Albertaa).

E Opeen File Report 20012-06, October 2012.
June, 2013 I-27

I. Canada EIA/ARI W
Figure I-188. Stratigraph

hic Cross Secttion E-E’ of thhe Basal Banfff and Exshaw Shale
Sourrce: ERCB/AGS
S Open File Repport 2012-06, Occtober 2012.
The
T total orga he prospectivve area averages 3.2% and rangess from
anic contentt (TOC) in th
lean to nearly
n 17%. The upper and lower shale
s have high TOC values ((3% to 17%), the
units h
middle unit has much lower TOC
C (lean to 3%
%). The the
ermal maturrity (Ro) of th
he shale sho
ows a
sive increase
progress e from immatture (below 0.8% Ro) in the east to d
dry gas (ove
er 1.3% Ro) iin the
west. Ho
owever, in th
he western area
a where the thermal maturity exxceeds 1.0%
% Ro, the sha
ale is
thin and thus has be
een excluded
d from the prospective
p area. As su
uch, the bassal Banff/Exxshaw
as a prospec
Shale ha 00 mi2 (0.8%
ctive area forr oil of 10,50 % to 1.0% Ro) located in the center o
of the
larger pla
ay area.
1.3 Resource
R Assessmen
A nt
The
T prospecttive area for the Basal Banff/Exshaw
B w Shale in th
he Alberta B
Basin is limite
ed by
depth an
nd thermal maturity
m on th
he east and by shale thiickness on tthe west. W
Within the 10
0,500-
mi2 prosp
pective area
a for oil, the basal Banfff/Exshaw Sh
hale has a re
esource con
ncentration o
of 2.5
million ba p mi2 plus
arrels of oil per s moderate volumes
v of a
associated gas.
June, 2013 I-28

I. Canada EIA/ARI W
The
T risked re
esource in-pllace for the oil
o prospectiive area is e
estimated at 10 billion ba
arrels
of oil plu
us 5 Tcf of associated natural gas
s. Based o
on recent w
well performance as we
ell as
reservoirr properties that appear to be less favorable
f tha
an for the B
Bakken Shale in the Williston
Basin, we
w estimate a risked, tec
chnically rec
coverable re
esource of 0
0.3 billion ba
arrels of sha
ale oil
and 0.3 Tcf
T of associated shale gas.
g
1.4 Comparison
C n With Oth
her Resourrce Assess
sments
The
T ERCB/AGS resource
e study, disc
cussed abovve, calculate
ed an unriskked oil in-pla
ace of
26,300 million
m barre
els and an unrisked
u gas in-place o
of 39.8 Tcf for the bassal Banff/Exxshaw
Shale.19 The ERCB/AGS stud
dy did not use depth, net pay or other criteria to defiine a
prospective area and
d did not estimate a riske
ed recovera ble resource
e.
1.5 Recent
R Activity
Considerable
C e leasing occ
curred for th
he basal Ba nff/Exshaw Shale in 20
010, sparking
g this
ale play. Since then, a number of producers, such as Cre
southern Alberta sha escent Point and
O have drilled explorattion wells to test the ressource poten
Murphy Oil, ntial in this sshale oil playy. So
far, of th
he 22 wells with
w reporte
ed production, only three
e wells havve current prroducing rattes of
over 100 B/D; the rem
mainder hav
ve rates of le B/D.
ess than 50 B
Crescent
C Poiint drilled tw
wo exploratio
on wells into
o the Exsha
aw Shale in
n early 2012
2 with
nal wells in the area.20 Murphy
plans to drill addition M Oil h
has assemblled a 150,00
00 net acre lease
area. While
W its early
y exploration hale play hass shown mixxed results, Murphy’s re
n for this sh ecent
#15-21 well
w targeting
g the Exshaw Shale had
d an IP of 3
350 BOPD. Murphy Oil is examining the
use of longer laterals
s, enhanced stimulation and lower ccosts to imprrove the eco
onomic viability of
e play.21
this shale
June, 2013 I-29

I. Canada EIA/ARI W
2. DUVERNAY
D Y SHALE/E
EAST AND WEST SHA
ALE BASIN
N
2.1 Geologic
G Se
etting
The
T East and
d West Shale Basin, cov 50,000 mi2 in
vering an arrea of over 5 n central Alb
berta,
contains the organically rich Duv e, Figure I-1 9.19 The we
vernay Shale estern bound
dary of this sshale
y the Deform
deposit is defined by med Belt, th
he northern boundary byy the Peace
e River Arch
h, the
southern boundary by
b the Leduc
c Shelf, and
d the eastern
n boundary by the Grossmont Carbo
onate
Platform.. Within thiis larger are
ea of shale deposition, the prospe
ective area ffor the Duve
ernay
Shale is 23,450 mi2, primarily in the central and Figure I-20.199
a western portions of this basin, F
The
T Upper and
a Middle Devonian Duvernay
D S
Shale is stra
atigraphic e
equivalent to
o the
Muskwa Shale in no
orthwest Alb
berta and no
ortheast Britiish Columbia. In the E
East Shale B
Basin,
ernay Shale
the Duve e is primarily an organ
nic-rich lime
estone. In the West S
Shale Basin
n, the
Duvernay
y Shale grad
des from a carbonate-riich mudston
ne in the easst to an incrreasingly po
orous,
organic-rrich shale in the west, Fiigure I-21.19
2.2 Reservoir
R Properties
In
n the prospe
ective area, the drilling depth
d to the top of the D
Duvernay Sh
hale ranges from
7,500 fee
et in the eas
st to 16,400 feet in the west.
w The g
gross shale thickness in
n the prospe
ective
area rang
ges from 30
0 feet to over 200 feet, with
w an averrage of 41 n
net feet in th
he oil prospe
ective
area, 54 net feet in the wet gas
s/condensatte prospectivve area, and 63 net fee
et in the dryy gas
prospective area.
The
T total org
ganic carbon
n (TOC) in the
t prospecctive area re
eaches 11%
%. Excluding
g the
organically lean rock using the
e net to gross ratio, the
e average T
TOC is 3.4%
%. The the
ermal
maturity (Ro) of the shale
s increa
ases as the shales deep
pen, from im
mmature (below 0.8% Ro) on
the east to dry gas (1
1.3% to 2% Ro) in the west.
w As succh, the Duve
ernay Shale has an extensive
pective area in the eastt, a wet gas
oil prosp s/condensate
e prospectivve area in th
he center, a
and a
smaller dry
d gas prospective area
a in the westt.
June, 2013 I-30

I. Canada EIA/ARI W
Figure I-19. Outline and Depth of Duveernay Shale (A

Alberta)
Sourcee: Modified from

m ERCB/AGS Oppen File Report 22012-06, Octobeer 2012.
Figure I-20. Prospective Area for Duveernay Shale (A

Alberta)

June, 2013 I-31

I. Canada EIA/ARI W
Figurre I-21. Stratig

graphic Crosss Section B-B’’ of the Duvernnay Formationn
Source: ERCB/AGS
E Openn File Report 2012-06, October 2012.
2.3 Resources
R Assessme
ent
The
T prospecttive area of the Duvernay Shale in the East an
nd West Shale Basin co
overs
m 2, limited on
23,250 mi o the east by mal maturity. Within the 13,000-mi2 prospective area
b low therm
for oil, th
he Duvernay
y Shale has els of oi/mi2 plus
e concentrattion of 7.1 million barre
s a resource
associate
ed gas. Within
W the 7,350-mi2 we
et gas/conde
ensate prosspective area, the Duve
ernay
Shale ha
as resource concentratio
ons of 0.5 million
m barrel s of conden
nsate and 4
47 Bcf of we
et gas
per mi2. Within the 2,900-mi2 dry
d gas pros
spective are
ea, the Duve
ernay Shale
e has a reso
ource
2
concentrration of 64 Bcf/mi
B .
The
T risked resource
r in-place in the prospecctive areas of the Duvvernay Sha
ale is
d at 67 billion barrels of
estimated o shale oil//condensate
e and 483 T
Tcf of shale gas. Base
ed on
favorable
e reservoir properties
p an
nd analog information fro
om U.S. sha
ales such ass the Eagle Ford,
we estim
mate risked
d, technically recovera
able resourrces of 4.0 billion b
barrels of sshale
ensate and 133 Tcf of drry and wet sh
oil/conde hale gas.
June, 2013 I-32

I. Canada EIA/ARI W
2.4 Recent
R Activity
The
T Duverna
ay Shale is the current “hot” shale
e play in We
estern Cana
ada with ove
er $2
billion sp 000 mi2) follo
0 and 2011) in auctions for leases. Athabasca Oil (with 1,0
pent (in 2010 owed
by Canad s (600+ mi2),, EnCana (5
dian Natural Resources 580+ mi2) an
nd Talisman (560+ mi2) have
the dominant land po
ositions. Tw
welve additio
onal compan
nies, ranging
g from Chevvron to Enerrplus,
each hold m 2 of leases
d over 100 mi s.
Much
M of the current
c activ
vity is in the Kaybob we
et gas/conde
ensate area.. EnCana w
with 8
Hz wells plus one vertical
v well and Celtic with
w 7 Hz a
and 5 vertica
al wells are
e the most a
active
operators
s. Since the
e first Celtic well in the Duvernay
D S hale in 2010
0, a total of 45 wells (Hzz and
vertical) have been drilled
d or are being drilled
d (mid-2012
2).
 EnCana reports
r that its y well tested at 2.3 MMccfd of wet ga
i Duvernay as and 1,632
2
barrels pe
er day of con
ndensate.
 Celtic’s be
est Duverna
ay well tested
d at 5.8 Mcfd
d of wet gass plus 638 ba
arrels per da
ay of
condensa
ate.
In
n the Pembin our Hz wellss and ConoccoPhillips with three Hz wells
na area, EnCana with fo
are mostt active. In the Edson Area, where active
a leasin
ng is still und
derway, Angle Energy, C
CNRL
and Verm
million are drrilling Duvern
nay Shale explorations w
wells.
June, 2013 I-33

I. Canada EIA/ARI W
3. NORDEGG
N SHALE/DE
EEP BASIN
N.
3.1 Geologic
G Se
etting.
The
T Nordegg
g Shale asse
essed in this
s study is lo
ocated within
n the Deep Basin of Alb
berta,
22.19 The Lower Jurass
Figure I-2 sic Nordegg Shale Mem
mber is locatted at the ba
ase of the F
Fernie
Formatio
on, shown by 23.19
b the cross-section on Figure I-2 The Nordegg tra
ansitions fro
om a
carbonatte-rich deposition on the
e south into
o a fine-grai ned rock on
n the north. In the norrthern
area, wh
here the sh
hale intervall is sometim
mes referred
d to as the
e Gordonda
ale Memberr, the
Nordegg Shale is an
n organic-ric
ch mudstone
e (shale) wh ich also includes chertyy and phosp
phoric
carbonattes as well as
a siltstones 4.19 The No
s and some sandstone, Figure 1-24 ordegg Shale
e has
served as a prolific source
s rock for
f shallower convention
nal hydrocarrbon reservo
oirs in this po
ortion
of the De
eep Basin.
Figure I-22. Outline and Depth of Norddegg Shale (A

Alberta).
Source: Modified
M from ER
RCB/AGS Open File Report 20122-06, October 2012.
June, 2013 I-34

I. Canada EIA/ARI W
Figure I-23.. Prospectivee Area for Norddegg Shale (A

Alberta)

Figure I-24. Straatigraphic Crosss Section F-FF’ of the Nordegg Member
Source: ERCB/AGS Open Fille Report 2012-006, October 201 2.
June, 2013 I-35

I. Canada EIA/ARI W
3.2 Reservoir
R Properties
In
n the Nordeg
gg Shale pro
ospective arrea, the drill ing depth to
o the top of the shale ra
anges
from 3,3
300 feet in the north-e out 15,000 feet in the south.
east to abo W
Within the ovverall
prospective area of 12,400 mi2, the volatile/black oil prospective area is 6,9
900 mi2, the
e wet
densate pros
gas/cond spective are m 2, and the
ea is 4,000 mi 0 mi2.
e dry gas prrospective area is 1,500
The shalle thickness in the overa
all prospective area ran
nges from 50
0 feet to 150 feet and h
has a
high net to gross ratio of about 0.8.
0
T total organic carbon (TOC) in th

The he prospectiive area is h
high, at over 11%, base
ed on
82 samples from 16 wells. The thermal matturity (Ro) off the shale in
ncreases to the southwe
est in
line with increasing depth.
d The overall Norrdegg Shale prospective
e area has a
an oil prone area
(Ro of 0.8
8% to 1.0%)) on the north, a wet gas
s/condensate
e area in the
e center (Ro of 1.0% to 1
1.3%)
and a drry gas area (Ro >1.3) on
o the south
h. While th
he data are sparse, industry inform
mation
suggests
s that the No
ordegg Shale
e is over-pre
essured.
3.3 Resource
R Assessmen
A nt.
2
Within
W the 6,900-mi
6 oil
o prospecttive area, the Nordeg
gg Shale h
has a reso
ource
els of oil perr mi2 plus asssociated ga
concentrration of 5.6 million barre as. Within the 4,000-mii2 wet
gas and condensate prospective
e area, the Nordegg
N Sha
ale has a re
esource conccentrations o
of 0.4
arrels of oil and 20 Bcff of wet gas per mi2. W
million ba Within the 1,500-mi2 dryy gas prospe
ective
area, the
e Nordegg Shale has a resource con of 22 Bcf/mi2.
ncentration o
Combined,
C th
he risked res
source in-pla
ace for the p
prospective a
area of the N
Nordegg Shale is
estimated
d at 20 billio
on barrels off oil/condens
sate and 72 Tcf of naturral gas. Bassed on mod
derate
reservoirr properties and analog information
n from U.S. shales, we estimate risked, techn
nically
es of 0.8 billion barrels of oil/conde
ensate and 13 Tcf of na
atural gas fo
or the
Nordegg Shale.
June, 2013 I-36

I. Canada EIA/ARI W
3.4 Comparison
ce Assess
sments
The
T ERCB/A
AGS resourc
ce study, dis
scussed abo
ove, calculatted an unrissked mean o
oil in-
place of 40,645 million barrels and
a an unris
sked mean g
gas in-place
e of 164 Tcff for the Norrdegg
Shale.19 The in-plac
ce resource
e values in our study a
are differentt than those
e reported in
n the
GS study du
ERCB/AG ue to the following: (1) given the stilll emerging n
nature of the
e Nordegg S
Shale,
we judge
e this resource area to be only 50
0% de-risked
d; (2) we fin
nd the Nordegg Shale tto be
moderate
ely over-pres
ssured; and (3) we have
e a significan
ntly lower asssociated ga
as-oil ratio fo
or the
volatile/b
black oil pros
spective reso
ource area than used in the ERCB/A
AGS study.
3.5 Recent
R Activity
Only
O a modest number of
o exploration
n wells have
e been comp
pleted in the
e Nordegg S
Shale.
Recently
y, Anglo Can
nadian drille
ed a horizontal test well (Shane 07--11-77-03W
W6) and a ve
ertical
test well (Sturgeon
n Lake 05--10-68-22W5
5) which p
produced n
non-commerccial volume
es of
moderate 2 o API oil. Tallgrass Energy
ely heavy, 25 E has since acquiired Anglo C
Canadian an
nd its
w 272 mi2 in the Nord
large land position, with degg Shale.222 The litera
ature reportss that a com
mpany
active in the Nordegg
g oil fairway has comple
eted one Norrdegg Hz we
ell with a mu
ulti-stage fracc that
d 500 BOED
produced D, with 80% oil (42o API), during its initial flow ttest and com
mpleted a se
econd
well that had a 30-da duction rate of 78 barrelss of 32o API oil.23
ay initial prod
June, 2013 I-37

I. Canada EIA/ARI W
4. MUSKWA
M SHALE/NO
S RTHWEST
T ALBERTA
A
4.1 Geologic
G Se
etting
The
T Muskwa Shale depo
osition in no
orthwest Alb
berta is the northern co
ontinuation o
of the
Duvernay
y Shale in central
c Alberrta and the eastern
e conttinuation of Muskwa/Ottter Park Sha
ale in
northeas ure I-25.19 The
st British Columbia, Figu T bounda
aries of the Muskwa Sh
hale in north
hwest
Alberta are
a the Albe
erta/British Columbia
C bo
order on the
e west, the Alberta/NW
WT border on the
north, the
e Peace Riv
ver Arch on the south, and
a the Gro
osmont Carb
bonate Platfform on the east.
Within th
his larger de
epositional area,
a the Mu
uskwa Shale
e has a prosspective are 0 mi2,
ea of 19,100
primarily in the weste
ern portion of
o the larger Muskwa Sh ale depositio Figure I-26.19
onal area, F
The
T Muskwa
a Shale is overlain
o by the Ft. Sim
mpson Shalle and is d
deposited on
n the
gure I-27.19 The Muskkwa Shale is primarily an organicc-rich
Beaverhiill Lake Formation, Fig
limestone water marine setting.
e deposited in a deep-w
Figure I-25.. Outline and Depth of Musskwa Shale (Alberta).
Source: ERCB/AGS Opeen File Report 2012-06, Octobe r 2012.
June, 2013 I-38

I. Canada EIA/ARI W
Figure I-26. Prospectivee Area for Musskwa Shale (A

Alberta).
Source: ERCB/AGS Opeen File Report 2012-06, Octobe r 2012.
Figu
ure I-27. Stratiigraphic Crosss Section C-C
C’ of the Muskw
wa Formationn
Source: ERCB/AGS
S Open File Repport 2012-06, Occtober 2012.
June, 2013 I-39

I. Canada EIA/ARI W
4.2 Reservoir
R Properties
In
n the prospe
ective area, the drilling depth to the
e top of the Muskwa Sh
hale ranges from
et in the northeast to 8,200 feet in the southw
3,300 fee west. The gross shale tthickness ra
anges
from 33 feet
f to nearly
y 200 feet, with
w a high net to gross p
pay ratio.
The
T total org
ganic conten
nt (TOC) ran
nges from le
ess than 1 tto over 10%
%, with the le
eaner
TOC pay
y excluded by
b the net to
o gross pay ratio. Exclu
uding the lea
an TOC seg
gments, a sa
ample
of 47 TO
OC measurements from 5 wells prov
vided an ave
erage TOC value of 3.2
2%. The the
ermal
maturity (Ro) of the shale
s increas
ses with dep
pth, ranging ffrom immatu
ure (Ro < 0.8
8%) in the ea
ast to
thermally
y mature forr wet gas and condens
sate (Ro of 1
1.0% to 1.2
2%) on the w
west. Base
ed on
thermal maturity,
m the
e Muskwa Shale has an oil-prone arrea with asssociated gass on the easst and
a wet gas
s/condensatte area on th
he northwestt.
4.3 Resources
R Assessme
ent
The
T overall oil
o and gas prospective area of the
e Muskwa S
Shale in nortthwest Albe
erta is
mately 19,100 mi2. Withiin the oil pro
approxim ospective are 0 mi2, the Mu
ea of 12,500 uskwa Shale
e has
a resourc
ce concentra
ation of 6 million
m barrels mi2 plus asssociated gass. Within the
s of oil per m e wet
gas/cond
densate pros m 2, the Mus kwa Shale h
spective area of 6,600 mi has a resourrce concentrration
of 1 millio sate per mi2 and 34 Bcf of wet gas p
on barrels off oil/condens per mi2.
The
T risked re
esource in-p
place is estim
mate at 42 b
billion barrells of oil/cond
densate and
d 142
Tcf of sh
hale gas. Given
G favora
able reservoir propertiess and analog informatio
on from the Horn
River and
d Cordova Embayment
E shales, we estimate a risked, tech
hnically recoverable reso
ource
of 2.1 billion barrels of condensate and 31 Tcf o
o shale oil/c of shale gass.
4.4 Comparison
ce Assess
sments
The
T ERCB/A
AGS resourc
ce study, dis
scussed abo
ove, calculatted an unrissked mean o
oil in-
place of 115,903 milllion barrels and an unriisked mean gas in-place of 413 Tcf for the Muskwa
udy area in NW Alberta
Shale stu a.19 The in--place value
es in our stu
udy are diffferent than tthose
reported in the ERC
CB/AGS stud
dy due to the following: (1) given th
he limited exxploration fo
or the
Muskwa Shale in NW
W Alberta, we
w judge this resource arrea to be only 50% de-risked; (2) we
e find
the Muskwa Shale in this area
a to be mod
derately ove
er-pressured
d; and (3) w
we have a lower
ed gas-oil ra
associate atio for the sh
hale.
June, 2013 I-440

I. Canada EIA/ARI W
4.5 Recent
R Activity
Husky
H Oil Ca
anada, curre
ently the mos
st active exp
plorer in Alb
berta’s Muskkwa Shale, h
has a
concentrrated 400,00
00-net acre land positio
on in the Ra a. Husky drrilled 14 Muskwa
ainbow area
Shale we
ells in 2012,, completing
g 4 wells, wiith the goal of de-risking its large land position
n and
refining itts well comp
pletion practtices. Husky
y is currentlyy looking forr a JV partne
er to help fin
nance
the development of this shale oil play17.
A smaller Canadian E&P

P company, Mooncor
M Oil and Gas, d
drilled a pilott test well intto the
Muskwa Shale in ea
arly 2009 (W
Well #06-34--94-12W6). The Muskw
wa zone wa
as reported to be
ssured and flowed
over-pres f 56o API sate plus wett gas.24
A condens
June, 2013 I-441

I. Canada EIA/ARI W
5. COLORADO
C O GROUP/SOUTHER
RN ALBERT
TA
5.1 Geologic
G Se
etting
The
T Colorado ale covers a massive, 1 24,000-mi2 a
o Group Sha area in soutthern Alberta
a and
southeas
stern Saskattchewan. The
T western boundary o
of the Colorrado Group is the Cana
adian
Rockies Overthrust. The northe
ern and easttern bounda
aries are deffined by sha
allow shale d
depth
and loss of net pay. The southe
ern boundarry is the U.S
S./Canada b
border. The Colorado G
Group
asses a thick, Cretaceou
encompa us-age sequ
uence of san
nds, mudsto
ones and shales. Within
n this
sequence
e are two sh
hale formatio
ons of intere Fish Scale Shale Formattion in the L
est - - the F Lower
Colorado
o Group and the Seco
ond White Speckled
S Sh
hale Formattion in the Upper Colo
orado
Group, Figure
F I-28.25 We selec
cted the 5,0
000 to 10,00
00 foot dep
pth contourss for defining
g the
mi2 prospecttive area, Fig
48,750-m gure I-29.
5.2 Reservoir
R Properties
In
n the prospe
ective area, the depth to
t the Secon
nd White Sp
peckled (2W
WS) and the
e Fish
Scale shales ranges
s from 5,000 feet near Medicine
M Hatt (on the easst) to over 1
10,000 feet iin the
he Fish Scale Shale is generally abo
west. Th out 200 feet deeper than
n the 2WS. The interval from
the top of
o the 2WS to
o the base of
o the Fish Scales
S Shale
e ranges from
m 300 feet in
n the east to
o over
1,000 fee
et in the wes
st, with an average
a gros
ss pay of 52
23 feet. Asssuming a co
onservative n
net to
gross rattio of 20%, we estimate
e a net pay
y of 105 fee
et. Much off the Colora
ado Group S
Shale
appears to be underr-pressured, with a pres
ssure gradie
ent of about 0.3 psi/ft. T
The total org
ganic
TOC) conten
carbon (T nt of the sha
ale ranges frrom 2% to 3
3%. In the p
prospective a
area, the the
ermal
maturity of the shale is low (Ro of 0.5% to 0.6%). H
However, the presence of biogenicc gas
ovided adequ
appears to have pro uate volume
es of gas ge
eneration. T
The rock min
neralogy app
pears
w to moderate in clay (31
to be low 1%) and thus
s favorable ffor hydraulicc fracturing.
5.3 Resource
R Assessmen
A nt
The
T 48,750--mi2 prospective area of the Co lorado Group Shale ccovers mucch of
southwes
stern Albertta. Within this prospective area
a, the shale
e has a re
elatively low
w gas
concentrration of 21 Bcf/mi2. Th
he risked sh
hale gas in--place for th
he Colorado
o Group Sha
ale is
estimated
d at 286 Tcf.
T Based on mode
erately favorrable shale mineralogyy, but otherr less
favorable
p su
uch as low pressure and
d an uncertaiin gas charg
ge, we estim
mate a
risked tec
chnically rec
coverable sh
hale gas reso
ource of 43 T
Tcf for the C
Colorado Gro
oup Shale.
June, 2013 I-442

I. Canada EIA/ARI W
Figuree I-28. Colorado Group

G Stratigraphic Column Figure I-29. C
Colorado Group, P
Prospective Area
Periodd Epoch Central Souuthern

Plaains Plaains
Beelly Belly
Riiver River
W
White Speckled Shale
M
Medicine Hat
Upper
Group
Upper
Group
Seco
ond White Speckled Shale
Cretaceous
B
Barons Ss
Fish Scales Shale
Colorado
Colorado
Lower
Lower
Viking Bow Island

Joli Fou Joli Fou
Basal
Colorado
Mannville Man
nnville
Group Grroup
JAF02061.CDR
S
Source: Leckie, D.A.,, 1994. Source: ARI, 2013.
JJune, 2013 I-43

I. Canada EIA/ARI W
5.4 Comparison
ce Assess
sments
In
n mid-2010, the Canadia
an Society fo
or Unconven
ntional Gas estimated 1
100 Tcf of ga
as in-
place and hale.4
able (recoverrable) shale gas for the Colorado Sh
d 4 to 14 Tcf of marketa
5.5 Recent
R Activity
To
T date, the Colorado Group Shale has seen on
nly limited e
exploration a
and developm
ment,
primarily in the shallo
ower eastern
n portion of the
t play area
a.
June, 2013 I-444

I. Canada EIA/ARI W
6. MONTNEY
M AND
A DOIG
G RESOURCE PLAYS
S (ALBERT
TA)
The
T Deep Ba
asin of Cana
ada also contains the A
Alberta portio
on of the Montney and Doig
Resource
e plays. Th
hese multi-d
depositional Triassic-ag
ge hydrocarrbon accum
mulations co
ontain
massive volumes of dry, wet and
d associated
d gas as welll as oil/condensate.
We
W have exc
cluded the Allberta portion of the Mon
ntney and D
Doig Resourcce Plays from
m our
assessm
ment because
e the reservo
oirs in the Alberta portio
on of the bassin are generally classifie
ed as
tight and conventional sands and because the
t organic--content (TO
OC) of the M
Montney and Doig
e plays is low, averaging
Resource g about 0.8%
%. Essentia
ally all of the
e 170 samples taken fro
om 43
Montney Formation wells have TOC values
s less than 1 e I-30.19 Th
1.5%, Figure he basin ave
erage
alues for TO
cut-off va OC in our stu
udy (for cons
sistency with
h the USGS
S evaluationss of shale oiil and
gas reso
ources) is 2%, with indiividual reserrvoir rock in tervals having to have at least 1.5%
% for
inclusion in net, orga
anic-rich pay
y.
Figurre I-30. Histog

gram of Total Organic
O on (TOC) of 1770 Samples froom the Montnney Formationn.
Carbo
Source: ERCB/AGS Open Fille Report 2012-006, October 201 2.
June, 2013 I-445

I. Canada EIA/ARI W
SASKA
ATCHEW
WAN/MANITOBA
1. WILLISTON
W N BASIN/BA
AKKEN SH
HALE
1.1 Geologic
G Se
etting
The
T Williston
n Basin of Canada
C exte
ends northw
ward from th
he U.S./Can
nada borderr into
southern Saskatchew
wan and southwestern Manitoba an
nd contains the Canadian portion o
of the
Bakken Shale
S play, Figure I-31..26 We estim
mate this ba
asin contains 22 billion barrels of rrisked
shale oil in-place, with
w 1.6 billlion barrels
s as the rissked, techn
nically recovverable shale oil
e. The basin
resource n also conta
ains 16 Tcf of associate
ed shale gass in-place, w
with 2 Tcf a
as the
risked, te
echnically recoverable sh
hale gas res
source, Table
e I-5.
Taable I-5. Shalee Gas and Oil Reservoir Pro

operties and R
Resources of Saskatchewan/Manitoba
Within
W the larrger Bakken Shale depo
ositional area
a, we have d
defined a pro
ospective arrea of
8,700 mi2 where the shale appears to have more favora
able reservo
oir propertiess and where
e past
Bakken Shale drilliing has oc
ccurred. The
T prospe
ective area for the Bakken Shale in
hewan and Manitoba is
Saskatch s bounded on
o the nort h, east and
d west by th
he 30-foot sshale
interval contour
c h by the U.S./Canada bo
and on the south e I-32.27
order, Figure
June, 2013 I-446

I. Canada EIA/ARI W
Figure I-31. Outline

O and Deepth of Willisto
on Basin Bakkken Shale (Saaskatchewan/M
Manitoba)
Source: Moodified from Saskkatchewan Minisstry of Energy Reesources, 2010..
Figure I-32. Prospective

P Arrea for Willisto
on Basin Bakkken Shale (Sasskatchewan/M
Manitoba)
Source: AA
APG Flannery & Kraus, 2006.
June, 2013 I-447

I. Canada EIA/ARI W
For this shale

e play, we have
h expand
ded our crite
eria for estab
blishing the prospective area
for oil to below our general cut-o
off of 0.7% th
hermal matu
urity (Ro) forr two reason
ns. First, mu
uch of
the oil in
n-place in this part of the Bakken Shale
S play iss oil that has migrated ffrom the de
eeper,
more ma en Shale in the center of the Will iston Basin to the sou
ature Bakke uth.28 Secon
nd, a
considera
able portion
n of the suc kken Shale well drilling in Canada has been in
ccessful Bak n this
thermally
y less mature
e area of the
e northern Williston
W Basiin.
1.2 Reservoir
R Properties
Similar
S to the basal Ba
anff/Exshaw Shale, the Late Devo
onian to Early Mississip
ppian
Bakken Shale
S consists of three reservoir units. The u
upper and lo
ower units a
are dominate
ed by
organic-rrich shale. The middlle unit conttains a variiety of litho
ologies inclu
uding calcarreous
sandston
ne and siltsto one, Figure II-33.26 The primary rese
one, dolomittic siltstone and limesto ervoir
is the more porous and permea
able middle unit, source
ed by the u
upper and lo
ower organicc-rich
shales. The
T Bakken Shale is over-pressured
d in much off its prospecctive area.
Figure I-333. Bakken Shale Stratigrapphy (Saskatcheewan)
Source: Saskatchewan Ministry of Ene rgy Resources, 2010.
June, 2013 I-448

I. Canada EIA/ARI W
The
T drilling depth
d to the top of the Bakken Sha
ale in the prrospective a
area ranges from
et on the norrth to about 8,800 feet on
5,500 fee o the south , averaging 6,600 feet in
n the prospe
ective
area. Th
he Bakken Shale
S gross interval ranges from 30
0 to over 60 feet in the prospective area
with an average net pay of about 20 feet, with favora
rable porositty of about 10%. The total
organic content
c (TO
OC) in the prospective
p area averag
ges 11% in the organicc-rich upperr and
kken Shale is prospectiv
lower units. The Bak ve for oil pluss associated
d gas.
1.3 Resource
R Assessmen
A nt
Within
W 700-mi2 pros
the 8,7 spective are
ea for oil and
d associated
d gas, the Bakken Shale
e has
a resource concentrration of 4 million
m els/mi2 for oiil plus mode
barre erate volumes of assocciated
gas.
The
T risked oil resource in
n-place for th
he prospectiive area is e
estimated at 22 billion ba
arrels
plus 16 Tcf of associated natural gas. Based on rrecent well performancce and rese
ervoir
es, we estimate risked, technically
propertie t re
ecoverable rresources of 1.6 billion barrels of oiil and
2 Tcf of associated
a gas.
g
1.4 Recent
R Activity
The
T Bakken Shale
S in Canada is an active
a shale oil play with
h over 2,000
0 producing wells
and abou
ut 75,000 barrels per day
d of oil production, ass of mid-201
11. The va
arious compa
anies
active in the play hav
ve publically
y reported 22
25 million ba bable reservves.29
arrels of provved and prob
June, 2013 I-449

I. Canada EIA/ARI W
EASTE
ERN CAN
NADA
Canada
C has four potential shale gas
s plays - - tthe Utica an
nd Lorraine shales in th
he St.
e Lowlands of the App
Lawrence old Belt of Quebec, the Horton Bluff Shale in
palachian Fo n the
Windsor Basin of no
orthern Nova
a Scotia, an erick Brook Shale in th
nd the Frede he Moncton Sub-
Basin of the Maritime
es Basin in New
N Brunsw
wick. These shale oil an
nd gas forma
ations and basins
n early explo
are in an oration stage
e. Therefore
e, only prelim
minary shale
e resource a
assessmentts are
offered fo
or the Utica
a and Horton
n Bluff shale
es. Insufficiient informattion exists ffor assessing the
Lorraine and Frederick Brook shales.
The
T two asse
essed Eastern Canada shale
s gas ba
asins assesssed by this sstudy contain
n 172
Tcf of risked gas in-p
place, with 34
3 Tcf as the
e risked, tec hnically reco
overable sha
ale gas reso
ource,
Table I-6
6.
Table I--6. Shale Gass Reservoir Properties and R

Resources of Eastern Canaada
Appalacchian Fold Beltt Windsorr
Basin
n/Gross Area
Basic Data
2 2
(33,500 mi ) (650 mi )
Shalee Formation Utica Horton Bluuff
Geo ologic Age O
Ordovician Mississippiian
Depositio
onal Environmeent Marine Marine
2
Prospective Area
A (mi ) 2,900 520
Physical Extent
Organicallyy Rich 1,000 500

Thickness (ftt)
Net 400 300
Interval 4,0000 - 11,000 3,000 - 5,0000
Depth (ft)
Average 8,000 4,000
Reservoir Prressure Mod.. Overpress. Normal
Properties
Reservoir
Average TOCC (wt. %) 2.0% 5.0%

Thermal Matturity (% Ro) 2.00% 2.00%
Clay Contentt Low Unknownn
Gas Phase D Gas
Dry Dry Gas
Resource
2
GIP Concenttration (Bcf/mi ) 133.9 81.7
Risked GIP (Tcf) 155.3 17.0
Risked Recovverable (Tcf) 31.1 3.4
June, 2013 I-50

I. Canada EIA/ARI W
1. APPALACH
A HIAN FOLD
D BELT (QU
UEBEC)/UT
TICA SHAL
LE
1.1 In
ntroduction
n and Geologic Setting
The
T Utica Sh
hale is locatted within th
he St. Lawre
ence Lowlan
nds of the A
Appalachian Fold
Belt in Quebec,
Q Can
nada, Figure
e I-34. The
e Utica is a
an Upper Orrdovician-ag
ge shale, loccated
above th
he conventio
onal Trenton
n-Black Rive
er Formation
n, Figure I-3
35. A second, less deffined,
thicker but lower TOC Lorraine Shale
S overlie
es the Utica . Three ma
ajor faults - - Yamaska, T
Tracy
nd Logan’s Line
Brook an L - - form
m structural boundaries
b a
and partition
ns for the Uttica Shale play in
Quebec.
Figure
F I-34. Utica
U Shale Ou
utline and Prosspective Area (Quebec)
Source:
S ARI, 2013.
June, 2013 I-51

I. Canada EIA/ARI W
Figurre I-35. Utica Shale

S Stratigraaphy (Quebecc)
Source: L. Smith AAPG, AAPG Bulletiin, v. 90, no. 11 (November 2006),

2 pp. 1691–1718
JAF21299.AI
1.2 Reservoir
R Properties
The
T extensiv
ve faulting and thrustting in the Utica Sha
ale introducces conside
erable
exploratio
on and com
mpletion risk
k. The depth to the to
op of the sh
hale in the prospective area
ranges from
f 3,000 to
t over 11,0
000 feet, sh
hallower alo
ong the soutthwestern a
and northwe
estern
boundaries and deeper along th
he eastern boundary.
b T
The Utica S
Shale has a gross intervval of
1,000 fee
et. With a ne
et to gross ratio
r of 40%, the net org
ganic-rich sh
hale is estim
mated at 400
0 feet.
The tota
al organic content
c (TO
OC) ranges from 1.5% to 3%, w
with the high
her TOC va
alues
concentrrated in the Upper Utica
a Shale. Th
he thermal m
maturity of tthe prospecctive area ra
anges
from an Ro of 1.1% to
t 4% and averages
a 2%
%, placing th
he shale prim
marily in the dry gas win
ndow.
Data on quartz
q and clay
c contents
s are not publicly availab
ble.
June, 2013 I-52

I. Canada EIA/ARI W
1.3 Resource
R Assessmen
A nt
The
T prospecttive area of the
t Utica Sh
hale in Queb
bec is estima 0 mi2. Within this
ated at 2,900
prospective area, the
e shale has a gas in-plac ation of 134 Bcf/mi2. Ass such, the rrisked
ce concentra
s in-place is
shale gas s 155 Tcf. Assuming
A low
w clay conte
ent, but conssiderable geo
ologic comp
plexity
within the
e prospectiv
ve area, we estimate
e a risked, techn
nically recove
erable shale
e gas resourrce of
31 Tcf fo
or the Utica Shale.
S
1.4 Comparison
ce Assess
sments
In
n mid-2010, the Canadia
an Society fo
or Unconven es a gas in-place
ntional Gas (CSUG) cite
of 181 Tc
cf (unrisked)) for the Utic
ca Shale in Canada
C with
h 7 to 12 Tcff of marketable (recoverrable)
s resources..30
shale gas
1.5 Exploration
E n Activity
Two
T large op
perators, Tallisman and Forest Oil, p
plus numero
ous smaller companies such
as Ques
sterre, June
ex, Gastem and Molop
po, hold lea
ases in the
e Utica Sha
ales of Que
ebec.
Approxim
mately 25 ex
xploration we
ells have be
een drilled w
with moderatte results. M
Market acce
ess is
provided by the Marritimes and Northeasterrn pipeline a
as well as th
he TransCa
anada Pipeline to
markets in Quebec City and Montreal.
M Currently
C sh ebec is on hold,
hale gas drilling in Que
awaiting further envirronmental sttudies.
June, 2013 I-53

I. Canada EIA/ARI W
2. WINDSOR
W BASIN
B (NO
OVA SCOTIA)/HORTO
ON BLUFF SHALE
2.1 In n and Geologic Setting

ntroduction
The
T Horton Bluff
B Shale is located in
n north-centtral Nova Scotia. It is a Carbonife
erous
(Early Mississippian) shale with
hin the Hortton Group, Figure I-36.. Because the Horton Bluff
ests directly on the pre
Shale re e-Carboniferous igneou
us and mettamorphic b
basement, itt has
experienced high he
eat flow and
d has a hig
gh thermal m
maturity in northern No
ova Scotia. The
Horton Bluff
B Shale ge
eology is complex, conta
aining nume
erous faults.
2.2 Reservoir
R Properties
The
T regional extent of th
he Horton Shale
S play iss only partlyy defined a
as the basin
n and
prospective area bou
undaries are
e highly unce
ertain. A pre 0-mi2 prospe
eliminary outtline and 520 ective
s been estim
area has mated for the
e Horton Blufff Shale playy, Figure I-3
37. The dep
pth of the sha
ale in
the prosp
pective area ranges from
m 3,000 to 5,000 feet. T
The shale intterval is thick with 500 fe
eet of
gross pay and 300 fe
eet of organ
nically rich net pay. The
e TOC is 4%
% to 5% (loca
ally higher). The
thermal maturity
m of the prospecttive area ran % in the south to a Ro off over
nges from a Ro of 1.2%
2.5% in the
t northeas
stern portion of the prosp
pective area
a, placing the
e Horton Blu
uff Shale prim
marily
in the dry
y gas window
w. Data from
m the Kenne
etcook #1, drrilled to test the Horton B
Bluff Shale iin the
Windsor Basin, proviided valuable data on re
eservoir prop
perties.
2.3 Resource
R Assessmen
A nt
T 520-mi2 prospective area of the Horton Blufff Shale in N

The Nova Scotia is in the norrthern
and easttern portions
s of the play
y area. With
hin this prosspective are e has an in-place
ea, the shale
2
resource
e concentration of 82 Bcf/mi
B . Ourr preliminaryy resource e
estimate is 17 Tcf of rrisked
shale gas
s in-place. Given
G the ge
eologic comp
plexity in the
e prospective
e area, we e
estimate a rissked,
technicallly recoverab
ble shale gas resource of
o 3 Tcf for th
he Horton Bluff Shale.
2.4 Recent
R Activity.
Two
T small op
perators, Tria orent Energyy, have acquired leasess and
angle Petrolleum and Fo
have beg
gun to explore the Horton Bluff Shale
e.
June, 2013 I-54

I. Canada EIA/ARI W
Figure I-36. Horto

on and Frederick Brook Shale (Horrton Group) Figure I-37. Outlin
ne and Prospectivve Area for Hortonn Bluff Shale (Novva Scotia)
Stratigrap
phy
Souurce: ARI, 2013.
Source: Mukhopadhyay, 2009 JAFF21298.AI
JJune, 2013 I-55

I. Canada EIA/ARI W
3. MONCTON
M SUB-BASIIN (NEW BRUNSWIC
B CK)/FREDE
ERICK BRO
OOK SHAL
LE
The
T Frederick Brook Sha
ale is located in the Mo ncton Sub-B
Basin of the larger Marittimes
Basin off New Bruns
swick, Figure I-38. his Mississip
Th ppian-age sshale is corrrelative with
h the
Horton Group
G in Nov
va Scotia. The Moncton Sub-Basin is bounded on the east by the Caled
donia
Uplift, on
n the west by
y the Kingsto nd on the no rth by the W
on Uplift, an Westmoreland Uplift, Figure I-
39. Beca
ause of limitted data, the
e definition of
o the prospe
ective area o
of the Frede
erick Brook S
Shale
has yet to
t be establiished.
Figure I-38. Lo
ocation of Mon
ncton Sub-Bassin and Maritimes Basin
MA
ARITIMES
Moncton
M
Su
ub-Basin
Source: Geological Survey off Canada, 2009 CSPG

G CSEG CWLS Convvention, Canada JAF21297..AI
The
T Frederic
ck Brook Sh
hale in the Moncton S
Sub-Basin iss structurallly complex, with
extensive nd deformation. Its dep
e faulting an pth ranges ffrom about 3,000 feet a
along the ba
asin’s
eastern edges
e to 15,000 feet in the north. The total orrganic conte
ent of the shale varies w
widely
(1% to 10%), but typically
t ran
nges from 3%
3 to 5%. No publicc data are a
available on
n the
mineralogy of the sh
hale. The th
hermal matu
urity ranges ffrom immatu
ure Ro < 1%
% in the shallower
portions of the basin
n to highly mature
m (Ro > 2%) in the
e deeper we
estern and ssouthern are
eas of
the basin
n.
June, 2013 I-56

I. Canada EIA/ARI W
Much
M of the data for this
s preliminary
y assessme
ent of the Frrederick Bro
ook Shale is from
the McC
Cully gas fie
eld along the southwes
stern edge o
of the Monccton Sub-Ba
asin and fro
om a
handful of
o vertical ex
xploration we
ells. Other areas,
a such as the Coca
agne Sub-Basin, Figure I-39,
may also
o be prospec
ctive for the Frederick
F Brrook Shale b
but have yet to be explored or assesssed.
Figure I-339. Structural Controls for Moncton

M Sub--Basin (New B
Brunswick) Caanada
Source: P.K.
P Mukhopadhyay, Seaarch and Discovery Articcle #10167 (2008) JAF21296.A
AI
REFERE
ENCES
1 Gas Shalee Potential of Devonian Strata, Northeastern

N Brittish Columbia, P
Petroleum Geology Special Papeer 2005-1.
2Shale Unitts of the Horn River Formation, Horn Embayment, Norrtheastern British Columbia,
H River Basinn and Cordova E
Petroleum Geology
G Open File 2008-1.
3Ross, D.J.K., and Bustin, R.M.,
R “Characterizing the shale gas resource pootential of Devonnian–Mississippian strata in the
Western Caanada sedimentaary basin: Appliccation of an integgrated formation evaluation”, AA
APG Bulletin, v. 992, no. 1 (January
2008), pp. 87–125
8
4 “An Overview of Canada’ss Natural Gas Reesources”, Canaadian Society forr Unconventionaal Gas (CSUG) M
May 2010.
5Ultimate Potential
P for Uncoonventional Natuural Gas in Northheastern British Columbia’s Horrn River Basin”, B
British Columbiaa
Ministry of Energy
E and Minees, National Energy Board, Oil and Gas Reportss 2011-1 - May 22011
6 “Hydrocarbbon and By-Prodduct Reserves inn British Columbbia”, BC Oil and G
Gas Commissioon, 2010
June, 2013 I-57

I. Canada EIA/ARI W
7 Apache Invvestor Day Pressentation, June 2012.

2
8“Summaryy of Shale Gas Activity
A in Northeaast British Colum
mbia 2011”, Briti sh Columbia Ministry of Energy and Mines, Oil aand
Gas Divisionn, Geoscience and
a Strategic inittiatives Branch, Oil
O and Gas Repport 2012-1.
9 TransCanaada Corporate Presentation,
P 20113.
10 Nexen Invvestor Day Presentation, North East
E British Coluumbia, 2011.
11 PennWesst Exploration Jaanuary Update (22013)
12 Levson ett al., British Coluumbia Ministry off Energy, Mines,, and Petroleum Resources, 20009
D.W. Morrrow and R. Shinnduke, “Liard Basin, Northeast British
13 B Columbia: An Exploration Frontier,” Geoloogical Survey of
Canada (Caalgary), Natural Resources
R Canaada.
14 Transeuroo Energy, Annuaal General meetiing 3rd October 2012,
2 Oslo, Norw
way.
15Walsh, W.,
W Adams, C. et al, “Regional ‘Shhale Gas’ Potenttial of the Triasssic Doig and Monntney Formations, Northeastern British
Columbia”, British Columbiaa Ministry of Eneergy and Mines, Oil and Gas Divvision, Resource Development aand Geoscience
Branch, Pettroleum Geologyy Open File 20066-02.
16 BC Oil annd Gas Commisssion Montney Foormation Play Atlas NEBC Octobber 2012.
17 Husky Ennergy, Investor Day
D Presentationn, December 4, 2012.
2
18 MGM Eneergy Corp., Pressentation, Peterss & Co. 2012 Eneergy Conferencee, September 133, 2012.
19Rokosh, C.D.,
C Lyster, S., Anderson, S.D.A A., Beaton, A.P., Berhane, H., B Brazzoni, T., Cheen, D., Cheng, Y
Y., Mack, T., Panna, C.
and Pawlow
wicz, J.G. (2012): Summary of Alberta's shale- and siltstone-hossted hydrocarbonn resource potenntial; Energy
Resources Conservation
C Booard, ERCB/AGSS Open File Repport 2012-06.
20 Crescent Point Corporatee Presentation, December
D 2012.
21 Murphy Oil
O Corp, Annual Meeting of Sharreholders, May 2012.
2
22 Tallgrass Energy web sitee www.tallgrasseenergylp.com/
23 “Emergingg Nordegg Oil Play”, www.investtorvillage.com accessed 1/31/20013.
24 Mooncor Oil and gas Corp Press Releasee, February, 2011.
25 Leckie, D.A., (1994): Crettaceous Colorad
do/Alberta Groupp of the Westernn Canada Sedimentary Basin; in Geological Atlas of
the Westernn Canada Sedim mentary Basin, J.P. Bhattacharyaa, J. Bloch, C.F. Gilboy and B. N
Norris, Canadian Society of Petrooleum
Geologists and
a Alberta Research Council, URLU <http://www w.ags.gov.ab.ca//publications/wcssb_atlas/atlas.httml>
26 “Prospectt Saskatchewan, The Bakken Reevisited”, Saskattchewan Ministryy of Energy Ressources, Issue No. 6, January 20010.
Flannery, J. and Kraus, J., Integrated Anaalysis of the Bakkken Petroleum S
27 System: US Willliston Basin, posster presentationn, at
AAPG Annuual Convention, Houston,
H Texas, April 10-12, 2006.
National Energy
28 E Board Caanada, Energy Briefing
B Note “Tight Oil Developpments in the Weestern Canadiann Sedimentary B
Basin”,
December 2011.
2
29 Saskatcheewan Ministry off Energy and Reesources
30 Dawson, F. M., “Unconveentional Gas in Canada,
C Opportuunities and Challlenges”, Canadiaan Society for U
Unconventional G
Gas,
Service Secctor Workshop, June
J 22, 2010.
June, 2013 I-58

II. Mexico EIA/ARI World Shale Gas and Shale Oil Resource Assessment
II. MEXICO
SUMMARY
Mexico has excellent potential for developing its shale gas and oil resources stored in
marine-deposited, source-rock shales distributed along the onshore Gulf of Mexico region.
Figure II-1. Onshore Shale Gas and Shale Oil Basins of Eastern Mexico’s Gulf of Mexico Basins.
Source: ARI, 2013.
June, 2013 II-1

Technically recoverable shale resources, estimated at 545 Tcf of natural gas and 13.1
billion barrels of oil and condensate, are potentially larger than the country’s proven
conventional reserves, Table II-1. The best documented play is the Eagle Ford Shale of the
Burgos Basin, where oil- and gas-prone windows extending south from Texas into northern
Mexico have an estimated 343 Tcf and 6.3 billion barrels of risked, technically recoverable shale
gas and shale oil resource potential, Table II-2.
Further to the south and east within Mexico, the shale geology of the onshore Gulf of
Mexico Basin becomes structurally more complex and the shale development potential is less
certain. The Sabinas Basin has an estimated 124 Tcf of risked, technically recoverable shale
gas resources within the Eagle Ford and La Casita shales, but the basin is faulted and folded.
The structurally more favorable Tampico, Tuxpan, and Veracruz basins add another 28 Tcf and
6.8 billion barrels of risked, technically recoverable shale gas and shale oil potential from
Cretaceous and Jurassic marine shales. These shales are prolific source rocks for Mexico’s
conventional onshore and offshore fields in this area. Shale drilling has not yet occurred in
these southern basins.
PEMEX envisions commercial shale gas production being initiated in 2015 and
increasing to around 2 Bcfd by 2025, with the company potentially investing $1 billion to drill 750
wells. However, PEMEX’s initial shale exploration wells have been costly ($20 to $25 million
per well) and have provided only modest initial gas flow rates (~3 million ft3/d per well with steep
decline). Mexico’s potential development of its shale gas and shale oil resources could be
constrained by several factors, including potential limits on upstream investment, the nascent
capabilities of the local shale service sector, and public security concerns in many shale areas.
June, 2013 II-2

Table II-1. Shale Gas Reservoir Properties and Resources of Mexico

Burgos Sabinas
Basin/Gross Area 2 2
Basic Data
(24,200 mi ) (35,700 mi )
Shale Formation Eagle Ford Shale Tithonian Shales Eagle Ford Shale Tithonian La Casita
Geologic Age M. - U. Cretaceous U. Jurassic M. - U. Cretaceous U. Jurassic
Depositional Environment Marine Marine Marine Marine
2
Prospective Area (mi ) 600 10,000 6,700 6,700 9,500 9,500
Physical Extent
Organically Rich 200 200 300 500 500 800

Thickness (ft)
Net 160 160 210 200 400 240
Interval 3,300 - 4,000 4,000 - 16,400 6,500 - 16,400 7,500 - 16,400 5,000 - 12,500 9,800 - 13,100
Depth (ft)
Average 3,500 7,500 10,500 11,500 9,000 11,500
Reservoir Pressure Highly Overpress. Underpress. Underpress.
Properties
Reservoir

Average TOC (wt. %) 5.0% 5.0% 5.0% 3.0% 4.0% 2.0%
Thermal Maturity (% Ro) 0.85% 1.15% 1.60% 1.70% 1.50% 2.50%
Clay Content Low Low Low Low Low Low
Gas Phase Assoc. Gas Wet Gas Dry Gas Dry Gas Dry Gas Dry Gas
Resource
2
GIP Concentration (Bcf/mi ) 21.7 74.4 190.9 100.3 131.9 69.1
Risked GIP (Tcf) 7.8 446.4 767.5 201.6 501.0 118.1
Risked Recoverable (Tcf) 0.9 111.6 230.2 50.4 100.2 23.6
Tampico Tuxpan Veracruz

Basin/Gross Area
Basic Data
2 2 2
(26,900 mi ) (2,810 mi ) (9,030 mi )
Shale Formation Pimienta Tamaulipas Pimienta Maltrata
Geologic Age Jurassic L. - M. Cretaceous Jurassic U. Cretaceous
2
Prospective Area (mi ) 9,000 3,050 1,550 1,000 1,000 560 400
Physical Extent

Thickness (ft)
Net 200 200 200 210 200 150 150
Interval 3,300 - 8,500 4,000 - 8,500 7,000 - 9,000 6,000 - 9,500 6,600 - 10,000 9,800 - 12,000 10,000 - 12,500
Depth (ft)
Average 5,500 6,200 8,000 7,900 8,500 11,000 11,500
Reservoir Pressure Normal Normal Normal Normal Normal Normal Normal
Properties
Reservoir
Average TOC (wt. %) 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Thermal Maturity (% Ro) 0.85% 1.15% 1.40% 0.85% 0.90% 0.85% 1.40%
Clay Content Low Low Low Low Low Low/Medium Low/Medium
Gas Phase Assoc. Gas Wet Gas Dry Gas Assoc. Gas Assoc. Gas Assoc. Gas Dry Gas
Resource
2
GIP Concentration (Bcf/mi ) 18.6 44.7 83.0 25.5 27.2 22.4 70.0
Risked GIP (Tcf) 58.5 47.7 45.0 8.9 9.5 6.6 14.7
Risked Recoverable (Tcf) 4.7 9.5 9.0 0.7 0.8 0.5 2.9
June, 2013 II-3

Table II-2. Shale Oil Reservoir Properties and Resources of Mexico

Burgos Tampico Tuxpan Veracruz
Basic Data
2
(24,200 mi ) (26,900 mi ) (2,810 mi ) (9,030 mi )
Shale Formation Eagle Ford Shale Pimienta Tamaulipas Pimienta Maltrata
Geologic Age M. - U. Cretaceous Jurassic L. - M. Cretaceous Jurassic U. Cretaceous
Depositional Environment Marine Marine Marine Marine Marine
2
Prospective Area (mi ) 600 10,000 9,000 3,050 1,000 1,000 560
Physical Extent

Thickness (ft)
Net 160 160 200 200 210 200 150
Interval 3,300 - 4,000 4,000 - 16,400 3,300 - 8,500 4,000 - 8,500 6,000 - 9,500 6,600 - 10,000 9,800 - 12,000
Depth (ft)
Average 3,500 7,500 5,500 6,200 7,900 8,500 11,000
Reservoir Pressure Highly Overpress. Highly Overpress. Normal Normal Normal Normal Normal
Properties
Reservoir
Average TOC (wt. %) 5.0% 5.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Thermal Maturity (% Ro) 0.85% 1.15% 0.85% 1.15% 0.85% 0.90% 0.85%
Clay Content Low Low Low Low Low Low Low/Medium
Oil Phase Oil Condensate Oil Condensate Oil Oil Oil
Resource
2
OIP Concentration (MMbbl/mi ) 43.9 15.0 37.9 17.3 36.4 33.0 23.5
Risked OIP (B bbl) 15.8 89.8 119.4 18.5 12.7 11.5 6.9
Risked Recoverable (B bbl) 0.95 5.39 4.78 0.74 0.51 0.46 0.28
INTRODUCTION
Mexico has large, geologically prospective shale gas and shale oil resources in the
northeastern part of the country within the onshore portion of the greater Gulf of Mexico Basin,
Figure II-1. These thick, organic-rich shales of marine origin correlate with productive Jurassic
and Cretaceous shale deposits in the southern United States, notably the Eagle Ford and
Haynesville shales, Figure II-2.1 To date, Mexico’s national oil company PEMEX has drilled at
least six shale gas/oil exploration wells with modest results. The company plans to accelerate
shale activity during the next few years, budgeting 6.8 billion pesos (575 million USD) in 2014.
Whereas Mexico’s marine-deposited shales appear to have good rock quality, the
geologic structure of its sedimentary basins often is considerably more complex than in the
USA. Compared with the broad and gently dipping shale belts of Texas and Louisiana,
Mexico’s coastal shale zone is narrower, less continuous and structurally more disrupted.
Regional compression and thrust faulting related to the formation of the Sierra Madre Ranges
have squeezed Mexico’s coastal plain, creating a series of discontinuous sub-basins.2 Many of
Mexico’s largest conventional oil and gas fields also occur in this area, producing from
conventional sandstone reservoirs of Miocene and Pliocene age that were sourced by deep,
organic-rich and thermally mature Jurassic and Cretaceous-age shales. These deep source
rocks are the principal targets for shale gas/oil exploration in Mexico.
June, 2013 II-4

Figure II-2. Cross-Section of Shale Targets in Eastern Mexico.
Source: Escalera Alcocer, 2012.
Improved geologic data coverage collected since ARI’s initial 2011 estimate indicates
that Mexico’s prospective areas for shale gas -- particularly in the structurally more complex
basins – are slightly smaller than previously mapped. Furthermore, several of the previously
mapped dry gas areas are now known to be within the wet gas to oil thermal maturity windows.
On the other hand, geologic risk factors have been reduced due to the demonstration of the
presence of productive hydrocarbons and improved geologic control. On an overall energy-
equivalent basis, our updated estimate of Mexico’s shale resources is about 10% lower than our
earlier 2011 estimate (624 Tcfe in this study vs 681 Tcf previously).
PEMEX has identified some 200 shale gas resource opportunities in five geologic
provinces in eastern Mexico, Figure II-3. According to the company, prospective regions
include 1) Paleozoic shale gas in Chihuahua region; 2) Cretaceous shale gas in the Sabinas-
Burro-Picachos region; 3) Cretaceous shale gas in the Burgos Basin; 4) Jurassic shale gas in
Tampico-Misantla; and 5) unspecified shale gas potential in Veracruz.
June, 2013 II-5

Figure II-3. PEMEX Map Identifying Mexico’s Shale Gas Potential (November 2012)
Source: PEMEX, 2012b.
PEMEX’s initial internal evaluation estimated 150 Tcf (P90) to 459 Tcf (P10) of
recoverable shale gas resources, with a median estimate of 297 Tcf. In 2012 PEMEX updated
its shale gas and shale oil resource assessment to 141.5 Tcf of shale gas (comprising 104.7 Tcf
dry and 36.8 Tcf wet) and 31.9 billion barrels of shale oil and condensate.
Initial shale gas and shale oil exploration began in Mexico in late 2011. PEMEX has
drilled at least six wells in the Eagle Ford Shale play in northern Mexico to date, but the
southern shale basins have not yet been tested. Despite some areas with favorable shale
geology, Mexico faces significant obstacles to shale development. The country’s upstream oil
industry is largely closed to foreign investment. None of the shale-discovering independent
E&P’s, which unlocked the North American shale plays, are active in Mexico. And, well services
for shale development are costlier than in the U.S. and Canada.
June, 2013 II-6

Onshore eastern Mexico contains a series of medium-sized basins and structural highs
(platforms) within the larger western Gulf of Mexico Basin.3 These structural features contain
organic-rich marine shales of Jurassic and Cretaceous age that appear to be the most
prospective for shale gas and oil development. The arcuate coastal shale belt includes the
Burgos, Sabinas, Tampico, Tuxpan Platform, and Veracruz basins and uplifts. Because
detailed geologic maps of these areas generally are not readily available, ARI constructed the
general pattern of shale depth and thickness from a wide range of published local-scale maps
and structural cross-sections.
Many of Mexico’s shale basins are too deep in their center for shale gas and shale oil
development (>5 km), while their western portions tend to be overthrusted and structurally
complex. However, the less deformed eastern portions of these basins and adjacent shallower
platforms are structurally more simple. Here, the most prospective areas for shale gas and
shale oil development are buried at suitable depths of 1 km to 5 km over large areas.
Pyrolysis geochemistry, carbon isotope studies, and biomarker analysis of oil and gas
fields identify three major Mesozoic hydrocarbon source rocks in Mexico’s Gulf Coast Basin: the
Upper Cretaceous (Turonian to Santorian), Lower-Mid Cretaceous (Albian-Cenomanian), and --
most importantly – Upper Jurassic (Tithonian), the latter having sourced an estimated 80% of
the conventional oil and gas discovered in this region.4 These targets, particularly the Tithonian,
also appear to have the greatest potential for shale gas development, Figure II-4.
The following sections discuss the shale gas and shale oil geology of the individual sub-
basins and platforms along eastern Mexico’s onshore Gulf of Mexico Basin. The basins
discussed start in northern Mexico near the Texas border moving to the south and southeastern
regions close to the Yucatan Peninsula.
June, 2013 II-7

Figure II-4. Stratigraphy of Jurassic and Cretaceous rocks in the Gulf of Mexico Basin, Mexico and USA.
Shale gas targets are highlighted.
Modified from Salvador and Quezada-Muneton, 1989.
June, 2013 II-8

1. BURGOS BASIN (Eagle Ford and Tithonian Shales)
1.1 Geologic Setting
Located in northeastern Mexico’s Coahuila state, directly south of the Rio Grande River,
the Burgos Basin covers an onshore area of approximately 24,200 mi2, excluding its extension
onto the continental shelf of the Gulf of Mexico, Figure II-5. The Burgos Basin is the southern
extension of the Maverick Basin in Texas, the latter hosting the productive Eagle Ford and
Pearsall shale plays.
The Burgos Basin expanded during the Early Jurassic and developed into a restricted
carbonate platform, with thick salt accumulations that later formed a regional structural
detachment as well as isolated diapirs. Structural deformation took place during the late
Cretaceous Laramide Orogeny, resulting in some degree of faulting and tilting within the Burgos
Basin. However, this tectonic event was focused more on the Sabinas Basin and Sierra Madre
Oriental, while the Burgos remains structurally relatively simple and favorable for shale
development.5 Thick Tertiary-age clastic non-marine deposits overlie the Jurassic and
Carbonate marine sequences, reflecting later alternating transgressions and regressions of sea
level in northeastern Mexico.6
The two most prospective shale targets in Mexico are present in the Burgos Basin: the
Cretaceous (mainly Turonian) Eagle Ford Shale play and the Jurassic (mainly Tithonian) La
Casita and Pimienta formations, Figure II-6. The Eagle Ford Shale in Mexico is the direct
extension of its commercially productive Texas equivalent, whereas the La Casita and Pimienta
formations correlate with the productive Haynesville Shale of the East Texas Basin. The La
Casita is believed to be the main source rock for conventional Tertiary clastic reservoirs
(Oligocene Frio and Vicksburg) in the southeastern Burgos Basin, with oil transported via deep-
seated normal faults.7
1.2 Reservoir Properties (Prospective Area)
Eagle Ford Shale. Based on analogy with the Eagle Ford Shale in Texas, industry and
ARI considers the Eagle Ford Shale in the Burgos Basin to be Mexico’s top-ranked shale
prospect. The Eagle Ford Shale is continuous across the western margin of the Burgos Basin,
where the overall formation interval ranges from 100 to 300 m thick (average 200 m).8
Recognizing the sparse regional depth and thickness control on the Eagle Ford Shale in the
June, 2013 II-9

Burgos Basin,9 we relied on a recent PEMEX shale map to estimate a prospective area of
17,300 mi2, slightly less than our previous estimate of 18,100 mi2, comprising three distinct
areas where the shale lies within the 1 km to 5 km depth window, Figure II-5. The eastern
onshore portion of the Burgos Basin is excluded as the shale is deeper than 5 km.
Figure II-5. Burgos Basin Outline and Shale Gas and Shale Oil Prospective Areas.
Source: ARI, 2013.
June, 2013 II-10

Figure II-6. Stratigraphic Cross-Section Along the Western Margin of the Burgos Basin.
Section is flattened on top Cretaceous.
The Eagle Ford Shale (EF) here ranges from about 100 to 300 m thick (average 200 m).
A A’
Modified from Horbury et al., 2003.
Net organically-rich shale thickness within the prospective area ranges from 200 to 300
ft. Total organic content (TOC) is estimated to average 5%. Vitrinite reflectance (Ro) ranges
from 0.85% to 1.6% depending on depth. Over-pressured reservoir conditions are common in
this basin and a pressure gradient of 0.65 psi/ft was assumed. The surface temperature in this
region averages approximately 20°C, while the geothermal gradient typically is 23°C/km.
Porosity is not known but assumed to be comparable to the Texas Eagle Ford Shale play at
about 10%.
La Casita and Pimienta (Tithonian) Shales. Several thousand feet deeper than the
Eagle Ford Shale, the La Casita and Pimienta shales (Upper Jurassic Tithonian) are considered
the principal source rocks in the western Burgos Basin. Extrapolating from the structure of the
younger Eagle Ford, the average depth of the Tithonian Shale is 11,500 ft, with a prospective
range of 5,000 to 16,400 ft. Gross formation thicknesses can be up to 1,400 ft, with an
organically rich net pay of about 200 ft. TOC of 2.6% to 4.0%, averaging 3.0%, consists mainly
of Type II kerogen that appears to be entirely within the dry gas window (1.30% Ro) with little to
no liquids potential.10 Reservoir pressure and temperature conditions are similar to those in the
Eagle Ford Shale play.
June, 2013 II-11

1.3 Resource Assessment
Eagle Ford Shale. Within its 17,300-mi2 prospective area, the Eagle Ford Shale
exhibits a high resource concentration of up to 191 Bcf/mi2. Risked shale gas in-place (OGIP)
totals 1,222 Tcf with risked shale oil in-place (OOIP) of 106 billion barrels. Risked, technically
recoverable resources are estimated to be 343 Tcf of shale gas and 6.3 billion barrels of shale
oil and condensate.
Tithonian Shale. Within the high-graded prospective area of 6,700 mi2, the Tithonian
La Casita and Pimienta shales are estimated to have approximately 50 Tcf of risked, technically
recoverable dry gas resources from 202 Tcf of risked gas in-place. Resource concentration is
about 100 Bcf/mi2.
1.4 Recent Activity
PEMEX initiated conventional exploration in the Burgos Basin in 1942, discovering some
227 mostly natural gas fields in this basin to date. Currently, there are about 3,500 active
natural gas wells producing in the Burgos Basin. These conventional reservoirs typically have
low permeability with rapidly declining gas production. Due to restrictions on upstream oil and
gas investment in Mexico, PEMEX is the only company that has conducted shale exploration
activity in the Burgos Basin to date.
PEMEX made its first shale discovery in the Burgos Basin during late 2010 and early
2011, drilling the Emergente-1 shale gas well located a few kilometers south at the
Texas/Coahuila border on a continuation of the Eagle Ford Shale trend from Texas. This initial
horizontal well was drilled to a vertical depth of about 2,500 m and employed a 2,550-m lateral
(although another source reported 1,364-m). Following a 17-stage fracture stimulation, the $20-
25 million well tested at a modest initial rate of 2.8 million ft3/day (time interval not reported),
which would not be economic at current gas prices.11
As of its last report (November 2012), PEMEX had drilled four shale gas exploration
wells in the Eagle Ford play of the Burgos Basin with one shale exploration well in the Sabinas
basin, reporting initial production for three wells. These wells include the Nómada-1 well
situated in the oil window, the Habano-1 well (IP 2.771 million ft3/day gas with 27 bbl/day crude)
and the Montañés-1 well in the wet gas window of the Burgos Basin. The dry gas window in the
Burgos Basin was tested by the Emergente-1. The Percutor-1 (IP 2.17 million ft3/day) tested the
June, 2013 II-12

dry gas window in the Sabinas Basin. PEMEX has announced also drilled and produced gas
from the Arbolero-1 well (3.2 million ft3/day), the first test of the Jurassic shale in this basin.12
PEMEX plans to drill up to 75 shale exploration wells in the Burgos Basin through 2015.
2. SABINAS BASIN (Eagle Ford and Tithonian Shales)
The Sabinas is one of Mexico’s largest onshore marine shale basins, extending over a
total area of 35,700 mi2 in the northeast part of the country, Figure II-7. The basin initially
expanded during Jurassic time with a northeast-southwest trending structural fabric and was
later strongly affected by the Late Cretaceous Laramide Orogeny. Structurally complex, the
Sabinas Basin has been deformed into a series of tight, NW-SE trending, evaporate-cored folds
of Laramide origin called the Sabinas Foldbelt. Dissolution of Lower Jurassic salt during early
Tertiary time introduced a further overprint of complex salt-withdrawal tectonics.13 Much of the
Sabinas Basin is too structurally deformed for shale gas development, but a small area on the
northeast side of the basin is more gently folded and may be prospective.
Petroleum source rocks in the Sabinas Basin include the Cretaceous Olmos
(Maastrichtian) and Eagle Ford Shale (Turonian) formations and the Late Jurassic (Tithonian)
La Casita Formation. The latter two units contain marine shales with good petrophysical
characteristics for shale development.14 In contrast, the Olmos Formation is primarily a non-
marine coaly unit that, while a good source rock for natural gas15 as well as a coalbed methane
exploration target in its own right,16 appears to be too ductile for shale development.
Eagle Ford Shale. The Eagle Ford Shale is distributed across the NW, NE, and central
portions of the Sabinas Basin. The target is the 300-m thick sequence of black shales
rhythmically interbedded with sandy limestone and carbonate-cemented sandstone. We
estimated a 500-ft thick organic-rich interval with 400 feet of net pay. We considered the Eagle
Ford Shale in the Maverick Basin of South Texas as the analog for reservoir properties, using a
TOC of 4% and a thermal maturity of 1.50% (Ro). Our estimate of porosity was increased to 5%
based on the rock fabric and correlation with the Texas Eagle Ford Shale analog. The average
depth for the prospective Eagle Ford is approximately 9,000 feet. Based on reported data,
mostly from coal mining areas, we use a slightly under-pressured gradient of 0.35 psi/ft for the
Sabinas Basin.
June, 2013 II-13

Figure II-7. Sabinas Basin Outline and Shale Gas Prospective Area.
Source: ARI, 2013.
June, 2013 II-14

La Casita Formation. This Tithonian-age unit, regarded as the primary hydrocarbon

source rock in the Sabinas Basin, consists of organic-rich shales deposited in a deepwater
marine environment. The La Popa sub-basin is one of numerous sub-basins within the Sabinas
Basin, Figure II-8.17,18 The La Popa is a rifted pull-apart basin that contains thick source rock
shales. Up to 370 m of black carbonaceous limestone is present overlying several km of
evaporitic gypsum and halite. Total shale thickness in the La Casita ranges from 60 m to 800
m. Thick (300 m) and prospective La Casita Fm shales have been mapped at depths of 2,000
to 3,000 m in the central Sabinas Basin. Nearby, a thicker sequence (400-700 m) was mapped
at greater depth (3,000 to 4,000 m).
The high-graded prospective area for the La Casita Formation averages 11,500 ft deep,
about 2,500 ft deeper than the Eagle Ford Shale. The La Casita Formation averages about 240
ft of net pay thickness within an 800-ft thick organic-rich interval and has 2.0% average TOC
that is gas prone (2.5% Ro). Our estimate of porosity in the La Casita was increased to 5%
based on the rock fabric and correlation with the deep Texas and Louisiana Haynesville Shale
analog.
Eagle Ford Shale. The Eagle Ford Shale unit is the larger shale gas target in the
Sabinas Basin, with an estimated 100 Tcf of technically recoverable shale gas resource out of
501 Tcf of risked shale gas in-place within the 9,500-mi2 prospective area. The average
resource concentration is high at 132 Bcf/mi2.
La Casita Formation. The secondary target in the Sabinas Basin, the underlying La
Casita Formation, has an estimated 24 Tcf of technically recoverable shale gas out of 118 Tcf of
risked shale gas in-place. Its resource concentration is estimated at 69 Bcf/mi2.
2.4 Recent Activity
PEMEX has drilled one shale gas exploration well in the Sabinas Basin, confirming the
continuation of the Eagle Ford Shale play. The Percutor-1 horizontal well, completed in March
2012, produced dry gas from a sub-surface depth of 3,330-3,390 m. The well’s initial production
rate was a modest 2.17 million ft3/day (measurement time interval not specified), with production
reportedly declining rapidly.
June, 2013 II-15

Figure II-8. Geologic Map of the La Popa Sub-Basin, Southeastern Portion of the Sabinas Basin.
Note the numerous detachment and salt-controlled folds.
Source: Hudson and Hanson, 2010.
June, 2013 II-16

3. TAMPICO BASIN (Pimienta Shale)
Bounded on the west by the fold-and-thrust belt of the Sierra Madre Oriental (Laramide)
and on the east by the Tuxpan platform, the Tampico-Mizatlan Basin extends north from the
Santa Ana uplift to the Tamaulipas arch north of Tampico, Figure II-9. At the northern margin of
the basin is an arch, limited by a series of faults extending south from the Tamaulipas arch.
Figure II-9. Prospective Pimienta Formation (Tithonian) Shale, Tampico Basin.
Source: ARI, 2013.
June, 2013 II-17

The principal source rock in the Tampico Basin is the Upper Jurassic (Tithonian)
Pimienta Shale, Figure II-10. Although quite deep over much of the basin, the Pimienta reaches
shale-prospective depths of 1,400 to 3,000 m in the south where three uplifted structures occur.
The 40-km long, NE-SW trending Piedra de Cal anticline in the southwest Bejuco area has
Pimienta Shale cresting at 1,600-m depth. The 20-km long, SW-NE trending Jabonera syncline
in southeast Bejuco has maximum shale depth of 3,000 m in the east and minimum depth of
about 2,400 m in the west. A system of faults defines the Bejuco field in the center of the area.
Two large areas (Llano de Bustos and La Aguada) lack upper Tithonian shale deposits.
Figure II-10. Structural Cross-Section of the Tampico Basin
3.2 Reservoir Properties
Near the city of Tampico, some 50 conventional wells have penetrated organic-rich
shales of the Pimienta Formation at depths of about 1,000 to 3,000 m. Three distinct thermal
maturity windows (dry gas, wet gas, and oil) occur from west to east, reflecting the gentle
structural dip angle in this basin. Average shale depth ranges from 5,500 to 8,000 ft. Excluding
the paleo highs, the prospective area of the Pimienta Shale totals approximately 13,600 mi2.
Detailed shale thickness data are not available, but the Pimienta Fm here generally ranges from
200 m thick to as little as 10 m thick on paleo highs. We estimate an average net shale
thickness of about 200 ft, out of the total organically rich interval of 500 ft within the prospective
area. Average net shale TOC is estimated at 3%, with average thermal maturity ranging from
0.85% to 1.4% Ro.
June, 2013 II-18

The Pimienta Shale in the Tampico Basin holds an estimated 23 Tcf and 5.5 billion
barrels of risked, technically recoverable shale gas and shale oil resources, out of risked OOIP
and OGIP of 151 Tcf and 138 billion barrels, respectively. The shale gas resource
concentration averages 19 to 83 Bcf/mi2 while the shale oil concentration averages 17 to 38
million bbl/mi2.
3.4 Recent Activity
PEMEX reported that it is evaluating the shale geology of the Tampico Basin and plans
to drill up to 80 shale exploration wells through 2015.19
4. TUXPAN PLATFORM (Pimienta and Tamaulipas Shales)
The Tuxpan Platform, located southeast of the Tampico Basin, is a subtle basement
high that is capped with a well-developed Early Cretaceous carbonate platform.20 A particularly
prospective and relatively well defined shale gas deposit is located in the southern Tuxpan
Platform. Approximately 50 km south of the city of Tuxpan, near Poza Rica, a dozen or so
conventional petroleum development wells in the La Mesa Syncline area penetrated thick
organic-rich shales of the Pimienta (Tithonian) and Tamaulipus (Lower Cretaceous)
Formations.21
A detailed cross-section of the Tuxpan Platform shows thick Lower Cretaceous and
Upper Jurassic source rocks dipping into the Gulf of Mexico Basin, Figure II-11. These source
rocks reach prospective depths of 2,500 m. Thermal maturity ranges from oil- to gas-prone.
Pimienta Fm. The organically rich portion of the Jurassic Pimienta Shale averages
about 500 ft thick in the high-graded area, with net thickness estimated at 200 ft. However,
southeast of Poza Rica some areas the shale is thin or absent, probably due to submarine
erosion or lack of deposition, Figure 12. The gamma ray log response in the organic-rich
Pimienta Shale indicates moderate TOC of 3.0%, which is in the oil to wet gas window (average
Ro of 0.9%). Depth ranges from 6,600 to 10,000 ft, averaging about 8,500 ft.
June, 2013 II-19

Tamaulipas Fm. The Lower Cretaceous Tamaulipas Fm spans a depth range of 6,000
to 9,500, averaging about 7,900 ft. The organic-rich interval averages 300 ft thick, with net pay
estimated at about 210 ft. TOC is estimated to be 3.0%. The average thermal maturity is
slightly lower than for the deeper Pimienta, at 0.85% Ro.
Figure II-11. Cross-Section of the Tuxpan Platform.
B B’
Modified from
Salvador, 1991c
Modified from Salvador, 1991c.
June, 2013 II-20

Figure II-12. Potentially Prospective Shale Gas and Shale Oil Areas of the Tuxpan Platform.
Source: ARI, 2013.
June, 2013 II-21

Pimienta Fm. In the Tuxpan Platform, the prospective area of the Pimienta Fm shale is
estimated to be approximately 1,000 mi2. Risked, technically recoverable resources are
estimated to be about 1 Tcf of shale gas and 0.5 billion barrels of shale oil and condensate.
Risked shale resource in-place is estimated at 10 Tcf and 12 billion barrels.
Tamaulipas Fm. Due to limited data on the younger Tamaulipas Fm the same
prospective area of the Pimienta Shale was assumed (1,000 mi2). The Tamaulipas Shale is
estimated to have risked technically recoverable resources of about 1 Tcf of shale gas and 0.5
billion barrels of shale oil and condensate, out of risked shale resources in-place of 9 Tcf and 13
billion barrels.
4.4 Recent Activity
No shale gas or oil exploration activity has been reported on the Tuxpan Platform.
June, 2013 II-22

5. VERACRUZ BASIN (Maltrata Shale)
The Veracruz Basin extends over an onshore area of 9,030 mi2, near its namesake city.
The basin’s western margin is defined by thrusted Mesozoic carbonates (early Tertiary
Laramide Orogeny) of the Cordoba Platform and Sierra Madre Oriental, Figure II-13. The basin
is asymmetric in cross section, with gravity showing the deepest part along the western margin,
Figure II-14.22 The basin comprises several major structural elements, from west to east: the
Buried Tectonic Front, Homoclinal Trend, Loma Bonita Anticline, Tlacotalpan Syncline, Anton
Lizardo Trend, and the highly deformed Coatzacoalcos Reentrant in the south.23
A recent shale exploration map released by PEMEX indicates the prospective area of
the Veracruz Basin is much smaller than previously assumed in the 2011 EIA/ARI study. This is
because the shale is shown to be dipping at a steeper angle than previously mapped. In
addition, both shale gas and oil thermal maturity windows are present.
Maltrata Fm. The Upper Cretaceous (Turonian) Maltrata Formation is a significant

source rock in the Veracruz Basin, containing an estimated 300 ft of organic-rich, shaly marine
limestone. TOC ranges from 0.5% to 8%, averaging approximately 3%, and consists of Type II
kerogen. Thermal maturity ranges from oil-prone (Ro averaging 0.85%) within the oil window at
depths of less than 11,000 ft, to gas-prone (Ro averaging 1.4%) within the gas window at
average depths below 11,500 ft.
Maltrata Fm. Whereas we previously had assumed that 90% of the Veracruz Basin
(8,150 mi2) is in a favorable depth range, based on available cross-sectional data, the new
PEMEX map indicates that the true prospective area in the Veracruz Basin could be much
smaller, perhaps only 960 mi2. This yields a reduced estimate of 3 Tcf and 0.3 billion barrels of
risked technically recoverable shale gas and shale oil resources for the Maltrata Formation in
the Veracruz Basin, out of 21 Tcf and 7 billion barrels of risked shale gas and shale oil in-place.
June, 2013 II-23

5.4 Recent Activity
PEMEX plans to drill up to 10 shale exploration wells in the Veracruz Basin in the next
three years.
Figure II-13. Veracruz Basin Outline and Shale Gas and Shale Oil Prospective Area.
Source: ARI, 2013.
Figure II-14. Veracruz Basin Cross Section Showing the Maltrata Shale
June, 2013 II-24

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Mello, U.T. and Karner, G.D., 1996. “Development of Sediment Overpressure and Its Effect on Thermal Maturation:
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Salvador, A., 1991a. “Plate 3 : Structure at Base and Subcrop Below Mesozoic Marine Sections, The Gulf of Mexico Basin.”
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6
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7
Cuevas Leree, A., Muñoz-Cisneros, R., Silva-Saldivar, P., De la Rosa, V.H., Rivas, E.O., González, J., and Fernández-Turner,
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8
Horbury, A. D., Hall, S., Gonzalez, F., Rodrıguez, D., Reyes, A., Ortiz, P., Martınez, M., and Quintanilla, G., 2003. “Tectonic
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Previously Imagined.” in C. Bartolini, R. T. Buffler, and J. Blickwede, eds., The Circum-Gulf of Mexico and the Caribbean:
Hydrocarbon Habitats, Basin Formation, and Plate Tectonics. American Association of Petroleum Geologists, Memoir 79, p.
184–245.
9
Perez Cruz, G.A., 1993. “Geologic Evolution of the Burgos Basin, Northeastern Mexico.” Ph.D. thesis, Rice University, 577 p.
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Ambrose, W. A., et al., 2005. “Neogene Tectonic, Stratigraphic, and Play Framework of the Southern Laguna Madre-Tuxpan
Continental Shelf, Gulf of Mexico.” American Association of Petroleum Geologists, Bulletin, v. 89, p. 725–751.
11
Estrada, J., 2012. “Gas de Lutita en México: Planes, Potencial y Regulaciones.” Analytica Energetica, S.P., August, 56 p.
12
PEMEX, Form 6-K, U.S. Securities and Exchange Commission, November 2012, p. 7.
13
Soegaard, K., Ye, H., Halik, N., Daniels, A.T., Arney, J., and Garrick, S., 2003. “Stratigraphic Evolution of Latest Cretaceous
to Early Tertiary Difunta Foreland Basin in Northeast Mexico: Influence of Salt Withdrawal on Tectonically Induced Subsidence
by the Sierra Madre Oriental Fold and Thrust Belt.” in C. Bartolini, R. T. Buffler, and J. Blickwede, eds., The Circum-Gulf of
Mexico and the Caribbean: Hydrocarbon Habitats, Basin Formation, and Plate Tectonics, American Association of Petroleum
Geologists, Memoir 79, p. 364–394.
14
Eguiluz de Antuñano, S., 2001. “Geologic Evolution and Gas Resources of the Sabinas in Northeastern Mexico.” In: Bartolini,
C., Buffler, R.T., Cantú-Chapa, A. (Eds.), The Western Gulf of Mexico Basin: Tectonics, Sedimentary Basins and Petroleum
Systems. American Association of Petroleum Geologists, Memoir 75, pp. 241–270.
June, 2013 II-25

15
Alsaab, D., Suarez-Ruiz, I., Elie, M., Izart, A., and Martinez, L., 2006. “Comparison of Generative Capacities for Bitumen and
Gas Between Carboniferous Coals from Donets Basin (Ukraine) and a Cretaceous Coal from Sabinas–Piedras Negras Basin
(Mexico) During Artificial Maturation in Confined Pyrolysis System.” International Journal of Coal Geology, vol. 71, p. 85-102.
16
Eguiluz, de Antunano, S., and Amezcua, N.T., 2003. “Coalbed Methane Resources of the Sabinas Basin, Coahuila, Mexico.”
in C. Bartolini, R. T., Buffler, and J. Blickwede, eds., The Circum-Gulf of Mexico and the Caribbean: Hydrocarbon habitats,
basin formation, and plate tectonics. American Association of Petroleum Geologists, Memoir 79, p. 395–402.
17
Lawton, T.F., Vega,, F.J., Giles, K.A., and Rosales-Dominguez, C., 2001. “Stratigraphy and Origin of the La Popa Basin,
Nuevo Leon and Coahuila, Mexico.” In C. Bartolini, R.T. Buffler, and A. Cantu-Chapa, eds., The Western Gulf of Mexico
Basin: Tectonics, Sedimentary Basins, and Petroleum Systems. American Association of Petroleum Geologists, Memoir 75,
p. 219-240.
18
Hudson, S.M. and Hanson, A.D., 2010. “Thermal Maturation and Hydrocarbon Migration Within La Popa Basin, Northeastern
Mexico, with Implications for Other Salt Structures.” American Association of Petroleum Geologists, Bulletin, vol. 94, p. 273-
291.
19
PEMEX, Investor Presentation, November 2012, 43 p.
20
Salvador, A., 1991c. “Plate 6 : Cross Sections of the Gulf of Mexico Basin.” The Geology of North America, Vol. J, The Gulf
of Mexico Basin. The Geological Society of America.
21
Cantu-Chapa, A., 2003. “Subsurface Mapping and Structural Elements of the Top Jurassic in Eastern Mexico (Poza Rica and
Tampico Districts).” In C. Bartolini, R.T. Buffler, and J. Blickwede, eds. The Circum-Gulf of Mexico and the Caribbean:
Hydrocarbon Habitats, Basin Formation, and Plate Tectonics. American Association of Petroleum Geologists, Memoir 79, p.
51-54.
22
Escalera Alcocer, J.A., 2012. “Potencial de Recursos no Convencionales Asociado a Plays de Aceite y Gas de Lutitas en
México.” ExpoForu PEMEX, August 1, 37 p. (in Spanish).
23
Prost, G. and Aranda, M., 2001. “Tectonics and Hydrocarbon Systems of the Veracruz Basin, Mexico.” In C. Bartolini, R.T.
Buffler, and A. Cantu-Chapa, eds., The Western Gulf of Mexico Basin: Tectonics, Sedimentary Basins, and Petroleum
Systems. American Association of Petroleum Geologists, Memoir 75, p. 271-291.
June, 2013 II-26

III. Australiaa EIA/ARI W
III. AUSTR
RALIA
SUMMA
ARY
With
W geologic and indu
ustry conditiions resemb
bling those of the US
SA and Can
nada,
Australia has the po
otential to be
e one of the
e next counttries with co
ommercially viable shale
e gas
and shale oil produc
ction. As in the US, small independ
dents have lled the wayy, assembling the
al data and
geologica d exploring the high potential sh
hale basinss of Austra
alia, Figure III-1.
Internatio
onal majors are now enttering these plays by forrming JV partnerships w
with these sm
maller
independ
dents, bring capital investment to the table. But, with tthe remoten
ness of man
ny of
Australia’s shale gas
s and shale oil
o basins, de
evelopment will likely prroceed at a m
moderate pa
ace.
Figure III-1. Australia’s Assessed Prospective

P S hale Gas and Shale Oil Bassins
Source: ARI, 2013
June, 2013 III-1

This
T report assesses
a th
he shale ga
as and shale oil poten
ntial in six major Austrralian
sedimenttary basins having sufficient geolog
gic data forr a quantitattive assessm
ment. Addittional
potential is likely to exist
e in otherr basins not yet assesse
ed.
The
T six assessed shale gas and oil basins of A
Australia holld an estima
ated 2,046 T
Tcf of
risked sh
hale gas in
n-place, with
h 437 Tcf as the riskked, techniccally recove
erable shale
e gas
resource
e, Tables III--1A, III-1B, and
a III-1C. These six b
basins also h
hold an estim
mated 403 b
billion
barrels of
o risked sha
ale oil in-pla
ace, with 17
7.5 billion ba
arrels as rissked, techniccally recove
erable
shale oil resource, Ta
ables III-2A and III-2B.
Of
O the six assessed basins, the Coo main onshore gas-producing
oper Basin, Australia’s m
basin, with its existin
ng gas proc
cessing facilities and tra
ansportation
n infrastructu
ure, could be the
first com
mmercial sou
urce of shale
e hydrocarb
bons. The ba
asin’s Perm ales have a non-
mian-age sha
marine (lacustrine) depositionals
d s and the shale gas app ears to have
e elevated C
CO2 content,, both
factors adding
a risk to
o these sha
ale gas and shale oil pla
ays. Santoss, Beach En
nergy and S
Senex
Energy are
a testing the
t shale re
eservoirs in the Cooperr Basin, with initial resu
ults from ve
ertical
on test wells providing encourageme
productio ent for furthe
er delineation.
The
T other pro
ospective Au
ustralian sha
ale basins ad
ddressed in this report include the ssmall,
scarcely explored Maryboroug
M h Basin in Queensland, that conta
n coastal Q ains prospe
ective
ous-age marrine shales thought to be over-pre
Cretaceo essured and
d gas satura
ated. The Perth
Basin in Western Australia,
A undergoing initial testing
g by AWE and Norwe
est Energy,, has
prospective marine shale targetts of Triassic and Perm
mian age. T
The large C
Canning Bassin in
as deep, Ord
Western Australia ha dovician-age
e marine sha
ales that are
e roughly co
orrelative witth the
Bakken Shale in the Williston Basin. In Northern
N Terrritory, the P
Pre-Cambria
an shales in
n the
o Basin and the
Beetaloo t Middle Cambrian
C sh
hale in the G
Georgina Bassin have rep
ported oil and
d gas
shows in
n shale exploration wells. If prove
ed commerccial, these ttwo shale gas and sha
ale oil
basins would
w become some of th
he oldest pro
oducing hyd rocarbon so
ource rocks in the world.
June, 2013 III-2

III. Australia EIA/ARI W
Table
T III-1A. Austraalian Shale Gas Reeservoir Propertiees and Resourcess (Page 1 of 3)
G
Gas Resources
s
Cooper
Basin/Gross Area 2
(46,900 mi )
Basic Data
Roseneath-Epsilonn-
Shale Formaation Rosen
neath-Epsilon-Murtereee (Nappamerri) R
Roseneath-Epsilon-Mu
urteree (Patchawarra)
Murteree (Tenappera)
Geologic Age
A Permian Perm
mian Permian
Depositional Envvironment Lacustrine Lacusstrine Lacustrine
2
Prospective Area (m
mi ) 6225 555 3,525 1,010 1,1550 170 200
Physical Extent
Orgaanically Rich 2550 500 500 125 100 100 225

Thickness (ft)
Net 1550 300 300 75 600 60 135
Interrval 5,000 - 7,000 6,000 - 10,000 7,000 - 13,000 7,000 - 9,200 8,000 - 10,000
1 8,000 - 13,0000 5,000 - 6,500
Depth (ft)
Averrage 6,000 8,000 10,000 8,000 9,0000 10,500 5,500
Mo d. Mod. Mod.
Reservoir Pressure Normal Norm
mal Normal Normal
Properties
Reservoir
Overp ress. Overpress. Overpress.

Average TOC (wt. %)) 2.66% 2.6% 2.6% 2.6% 2.6% 2.6% 2.6%
Thermal Maturity (%
% Ro) 0.855% 1.15% 2.00% 0.85% 1.155% 1.30% 0.85%
Clay Content Lo w Low Low Low Low w Low Low
Gas Phase Assocc. Gas Wet Gas Dry Gas A
Assoc. Gas Wet Gas
G Dry Gas Assoc. Gas
Resource
2
GIP Concentration (Bcf/mi ) 13.1 87.6 100.1 7.3 15..6 18.6 10.1
Risked GIP (Tcf) 6.1 36.5 264.7 4.4 10..8 1.9 1.2
Risked Recoverable (Tcf) 0.7 9.1 79.4 0.4 2.77 0.5 0.1
JJune, 2013 III-3

Tablee III-1B. Australian

n Shale Gas Reservoir Properties and
a Resources (Coon’t) (Page 2 of 3))
G
Gas Resources
s
M
Maryborough Perth Canniing
Basin/Gro
oss Area 2 2 2
(4,290 mi ) (20,000 mi ) (181,0000 mi )
Basic Data
Good
dwood/Cherwell
Shale Fo
ormation Caarynginia Kockatea Goldw
wyer
Mudstone
Geolog gic Age C
Cretaceous U. Permian L. Triassic M. Ordo vician
Depositional Environment Marine Marine Marine Marinne
2
Prospective Areaa (mi ) 1,540 2,200 8600 1,030 14,900 19,6200 22,860
Physical Extent
O
Organically Rich 1,250 950 3000 300 1,000 1,3000 1,300
Thickness (ft)
N
Net 250 250 1600 160 250 250 250
In
nterval 5,000 - 16,500 3,3000 - 16,500 3,300 - 15,100 9,200 - 16,500 33,300 - 7,200 7,200 - 100,500 10,500 - 16,500
Depth (ft)
A
Average 9,500 10,000 9,200 11,000 5,200 8,8000 13,500
Reservoir Pressu
ure Mo d. Overpress. Normal Normal Normal Normal Normaal Normal
Properties
Reservoir
Average TOC (wtt. %) 2.0% 4.0% 5.6%

% 5.6% 3.0% 3.0% 3.0%
Thermal Maturityy (% Ro) 1.50% 1.40% 0.85%
% 1.15% 0.85% 1.15%
% 1.40%
Clay Content Low Low Loww Low Low Low Low
Gas Phase Dry Gas D Gas
Dry Assoc. Gas Wet Gas A
Assoc. Gas Wet Gaas Dry Gas
Resource
2
GIP Concentratio
on (Bcf/mi ) 110.7 94.0 14.00 58.9 18.7 67.1 109.2
Risked GIP (Tcf) 63.9 124.1 7.2 36.4 83.5 395.00 748.7
Risked Recoveraable (Tcf) 19.2 24.8 0.6 7.3 6.7 79.0 149.7
JJune, 2013 III-4

Tablee III-1C. Australian

n Shale Gas Reservoir Properties and
a Resources (Coon’t) (Page 3 of 3))
G
Gas Resources
s
Georgina oo
Beetalo
Basin//Gross Area 2 2
(125,000 mi ) (14,000 mi
m )
Basic Data
Shalee Formation L. Arthur

A Shale (Dulcie Tro
ough) L. Arthur Shaale (Toko Trough) M. Velkerrri Shale L. Kyalla Shale
Geologic Age M. Cambrian M. Cambrian

C Precambbrian Precambrrian
nal Environment
Deposition Marine M
Marine Marinne Marine
2
Prospective Area
A (mi ) 2,260 1,9500 3,220 2,010 790 2,650 2,1300 2,480 4,010 2,400 1,310
Physical Extent
Organically Rich 115 115 65 65 65 450 4500 450 520 520 520
Thickness (ft))
Net 85 85 50 50 50 100 1000 100 130 130 130
Interval 7,2200 - 10,500 2,300 - 3,,300 3,300 - 4,000 4,0000 - 5,000 5,000 - 6,500 3,300 - 5,000 5,000 - 7,000
7 7,000 - 8,700 3
3,300 - 5,000 5,000 - 6,0000 6,000 - 8,000
Depth (ft)
Average 8,800 3,0000 3,600 4,500 5,700 4,200 6,0000 7,500 4,200 5,500 6,500
Mod. Mod . Mod. Mod. Mod. Mod.
Reservoir Preessure Normal Normaal Normal N
Normal Normal
Properties
Reservoir
Overpress. Overpreess. Overpress. O

Overpress. Overpresss. Overpress.
Average TOC (wt. %) 3.0% 5.5% 5.5% 5.5% 5.5% 4.0% 4.0%% 4.0% 2.5% 2.5% 2.5%
Thermal Matu
urity (% Ro) 1.15% %
1.50% 0.85% 1
1.15% 1.50% 0.85% 1.15%% 1.60% 0.85% 1.15% 1.60%
Clay Content Low Low Low Low Low Low Loww Low Low Low Low
Gas Phase Wet Gas Dry Gaas Assoc. Gas W Gas
Wet Dry Gas Assoc. Gas Wet Gas
G Dry Gas A
Assoc. Gas Wet Gass Dry Gas
Resource
2
GIP Concentrration (Bcf/mi ) 22.8 29.1 4.5 17.5 26.7 7.2 30.77 42.0 11.7 37.1 49.6
Risked GIP (T
Tcf) 19.3 21.3 5.5 13.2 7.9 9.6 32.77 52.0 23.5 44.5 32.5
Risked Recovverable (Tcf) 3.9 4.3 0.4 2.6 1.6 1.0 8.2 13.0 2.3 11.1 8.1
JJune, 2013 III-5

Tablee III-2A. Australiaan Shale Oil Reserrvoir Properties an

nd Resources (Coon’t) (Page 1 of 2)
O
Oil Resources
Coo
oper Perth Caanning
(46,9000 mi ) (20,000 mi ) (181,0000 mi )
Basic Data
Roseneath-Epsiloon- Roseneath-Epssilon-Murteree Rosen

neath-Epsilon-Murtereee
Shaale Formation Kockatea Goldwyer
Murteree (Nappameerri) (Patchaawarra) (Tenappera)
Geeologic Age Permian mian
Perm Permian L. Triassic M. Orrdovician
Depositional Environment Lacustrine Lacusstrine Lacustrine Marine M
Marine
2
Prospectivee Area (mi ) 625 5555 1,010 1,150 200 860 1
1,030 14,900 19,620
Physical Extent
Organically Rich 250 5000 125 100 225 300 300 1,000 1,300
Thickness (ft)
(
Net 150 3000 75 60 135 160 160 250 250
Interval 5,000 - 7,000 6,000 - 10,000 7,000 - 9,200 8,000 - 10,000 5,000 - 6,500 3,300 - 15,100 9,2000 - 16,500 3,300 - 7,2000 7,200 - 10,500
Depth (ft)
Average 6,000 8,0000 8,000 9,000 5,500 9,200 11,000 5,200 8,800
Mod. Mo d.
Reservoir Pressure
P Normal Normal Normal Normal Normal Normal Normal
Properties
Reservoir
Overpress. Overp ress.

Average TO OC (wt. %) 2.6% 2.6% 2.6% 2.6% 2.6% 5.6% 5
5.6% 3.0% 3.0%
Thermal Maaturity (% Ro) 0.85% 1.155% 0.85% 1.15% 0.85% 0.85% 1.15% 0.85% 1.15%
Clay Conten nt Low Loww Low Low Low Low Low Low Low
Oil Phase Oil Conde nsate Oil Condensate Oil Oil Conndensate Oil Condensate
Resource
2
OIP Concen
ntration (MMbbl/mi ) 22.5 14..5 11.1 3.0 21.9 18.9 6.1 41.1 10.2
Risked OIP (B bbl) 10.5 6.00 6.7 2.1 2.6 9.8 3.8 183.7 60.0
Risked Reco
overable (B bbl) 0.63 0.336 0.34 0.10 0.13 0.39 0.15 7.35 2.40
JJune, 2013 III-6

Tablee III-2B. Australiaan Shale Oil Reserrvoir Properties an

nd Resources (Coon’t) (Page 2 of 2)
O
Oil Resources
Georgina Beetaloo
Baasin/Gross Area 2 2
(125,000 mi ) (14,000 mi )
L. Arthur Shaale
Sh
hale Formation L. Arthur Shalle (Toko Trough) M. Velkerri Shale
S L. Kyalla Shale
(Dulcie Troug
gh)
Geologic Age
G M. Cambriann M. Cambrian Precambriaan Precambrian
Deposiitional Environmentt Marine Marine Marine Marine
2
Prospectivve Area (mi ) 2,260 3,220 2,010 2,650 2,130 4,0010 2,400
Organically Rich
R 115 65 65 450 450 520 520
Thicknesss (ft)
Net 85 50 50 100 100 130 130
Interval 7,200 - 10,5000 3,300 - 4,000 4,000 - 5,000 3,300 - 5,000 5,0000 - 7,000 3,300 - 5,000 5,000 - 6,0000
Depth (ft)
Average 8,800 3,600 4,500 4,200 6,000 4,2200 5,500
Mod. Mod. Mood. Mod.
Reservoir Pressure Normal Normal Normal
Overpress. Ovverpress. Overppress. Overpresss.
Average TOC
T (wt. %) 3.0% 5.5% 5.5% 4.0% 4.0% 2.55% 2.5%
Thermal Maturity
M (% Ro) 1.15% 0.85% 1.15% 0.85% 1.15% 0.885% 1.15%
Clay Content Low Low Low Low Low Loow Low
Oil Phase Condensatee Oil Condensate Oil Coondensate O
Oil Condensaate
2
OIP Conceentration (MMbbl/m
mi ) 3.5 14.7 5.2 16.7 5.3 277.1 8.9
Risked OIP (B bbl) 2.9 17.7 3.9 22.1 5.7 544.4 10.7
Risked Reecoverable (B bbl) 0.12 0.71 0.16 1.11 0.28 2..72 0.54
JJune, 2013 III-7

1. COOPER
C BASIN
1.1 In
ntroduction
n
Straddling
S the South Au
ustralia and Queenslan
nd border, the Cooper Basin has been
ades.1 Within the
shore oil and gas supply region fo r the past sseveral deca
Australia’s main ons
basin, th
he Nappam h contains thick, overrpressured and organic-rich shale
merri Trough es at
prospective depth. The
T Cooper Basin alrea
ady has servvice industryy capacity for well drilling
g and
hydraulic
c fracturing that could be
e used to dev
velop the prrospective sh
hale reservo
oirs in this ba
asin.
However,
H wh
hile overall the
t Cooper Basin appe
ears favorab
ble for shale
e developme
ent, a
key risk remains in that the sha
ales were deposited
d in a lacustrine
e (not marin
ne) environm
ment.
ne shales often
Lacustrin o have higher
h clay contents w
with uncertaiinty on how
w the shaless will
respond to hydraulic stimulatio
on treatmentts, in comp
parison with lower clayy content m
marine
shales. In
n addition, high
h CO2 volu
umes have been
b noted in the deepe
er troughs in
n this basin.
1.2 Geologic
G Se
etting
The
T Cooper Basin is a Gondwana intracrato non-marine Late
onic basin ccontaining n
Carbonife
erous to Middle
M Trias
ssic strata, which incl ude prospe
ective Perm
mian-age sh
hales.
Following
g an episode of regiona
al uplift and erosion durring the late
e Triassic, th
he Cooper B
Basin
continued
d to gently subside.
s The Paleozoic
c sequence w
was unconfo
ormably overlain by up tto 1.3
km of Ju
urassic to Tertiary delta
aic deposits of the Erom
manga Basiin which contain the ba
asin’s
conventio one reservoiirs.2
onal sandsto
Extending
E ov
ver a total area
a out 130,000 km2, the C
of abo Cooper Basin contains three
major de
eep troughs e gas and shale oil p
s with shale potential - - Nappame
erri, Patchaw
warra
(including
g the Arrabu
ury Trough) and Tenapp
pera, Figure
e III-2. Thesse troughs a
are separate
ed by
faulted structural
s hig
ghs from which Permia
an shale-bea
aring strata have large
ely been ero
oded,
Figure IIII-3.3,4
The
T prospecttive areas wiithin the Coo
oper Basin’ss troughs are
e large, therm
mally mature
e and
overpressured. Deptth to the Perrmian horizo
on ranges fro
om 5,000 feet at the sou
uthern end o
of the
basin to 13,000 fee
et in the ce
enter. Nearrly the entirre areal exttent of the Nappamerrii and
Patchawarra troughs
s, as well as
s the Tenapp
pera Trough
h in the soutth, appear d
depth-prospe
ective
e developme
for shale ent. Furthe
ermore, relatively little ffaulting occurs within these trough
hs as
structural deformatio
on is confined
d largely to uplifted
u es, Figure III-3.
ridge
June, 2013 III-8

Figure III-2: Majo

or Structural Elements
E of th e Southern Coooper Basin.
June, 2013 III-9

Figure III-33. Seismic Secction Across thhe Merrimeliaa Ridge
The
T stratigraphy of the Cooper
C Basin is shown in Figure III-4. Conve
entional and tight
sandston
ne oil and gas
g reservo
oirs are foun
nd in the P
Patchawarra and Toolacchee formattions,
interbedd
ded with coa
al deposits. These form
mations were
e sourced byy two compllexes - - the
e Late
Carbonife
erous to La
ate Permian
n Gidgealpa Group and
d the Late Permian to
o Middle Triiassic
Nappame
erri Group, both of which were deposited in n
non-marine ssettings. O
Of the two so
ource
rocks, the Gidgealpa
a Group is more
m prospec
ctive. Most of the gas g
generated byy the Nappa
amerri
kely came frrom its multiple, thin and
Group lik d discontinu ous coal se
eams, since the shales iin the
Nappame
erri Group are
a low in TO
OC.
The
T most pro
ospective sh e Gidgealpa Group, with oil and ga
hales in the as shows d
during
drilling and higher TOCs, are the Early Perm
mian Rosen
neath and M ales.5 Figure
Murteree sha e III-5
shows a stratigraph
hic cross-se
ection of the Roseneatth, Epsilon, and Murte
eree (collecctively
termed REM)
R sequen
nce in the Nappamerri Trough.
T
1.3 Reservoir
R Properties
The
T Murteree
e Shale is a widespread, shaley form
mation typica
ally 150 feett thick acrosss the
Cooper Basin,
B becom
ming as thick as 250 fee
et in the Nap
ppamerri Tro
ough. The M
Murteree con
nsists
of dark organic-rich
o shale,
s siltsto
one and fine
e-grained san
ndstone, becoming sandier to the ssouth.
TOC of the Murteree
e Shale averages 2.5% based
b on da
ata from seve
en wells.
The
T Rosenea
ath Shale, less
l widesp e due to errosion on uplifts,
pread than tthe Murteree
averages
s 120 feet thick, reaching 330 feett thick in the
e Nappame
erri Trough. The interve
ening
Epsilon Fm consists
s primarily of
o low-perm
meability (0.1
1 to 10 mD
D) quartzose
e sandstone
e with
ceous shale and coal. The Epsilon
carbonac n, averaging
g about 175 feet thick in
n drill cores,, was
d in a fluvial-deltaic enviironment.6
deposited
June, 2013 III-10

Fiigure III-4. Straatigraphy of th

he Cooper Baasin Permian-A
Age Shales
Source: Soouth Australia DMER, 2010
June, 2013 III-11

Figure III-5. Stratigraphic

S Cross-Sectionn in the Coopeer Basin
Source: Menpes, 2012
The
T organic--rich gross thickness of M sequence in the Nap
o the REM ppamerri Trrough
s about 500 feet, with a net pay of 300
averages 3 feet in th
he gas prosp
pective area and a net p
pay of
150 feet in the oil prrospective area.7 The gross organicc-rich REM sequence iss much thinn
ner in
the Patch
hawarra Tro
ough, averag et in the gas prospective
ging 100 fee e area and 1
125 feet in th
he oil
prospective area, witth a modera
ate net to gro
oss ratio. T
The gross orrganic-rich R
REM sequen
nce in
the Tena
appera Troug
gh averages
s 225 feet.
The
T REM sou
urce rocks are primarily Type III kero
ogens. They have gene
erated mediu
um to
light grav
vity oil, rich in paraffin. Initial min
neralogical data indicatte that these shales co
onsist
mainly of
o quartz an
nd feldspar (50%) and carbonate (30%; main
nly iron-rich
h siderite). Clay
s relatively low (20%; prredominately
content is y illite).8 In sspite of the lacustrine de
epositional o
origin,
this lithology appears
s brittle and could respo
ond well to hyydraulic fraccturing.
June, 2013 III-12

Temperature
T gradients in the Coop
per Basin a
are quite hiigh, averagiing 2.55°F/1
100ft.
Bottomho
ole temperatture at depth
hs of 9,000 feet
f average
e about 300ºº F. The Na
appamerri Trrough
is even hotter,
h with a temperature gradient of up to 3.4
42°F/100 ft, d
due to its ra
adioactive grranite
basemen
nt. The Patc
chawarra Trrough, which
h has a sed imentary-me
etamorphic basement, h
has a
lower butt still elevate
ed 2.02° F/10
00 ft temperrature gradie
ent.
The
T thermal maturity of
o the Perm
mian REM ssection in tthe deeper portions o
of the
Nappame
erri and Pa
atchawarra trroughs is ga
as prone (Ro >1.3%). Ro values be
etween 0.7%
% and
1.0% are
e observed at
a the shallo
ower, southe
ern ends of each trough
h and also in the Tenap
ppera
Trough, suggesting that the RE
EM section is oil prone
e in these areas. A m
modest size
e wet
densate pro
gas/cond ospective arrea exists between
b the
e oil prone and dry gas areas in
n the
Nappame
erri and Patc
chawarra tro
oughs.
Regional
R hyd
drostatic pre he norm in most of the
essure gradients are th e Cooper B
Basin.
Howeverr, the Nappa
amerri Troug
gh becomes
s overpressu pths of 9,000
ured at dep 0 to 12,000 feet,
with pres
ssure gradie
ents of up to 0.7 psi/ft re
ecorded in th portions of the trough.9 High
he deepest p
levels of carbon diox
xide are also
o common in
n the Cooperr Basin. Ga
as produced from the Ep
psilon
on (the centrral portion of
Formatio o the REM sequence)
s ccontains ele
evated CO2, typically ran
nging
erage 15%).10
from 8% to 24% (ave
1.4 Resource
R Assessmen
A nt
The
T prospecttive areas fo
or shale gas developme
ent in the Co
ooper Basin area are de
efined
by the in
ntersection of um depth of 6,500 feet (top of the gas window
o a minimu w, as define
ed by
thermal maturity
m mod
deling), vitrin
nite reflectan
nce greater than 1.0%, and a minim
mum thickne
ess of
the REM
M section off 50 feet. The
T ctive areas ffor shale oil are define
prospec ed by Ro va
alues
between 0.7% and 1.0% and a minimum
m ckness of th e REM section of 50 fee
thic et, Figure III--6.
Completable
C shale interv
vals in the dry and we
et gas prosp
pective area
as containing
g the
Rosenea
ath, Epsilon, and Murte
eree (REM)) formationss have estimated shale gas reso
ource
2
concentrrations of 88 to 100 Bcf/mi
B in th
he Nappame
erri Trough, benefitting
g from favo
orable
thickness
s, moderate TOC and ov
verpressurin
ng, but reducced by 15% for CO2 con
ntent. In con
ntrast,
the shale gas reso
ource conce
entrations in
n the dry a
and wet gass prospectivve areas o
of the
Patchawarra Trough are much le
ess, from 16 mi2. The reso
6 to 19 Bcf/m ource conce
entration in the oil
prospective area of the Tenappa
ara Trough is barrels/mi2.
s 22 million b
June, 2013 III-13

Figure III-6. Southern Cooper Basin

n Prospective Shale Gas annd Shale Oil Areas
The
T total sha
ale gas and
d shale oil prospective area for th
he Permian REM section is
estimated m 2, covering major portio
d at 7,235 mi ons of the N
Nappamerri, Patchawarra
a and Tenap
ppera
troughs in the Coope
er Basin. Net of 15% CO
C 2 content, the estimatted risked sh
hale gas in-place
is 325 Tcf,
T with a risked, tech
hnically reco
overable sh
hale gas ressource of 9
93 Tcf, inclu
uding
associate
ed gas in the
e shale oil prospective
p area,
a Table IIII-A. The risked shale o
oil in-place iin the
Cooper Basin
B is 29 billion barre
els, with a ris
sked, techniically recove
erable resou
urce of 1.6 b
billion
bbls, Tab
ble III-2A.
June, 2013 III-14

1.5 Recent
R Activity
The
T Cooper Basin is Australia’s larg
gest onshore
e oil and ga
as production region. B
Beach
Energy, Senex, DrillSearch Ene active shale gas and oil exploration
ergy and Santos have a n and
on programs underway.
evaluatio
Beach
B has drilled two ve
ertical test wells
w in the d
deep, centra
al portion off the Nappa
amerri
Trough. These we out 2 MMcffd gas afterr hydraulic stimulation. The
ells each tested at abo
er-1, thought to be Austtralia’s first commercially
Encounte c y viable sha
ale well, wass drilled to a total
depth of 11,850 feet and penetra
ated 1,290 feet
f of the R
REM sequence, reporting
g continuouss gas
ed an additio
shows. Beach drille onal three vertical test w
wells in the first half of 2012, with three
more pla e rest of the year. The te
anned for the est wells wil l be studied to identify the best loca
ations
for placin
ng two horizo o be drilled in late 2012..
ontal wells to
Senex
S has drrilled five ve
ertical test wells
w in the T
Tenappera T
Trough to the
e south and
d east
of the Nappamerri
N Trough with
h reports off liquid hydrrocarbon prroduction. The compa
any is
planning a 12 well drrilling progra
am for 2012//13. DrillSea
arch Energyy, in a JV witth the BG Group,
has unde
ertaken deta
ailed shale co
ore studies along
a 5 mi2 of 3D sseismic.
with a cquiring 425
June, 2013 III-15

2. MARYBORO
M OUGH BAS
SIN
2.1 In
ntroduction
n
This
T small ba
asin in coas
stal Queenslland, locate d about 250
0 km north of Brisbane
e, has
two pote
ential gas sh
hale targets within the Cretaceous
C Maryboroug
gh Formatio
on. The bassin is
nexplored with only five conventiona
highly un al oil and gass exploration
n wells drille
ed to date. T
Three
large antticlines occu
ur within the onshore po
ortion of the basin, all off which have
e been drille
ed but
without conventional
c s.11
discoveries
2.2 Geologic
G Se
etting
The
T Maryborough Basin is a half-gra
aben bound
ded on the w
west by the Electra Fau
ult. It
300-mi2, Fig
a onshore area of 4,3
covers an gure III-7. Major folding and fau
ulting, along with
significan
nt erosion, occurred during the Cretaceous-P
C e establishin
Palaeogene ng the strucctural
setting of
o the basin.. Two main
n deposition
nal sequencces were exxamined in tthe Maryborrough
Basin, Fiigure III-8.12 The Duckin
nwilla Group
p, which con
ntains Late T
Triassic to m
mid-Jurassic non-
marine sediments, is
s not conside
ered prospe
ective for sha
ale oil or gas. Overlying
g the Duckin
nwilla
is the Grahams Cre
eek Formation which contains
c Late
e Jurassic to Cretaceo
ous (Neocom
mian)
strata, including the marine-depo
m osited Maryb
borough Forrmation.
2.3 Reservoir
R Properties
The
T Maryborrough Forma
ation (Neoco
omian-Aptian
n) appears to be the primary shale
e gas
unit in the Maryborou
ugh Basin. Up to 8,500
0 feet thick, it is the onlyy definitely m
marine unit iin the
basin. The unit consists
c primarily of mudstones, siltstone a
and sandsttone with m
minor
erate, limestone and co
conglome oal. Within the Marybo
orough Form
mation, the m
most prospe
ective
sub-units
s are the Go
oodwood Mu
udstone, the
e Woodgate
e Siltstone, a
and the Che
erwell Mudsstone,
Figure IIII-9. These sub-units
s ha
ave been de
escribed as a monotono
ous series off mudstoness with
minor sh
hales and silltstones. The mudstone
es are light tto dark greyy, slightly ca
alcitic, pyriticc and
silty. Ca
alcite veins are commo
on in the lo n.13
ower section The Goodwood M
Mudstone (S
Shale)
interval is
i approxima
ately 2,000 feet thick (gross)
( with a depth off 5,000 feett on anticlines to
15,000 fe
eet in the trroughs. TO s 2.0% and the shale iss within the dry gas ma
OC averages aturity
window (Ro > 1.5%)). The und
derlying Che
erwell Mudsttone (Shale) interval co
onsists main
nly of
black shale about 500 feet thic
ck (gross) an
nd ranges ffrom 8,000 ffeet deep o
on anticliness to a
d 17,000 fee
projected et deep in the
t troughs.. TOC ave
erages 2.0%
% and the shale is therrmally
mature (R
Ro >1.5%). The net organic-rich pay
y in the two shale intervvals is estima
ated at 250 ffeet.
June, 2013 III-16

Figure III-7. Maryborough Basin Prospeective Shale G

Gas Area
June, 2013 III-17

Figure III-8.
I Stratigrap
phy of the Ma ryborough Baasin
Figure III-9. Cross-Section of the Maryboroug

gh Basin and tthe Cretaceouus Maryborouggh Formation.
June, 2013 III-18

2.4 Resource
R Assessmen
A nt
ARI
A evaluated only the northern
n portion of the M
Maryborough
h Basin whe
ere geologicc data
exist. We 40-mi2 area could be p
W estimate that a 1,54 prospective for shale gas developm
ment.
Additiona he poorly constrained so
al areas in th outhern half of the basin may be pro
ospective but lack
sufficientt data for a rigorous
r reso
ource assess
sment.
The
T basal shales of the Maryboroug
M n (Cherwell a
h Formation ood shales) have
and Goodwo
entration of 111 Bcf/mi2 . The risked
an estimated gas in--place conce d gas in-place for the shales
in the Maryborough Basin is es
stimated at 64
6 Tcf, with a risked, te
echnically re
ecoverable sshale
gas resource of 19 Tcf,
T Table III-1B. With its
s high therm
mal maturity, the Marybo
orough Form
mation
is dry-gas prone and thus not pro
ospective for shale oil.
2.5 Recent
R Activity
Blue
B Energy Ltd., in a JV ach Energy, is awaiting
J with Bea g award of tthree explorration
permits in
i the northern portion of the Mary
yborough Ba ompanies are assessing the
asin. The co
potential of shale ga
as in this basin target with
w a view to
oward deterrmining a po
ossible shale
e test
well drilling location.14
1
June, 2013 III-19

3. PERTH
P BAS
SIN (WEST
TERN AUST
TRALIA)
3.1 In
ntroduction
n
The
T Perth Ba
asin, an activ
ve petroleum
m producing
g region, extends on- an
nd offshore in the
southwes
st of Westerrn Australia. The basin contains
c two nic-rich shale formationss, the
o main organ
Permian Carynginia and the Tria
assic Kockatea.
3.2 Geologic
G Se
etting
The
T Perth Ba
asin is a nortth-northwestt trending ha
alf-graben w
with relativelyy simple stru
ucture
that appe
ear favorable for shale oil and gas
s developme
ent. About h
half of the b
basin is onsshore,
covering an area of approximate m 2. The on
ely 20,000 mi nshore portio
on of the ba
asin containss two
eep sedimen
large, de ntary sub-ba
asins, the Da
andaragan a
and Bunburry troughs, sseparated b
by the
Harvey Ridge
R structu gure III-10.15
ural high, Fig
The
T Dandara
agan Trough, a large syn
ncline in norrthern Perth Basin, conta
ains the dee
epest,
thickest and
a most prrospective shale gas forrmations. S
Some 300 m
miles long an
nd up to 30 miles
wide, the
e Dandarag
gan Trough holds as much
m as 9 miles of S
Silurian to e
early Cretacceous
sedimenttary rocks. Much of the
e Dandaraga
an Trough iss too deep fo
or shale devvelopment, b
but its
northern area and th
he adjoining Beagle Rid
dge appear tto be within the prospecctive shale d
depth
window. The area is
s not structurally comple
ex but does h
have some ssignificant fa
aulting, Figure III-
11.16
Approximatel
A y 100 petroleum explorration wells h
have been d
drilled in the
e onshore po
ortion
of the Pe
erth Basin, resulting
r in the discovery of six con
nventional n
natural gas ffields, all loccated
within the an Trough. Proved rese
e Dandaraga erves to date
e total aboutt 600 Bcf witth small amo
ounts
of associiated oil in conventional
c reservoirs (Upper Perm
mian Dongarra Sandstone
e and Beeke
eeper
Formatio
on). Natura
al gas reco
overed from the deepe
er Permo-Trriassic rese
ervoirs (Dongara,
Mondarra
a, Yardarino
o, Woodada and Whiche
er Range) te
ends to be d
dry, reflectin
ng higher the
ermal
maturity and higher proportions of gas-pron
ne organic m
matter. CO2 is generallyy low, apart from
isolated readings
r of 4.1%
4 in the Woodada-1
W well and 3.9
9% in the Mo
ondarra-1 w
well.
June, 2013 III-20

Figure III-10. Perth

P Basin Prosp
pective Shale Gass and Shale Oil Areeas
S
JJune, 2013 III-

I 21
Fig
gure III-11. Thee Woodada-1 Deep
D Well Tessted the Carynnginia Shale
Tight
T sandsto
one reservo
oirs in the Perth
P e Eneabba and Yarrag
Basin include the gadee
formation
ns. These re
eservoirs we
ere sourced by the Triasssic and Permian source
e rock shaless and
coals, wh
hich modelin
ng indicates are within th
he oil window
w in the far north of the
e Perth Basin
n and
enter the
e gas window
w toward the
e southeast.
The
T sedimen
ntary sequen
nce in the Perth
P Basin comprises tthree successions: a) L
Lower
Permian largely argilllaceous glaciomarine to
o deltaic roccks (including
g the prospe
ective Caryn
nginia
Shale); b)
b Upper Pe
ermian nonm
marine and shoreline ssiliciclastics to shelf carrbonates; an
nd c)
Triassic to Lower Cretaceous
s nonmarine
e to shallo
ow marine siliciclasticss (including
g the
prospective Kockatea
a Shale) dep ntly regressivve phase, Fiigure III-12.17
posited in a predominan
Other
O marine
e shales in the
t Perth Ba
asin that we
ere evaluate
ed but rejectted as prospects
include the Triassic Woodada
W and Jurassic Cadda form
mations (too lean), the JJurassic Parmelia
(Yarragadee) Forma
ation (lacusttrine origin, located onl y in the offfshore), and
d the Cretacceous
South Pe
erth Formatio
on (immaturre, offshore only).
o
June, 2013 III-22

Figure III--12. Stratigrap

phy of the Pertth Basin Showwing the Prosppective Lowerr Triassic Kocckatea and Perrmian
Caryynginia Shaless
June, 2013 III-23

3.3 Reservoir
R Properties
The
T Lower Trriassic Kock
katea Shale is considere
ed the prima
ary oil source
e-rock as we
ell as
the main hydrocarbo
on seal in the
e basin. It co
onsists of da
ark shale, m
micaceous silltstone and m
minor
sandston
ne and limes
stone. The Kockatea Shale
S al thickens tto the south within the Perth
interva
Basin, re
eaching a maximum
m thic
ckness of 3,500
3 he Woolmullla-1 well, Figure III-13. The
ft in th
as recorded TOC valuess up to 8%.188
most organic-rich portion of this unit (Hovea Member) ha
Figure IIII-13. Structuraal Cross-Section of the Pertth Basin Showwing 2,300 ft tthick Kockateaa and 820 ft Thick
Carynginia Shales at Prrospective 5,0000 – 9,200 ft D
Depth
Core
C samples
s of the Hov
vea Memberr of the Kockkatea Shale
e, obtained ffrom the Hovvea-3
petroleum
m exploratio
on well, prov uality.19 The
vide data on reservoir qu e base of thiis unit conta
ains a
distinct organic-rich
o zone of foss
siliferous da
ark grey mud
dstone, sand
dy siltstone and shelly sstorm
beds. These
T sediments were deposited
d att a relativelyy low paleo--latitude in a shallow m
marine
environm
ment during the earliest stage of a marine transsgression. TOC of the
e Kockatea S
Shale
sampled from this we
ell ranged frrom 2.31% to 7.65% (avverage 5.6%
%), consisting
g of inertinite
e-rich
(Type III)) kerogen.20
June, 2013 III-24

The
T clay con
ntent of the
e Hovea Me
ember of the
e Kockatea Shale in th
he Hovea-3
3 well
ranged from
f 24% to
o 42% (averrage 33%). Separatelyy, AWE core TOC, 160 ft thick
ed a high-T
Hovea Member
M of th
he Kockatea
a Shale in th
he conventio
onal Redbacck-2 explorattion well in 2
2010,
but reporrted discouragingly high
h clay conten
nt. The Kocckatea is the
ermally matu
ure for gas in the
Dongara Trough, but less maturre and possiibly oil-prone
e on the Do
ongara Sadd
dle and the fflanks
of the Be
eagle Ridge
e. CO2 and N2 contents tested low
w (0.5% and pectively) from a
d 0.4%, resp
4,750 ft deep
d Kockattea Shale zo
one in the Do well.21
ongara-24 w
The
T Permian
n Carynginia
a Shale, a shallow
s -ma
arine deposiit present o
over much o
of the
northern Perth Basin
n. The Cary
ynginia Shalle conforma
ably underlie
es the Kocka
atea Shale. AWE
Limited recently
r repo
orted encourraging organ
nic-shale cha
aracteristicss for this 800
0 to 1,100 ft thick
unit. A deeper-wate
d er shale member occurs
s near the b
base of the Carynginia Shale, inclu
uding
thin interrbeds of silts
stone, sandstone, and lim
mestone.
Overlying
O the
e Carynginia water, shelf limestone u
a Shale is a shallow-w unit that con
ntains
conventio
onal gas res
servoirs. Co duced from tthe Carynginia Limestone at
onventional gas is prod
Woodada
a field, sealed by the overlying
o Koc
ckatea Shalle. CO2 and
d N2 tested fairly low (a
about
2.5%) fro
om a 8,000 ft
f Caryngia Fm
F zone in the Elegans--1 well.
While
W TOC va
alues of up to
t 11.4% ha
ave been reccorded, the T
TOC in the C
Carynginia S
Shale
averages
s 4%. The kerogen
k is Type
T III, dom
minated by i nertinite derrived from la
and plants. Gas-
prone, th
he Carynginia Shale is in the dry gas
g window over most of the Perth
h Basin. So
ource
rocks are
e less mature on the Dongara
D Sad
ddle and the
e flanks of th
he Beagle R
Ridge, wherre the
shale is partly
p replac
ced by shallo
ow-water, lim
mestone facie
es.
Geothermal
G gradients in
n the Perth
h Basin can
n be elevatted, ranging
g from 2.0°°C to
5.5°C/100 m, but the
t thermal gradient in
n the Dand
daragan Tro
ough is lesss extreme (2°to
2.5°C/100 m). Vitrin
nite reflectan
nce data show poor rel ationship with depth, w
with extreme data
scatter probably caus
sed by sube
ertinite and bitumen
b supp
pression.
3.4 Resource
R Assessmen
A nt
The
T prospecttive areas of the Beagle
e Ridge and
d Dandaraga
an Trough a
are located in the
northern portion of th
he Perth Bas
sin, where th nia and Kockkatea Shale source rockks are
he Caryngin
thick, dee
ep and therm
mally mature
e, Figure III-1
10.
June, 2013 III-25

An d 1,030-mi2 area is pro

A estimated ospective forr wet shale gas and co
ondensate in the
Kockatea
a Shale, de
efined using minimum and
a um depth crriteria (3,300-16,500 ft)) and
maximu
vitrinite reflectance
r (R % to 1.3%). A smaller 860-mi2 are
( o of 1.0% ea, up-dip frrom the wet gas
prospective area, de
efined by Ro values betw
ween 0.7% a
and 1.0% an
nd a minimum
m depth of 3
3,300
ars prospective for shale oil in the Ko
ft, appea ockatea Sha
ales. The de
eeper Caryng
ginia Shale h
has a
200 mi2. Additional porttions of the
dry gas prospective area of 2,2 e southern half of the Perth
Basin ma
ay be prospe
ective but ins
sufficient da
ata were ava ilable for a q
quantitative a
assessmentt.
The
T Permian
n Carynginia
a Shale has
s a resource
e concentra Bcf/mi2 with
ation of 94 B hin its
2,200-mi2 dry gas prospective area.
a It holds a risked gas in-placce of 124 Tccf, with a rissked,
ble shale gas resource of
o 25 Tcf, Ta
able III-1B.
The
T Triassic Kockatea Sh
hale has a resource con of 59 Bcf/mi2 within its 1,030-
ncentration o
mi2 wet gas
g prospec
ctive area. Including
I as
ssociated ga
as, the Kockkatea Shale has a risked
d gas
in-place of 36 Tcf, with
w a risked, technically
y recoverable
e shale gas resource off 7 Tcf, Tab
ble III-
1B. Sh
hale oil reso
ource conce
entrations in
n the Kocka
atea Shale are estimatted at 19 m
million
mi2 in the oil prospective
barrels/m arrels/mi2 in the conden
e area and 6 million ba nsate prospe
ective
area. Riisked shale oil in-place in the two prospective
p a
areas is 14 billion barre
els, with a rissked,
ble shale oil//condensate
e resource off 0.5 billion b
barrels, Table III-2A.
3.5 Recent
R Activity
In
n April 2010, AWE Limitted cut five cores
c e Carynginia Shale in itss Woodada Deep
in the
exploratio
on well in northern
n Perrth Basin. The
T compan
ny found the d lower zones to
e upper and
have high clay conte
ent. Howeve
er, the middle ective, with lower
e zone was considered more prospe
clay (value not repo
orted), 1 to 4%
4 TOC an
nd estimated
d 3 to 6% p
porosity at a depth betw
ween
7,780 an
nd 7,960 ft. Zones in th
he Upper and Middle Ca
arynginia we
ere successffully hydraullically
fractured
d in August 2012,
2 with gas
g being produced durring well flow
w-back and clean-up. AWE
estimated
d a total 13 to 20 Tcf of gas in-place
e on its perm
mit for the m
middle zone o
of the Caryn
nginia
Shale.22
June, 2013 III-26

Australian
A ind
dependent, Norwest Energy which produces oiil and gas frrom conventtional
fields in the Perth Basin,
B aluating the shale poten
is eva EP413 permit area, about 20
ntial on its E
miles norrth of the Wo
oodada Dee
ep well. Norw
west is partn
nered with AW
AWE and hass also farme
ed-out
an intere
est in EP413 to an Indian
n firm, Bhara
at PetroReso
ources. The
e companiess have comm
mitted
up to A$
$15 million for
f shale ex
xploration an
nd drilling. T
The consortiium drilled tthe Arrowsm
mith-2
well in Ju
une 2011 an
nd fractured five
f stages in shale and
d tight sand intervals. Inittial results d
during
flowback
k reported ga
as flows from
m all zones including
i the
e Upper and
d Middle Carrynginia and
d both
oil and ga
as flows from
m the Kocka
atea Shale.
June, 2013 III-27

4 CANNING
C BASIN
B (WE
ESTERN AU
USTRALIA
A)
4.1 In
ntroduction
n
The
T large, lig
ghtly explorred Canning
g Basin in n
northwestern
n Australia contains se
everal
organic-rrich shales, including the Laurel and Lowerr Anderson shales and
d the signifficant
Goldwyer Shale, Figure III-14.
Figure III-14. Cann

ning Basin Pro
ospective Shaale Gas and Shhale Oil Areass
Source: ARI, 2013.
June, 2013 III-28

4.2 Geologic
G Se
etting
The
T 234,000-mi2 Cannin 81,000 mi2 onshore) is Western A
ng Basin (18 Australia’s la
argest
sedimenttary basin. A broad in he Canning contains up to 11 miles of
ntracratonic rift basin, th
Ordovicia
an- to Creta
aceous-age sedimentary
s y rocks. The
e basin is sseparated fro
om the Ama
adeus
Basin to the east by a Precambrrian arch. A series of no
orthwest-trending, fault-bounded tro
oughs
within the
e basin, such as the Fitz
zroy Trough,, may hold d
deep shale re ential.23
esource pote
Conventional
C exploration in the Cann
ning Basin h
has focused on the Lenn
nard Shelf, w
where
petroleum
m occurs in the Hoya an
nd Anderson
n formationss. Only abo
out 60 wells have interse
ected
the princ
cipal source rocks in the
e basin, and most of the
e wells have been locate
ed on the up
plifted
terraces between th
he deeper troughs. Sou
urce rock d
data in the basin is lim
mited, but th
he oil
discoveriies on the Le
ennard Shelf are source
ed from Carb
boniferous a
and Devonia
an formation
ns. In
eas south of the Fitzroy Trough,
basin are T ons24.
the oil shows arre sourced ffrom Ordoviccian formatio
Figure III-15 shows the stratigraphy

s of the Cann
ning Basin. The primarry shale targ
get in
the basin is the orrganic-rich Ordovician Goldwyer F
Formation. The Carboniferous L
Laurel
on could nott be rigorou
Formatio usly assesse
ed due to iinsufficient d
data control. Other m
marine
shales in
n the Canning Basin, suc
ch as the Ca
alytrix Forma
ation, appear to be too le
ean.
4.3 Reservoir
R Properties
The
T Middle Ordovician
O Goldwyer
G as deposited mainly in open marine to
Formation wa
intertidal conditions. Highly fossiliferous, the formatio
on varies frrom mudsto
one-dominate
ed in
basinal areas
a to lime
estone-domiinated in pla
atform and tterrace area
as. The Goldwyer Form
mation
averages
s about 1,30
00 feet thick
k, reaching a maximum thickness o
of 2,414 feet in the Willara-1
well in the Willara sub-basin.25
The
T er Shale is dominated by mudston
Goldwye ne and carb
bonate, with
h ratios of tthese
compone
ents varying widely acro
oss the basin
n. The colo r of the shalle ranges fro
om grey-gre
een to
black, ind
dicating anoxic reducing
g conditions.
The
T Goldwye
er Shale co
ontains horiz
zons with h ntrations of the marine alga
high concen
Gloeocap
psomorpha prisca, cons
sidered to have
h excelle
ent source-rrock potential, similar to
o the
Amadeus nd Williston basins.26
s, Baltic, an wyer Shale is oil prone
The Goldw e on the up
plifted
platforms
s and terrace
es as shown
n by shallower exploratio
on wells, butt likely mature and gas p
prone
in the adjjacent deep troughs.
June, 2013 III-29

Figure III-15. Canning

g Basin Stratiigraphic Colum
mn
June, 2013 III-30

The
T depth of the Goldwy
yer Shale in the Canning
g Basin variies from gre
eater than 16
6,500
feet in the southern Kidson
K sub-basin to less
s than 3,000 plifted blocks of the Barbwire
0 ft on the up
gurra Terrac
and Jurg ces, Figure III-16. In the
e northern, very deep Fitzroy Trou
ugh and Gre
egory
wyer is at depths greaterr than 16,50 0 ft.
sub-basin, the Goldw
TOC
T in the Goldwyer
G Shale genera
ally ranges ffrom 1% to 5% (mean 3%), with ssome
values in o 10%, Figure III-17.27
n excess of The upp er memberr of the Go
oldwyer Sha
ale is
particularly rich, with
h TOC up to 6.40%. Rock-Eval pyro
olysis indica
ates this source rock is w
within
the oil window
w overr much of th
he southern
n Canning B he mid-basin platform. The
Basin and th
Kidson Sub-basin,
S where
w the Goldwyer
G dee
epens to 5,0
000 m, is in
n the dry ga
as window ((Ro >
1.3%). In
n general, th
he Goldwyerr Shale is in the oil wind
dow at depth
hs less than 7,200 feet, iin the
wet gas and conden
nsate window
w between 7,200
7 and 10
0,500 feet a
and in the drry gas windo
ow at
depths over 10,500 feet.
f 28
4.4 Resource
R Assessmen
A nt
ARI
A identified
d a prospecttive area in the Kidson sub-basin in
n the southe
ern portion o
of the
Canning Basin. He
ere, the Gold
dwyer Shale
e is thick, d
deep (7,200--16,500 feet), and therrmally
mi2 area ma
mature. An estimatted 22,860-m ay be prosp
pective for d
dry gas devvelopment w
with a
2
second 19,620-mi
1 area
a et gas and ccondensate. A smaller 14,900-mi2 area
prospective for we
appears prospective
e for shale oil.
o The bou
undaries an d depth con
ntours for th
he undrilled deep
trough arreas were ex
xtrapolated from
f informa
ation at adjo ining uplifts..
In
n the dry and wet gas
g prospec
ctive areass, the Gold
dwyer Shale
e has reso
ource
09 Bcf/mi2 and 67 Bcff/mi2, respe
concentrrations of 10 ectively. Inccluding asso
ociated gass, the
Goldwyer Shale in th
he Canning Basin has a risked sha le gas in-pla
ace of 1,227
7 Tcf, with rissked,
ble shale ga
as of 235 Tc
cf. The prosspective area
as for oil and condensate for
the Gold
dwyer Shale
e have reso
ource conce n barrels/mi2 and 10 m
entrations off 41 million million
mi2, respectively.
barrels/m Inclu
uding both the oil an
nd condensate prospecctive areas, the
Goldwyer Shale, ha
as risked shale oil/cond
densate in-p
place of 244
4 billion barrels, with rissked,
ble shale oil//condensate
e resources o
of 9.8 billion barrels.
June, 2013 III-31

Figure III-16. North-South

h Cross Section off the Canning Bassin
S
Source: Haines, 20044
JJune, 2013 III-

I 32
Figure
F III-17. TOC
T Values in the Ordoviciaan Goldwyer FFormation
Source: Ghoori and Haines, 2007

2
4.5 Recent
R Activity
Buru
B Energy, an Australian E&P co
ompany, hold
ds significan
nt exploratio
on permits in the
Canning Basin. Bu
uru reported e, organic-rrich shale frrom cores in the Yulleroo-1
d gas-mature
onal explora
conventio ation well drrilled in 1967
7 on permit EP-391. In
n 2010, Mitssubishi agreed to
fund an A$152.4
A million explorattion and dev
velopment p
program to e
earn a 50% interest in B
Buru’s
permits. The two co
ompanies ha
ave plans to
o evaluate tthe Goldwye
er Shale in the Kidson sub-
basin.
New
N Standarrd Energy (N al operator in the Cann
NSE), the other principa ning Basin, holds
on licenses covering 17,300 mi2 in the north
exploratio hern edge o
of the Kidso
on sub-basiin. In
Septemb
ber 2011, NS
SE formed a joint ventu
ure with Con
nocoPhillips to accelera
ate exploration of
the Goldw
wyer Shale. ConocoPhillips has ann
nounced tha
at it will fund an exploration program
m over
four yearrs for up to $US119 milllion. Three wells will be
e drilled verrtically and n
not fractured
d, but
will have a detailed program
p of mud e logs over the shale secction.
m logging, full coring and wireline
The first well in the program,
p the on August 8, 2012 and is proposed to be
e Nicolay #1,, was spud o
drilled to a target dep 0 feet.29
pth of 11,300
June, 2013 III-33

5. GEORGINA
G A BASIN
5.1 In
ntroduction
n
2
The
T Georgin
na Basin is a large, 125,000-mi
1 mainly une
explored ba
asin in Norrthern
Queensland border.30 T
Australia straddling the Northerrn Territory/Q e test wells have
Twenty-nine
been drilled, all in the southerrn third of the
t basin in
n the vicinitty of the ba
asin’s two m
major
depositio
onal centers,, the Toko an
nd Dulcie Sy
ynclines, Fig
gure III-18.
Figu
ure III-18. Geo
orgina Basin LLocation Map
Source: ARI, 2013.
June, 2013 III-34

5.2 Geologic
G Se
etting
The
T Georgia
an Basin is
s filled with
h sedimentss deposited
d in a resttricted anae
erobic
environm
ment which supports
s the
e accumulatiion and presservation off organic ma
atter. Two m
major
depocenters consisting of down
nfaulted bloc
cks and half-
f-grabens on
n the southe
ern margin o
of the
ontain up to 7,200 feet of Cambria
basin co n, Figure IIII-19.31 The basin
an to Devo nian section
shallows northwards
s with the de
epth to top of
o the Camb
brian Arthur Creek Shalle becoming
g less
than 3,00
00 feet along
g its northea
astern border.
Figure III-19.. Southern Georgina Basin Stratigraphic Column
Source: Ambrose annd Putnam, 20077, modified afterr Ambrose et al 22001
June, 2013 III-35

The
T lower se
ection of the
e Cambrian sediments in the soutthern synclin
nes contains the
Arthur Creek
C “hot” black
b shale, so called because
b of its high gam
mma ray re
esponse see
en on
electric lo
ogs. The thic
ckness of th
he “hot” shale, derived frrom seismicc interpretatio
on and well data,
thickens from west to
t east, Figu
ure III-20. Th
he shale secction is interrbedded with higher porosity
clastic an
nd carbonate
e intervals, somewhat
s co
omparable to
o the Bakke
en Shale in th
he U.S.
5.3 Reservoir
R Properties
The
T Arthur Creek Shalle is a Mid
ddle Cambrrian sequen
nce comprissed of dolo
omitic
sands/silts, shales, dolomites
d an
nd a basal black
b anoxic “hot shale”.32,33 Modern
n electric log
gs run
over the vertical section of the
e “hot shale
e” show log porosities up to 22% for the silt//sand
stringers, averaging 10% over the whole section. T
The larger A
Arthur Cree
ek Shale intterval
contains a high pro
oportion of carbonates
c and has low
w clay conttent. Logs a
also show w
water
saturations of less th
han 25% and
d intervals with
w natural frractures and
d small faultss.
Geoscience
G Australia
A stu
udied thirtee
en samples of core from
m four wellss in the Geo
orgina
Basin, mainly from th
he Lower Arrthur Creek Shale.
S The TOC of thesse samples ranged from
m 2%
to 16%, with an ave o 5.5%.34 The
erage TOC of T organic matter is co
omposed off oil and we
et gas
ype I and II kerogen.
prone Ty k
5.4 Resource
R Assessmen
A nt
The
T prospecttive oil and gas ur “Hot Shale” were con
g shale arreas for the Lower Arthu nfined
o 30 feet on the southerrn side of th
by a minimum shale thickness of he Dulcie and Toko syncclines
and by a vitrinite (Ro) value of 0.7%
0 de of these two depositional centerr. The
on the northern sid
south-eastern bound
dary of the Toko
T Synclin
ne prospectiive area is u
uncertain be
ecause of la
ack of
data, Figure III-22.
Oil
O and gas resources were
w estima
ated for two
o prospectivve areas: an
n eastern re
egion
covering the Dulcie Syncline an
nd surrounding area, an
nd a westerrn region co
overing the Toko
nding area. Total riske
Syncline and surroun ed wet and d
dry shale ga
as in-place ((in both syncclines
uding associated gas) is estimated at
and inclu a 67 Tcf, witth a risked, ttechnically recoverable sshale
gas resource of 13 Tcf,
T Table III--1C. Total risked shale oil and cond
densate in-p
place is estim
mated
at 25 billion barrels, with a risked, technicallly recoverab
ble shale oil and conden
nsate resourrce of
1.0 billion
n barrels, Ta
able III-2B.
June, 2013 III-36

Figure III-20.. East-West Crosss-Section of the Southern

S Georginaa Basin
S
Source: Ambrose andd Putnam, 2007
JJune, 2013 III-

I 37
Figure III-221. Log Response of Lowerr Arthur “Hot S

Shale”
Source: ARI 2012
June, 2013 III-38

Figurre III-22. Georg

gina Basin Pro
ospective Shaale Gas and S
Shale Oil Areass
Source: ARI, 2013.
5.5 Recent
R Acttivity
PetroFrontier
P r Corporation
n, a Canadia
an company , holds seve
eral exploratiion permits iin the
southern portion of th
he Georgina
a Basin. A fa Statoil Austrralia was esttablished in 2012
arm-in with S
with both
h companie
es committin
ng to spend
ding $25 m n exploration program. Two
million on an
horizonta
al exploration
n wells testin
ng the Lowe
er Arthur Cre
eek “hot shale” section w
were drilled iin the
first half of 2012. The
e Baldwin-2Hst1 and the MacIntyre
e-2H were drrilled in the g
gas-prone D
Dulcie
Trough. A third well, the Owen-3
3 well is currrently (Augu
ust 2012) drrilling its horrizontal leg in the
oil-prone
e area of the
e Arthur Cre
eek “hot shale” on the flank of the
e Toko Trou
ugh. The ve
ertical
section of
o the Owen-3 was drille
ed to a meas
sured depth
h of 3,870 fe
eet and overr 100 feet off core
was cut from
f the “ho
ot shale” and
d deeper Tho
orntonia Carrbonate secttion. The co
ore seeped o
oil on
retrieval and had ex
xtensive flore
escence thro
oughout. W
Wireline logging indicated
d over 80 fe
eet of
g formation. 35
hydrocarrbon bearing 3
June, 2013 III-39

6. BEETALOO
B O BASIN (N
NORTHERN
N TERRITO
ORY)
6.1 In
ntroduction
n
The
T Beetaloo Basin is a 14,000--mi2 rift bassin located in the No
orthern Terrritory,
approxim
mately 400 miles
m southeast of Darwin, Figure II I-23. The ba
asin outline is defined b
by the
Walton High
H to the north, the Helen
H Spring he south, and the Batte
gs High in th en Trough in the
east. Its western ma
argin is proje
ected to exte
end to the Da Arch.36
aly Waters A
Figure III-23. Beeetaloo Basin LLocation Map
Source: ARI, 2013
June, 2013 III-40

Well
W tests an
nd cores from twelve exploratory wells, of la
ate 1980s a
and early 1990s
vintage, have identified oil and ng organic-rrich shales in the Pre-Cambrian R
d gas bearin Roper
Group, Figure
F III-24. The Roperr Group is up
u to 9,000 feet thick in
n the centerr of the Bee
etaloo
Basin. Oil
O and gas shows
s have been obserrved in the K
Kyalla and M
Middle Velke
erri shales, a
along
with sho
ows in adjoining conven
ntional sand
dstone form
mations. The
ese two sha
ale formations, if
prospective, would be urce-rock forrmations in tthe world, on par
b some of the oldest prroducing sou
with sourrce rocks fou
und in Oman
n and Siberia
a.
Figure III-24. Beetalo

oo Basin Stratiigraphic Column
Source: Silverrman et al, 20055
June, 2013 III-41

6.2 Geologic
G Se
etting
The
T structura
al characteristics of the Beetaloo Ba
asin have been determined from gravity
gnetic data, along with recent reprrocessing an
and mag 2D seismic lines.
nd reinterprretation of 2
Latest in
nterpretations he basin as a rift basin337, formed during the la
s classify th ate Pre-Cam
mbrian
and unco
onformably overlying the western portion
p of th e McArthur Basin. Nortth-south tren
nding
faults, ob
bserved in th
he McArthurr Basin, are thought
t to e
extend into th
he Beetaloo
o Basin Figure III-
25. A 110 mile long regional gra
avity high bo
ounding the west side o
of the basin, the Daly W
Waters
Arch, is a thrust belt with over 3,000 feet of relief.
r
Figure III-25. East-West Cross-Section

C of the Beetalooo Basin
Source: Ambrose and Silverman, 200638
The
T Velkerri and the Kya
alla shales have
h dry gass, wet gas/ccondensate and oil wind
dows,
based prrimarily on fo
ormation depth. The drry gas prosp a is 2,480 mi2 for the Ve
pective area elkerri
nd 1,310 mi2 for the Ky
Shale an yalla Shale. The wet g
gas/condensate prospecctive area co
overs
2,130 mi2 for the Ve
elkerri Shale and 2,400 mi2 Kyalla S
Shale. The shale oil pro
ospective arrea is
2,650 mi2 for the Velkerri Shale and m 2 for the Kyyalla Shale, F
a 4,010 mi Figures III-26 and III-27.
June, 2013 III-42

Figure III-26. Beetaloo Basin Prospeective Velkerrii Shale Gas annd Shale Oil A
Areas
Source: ARI, 2013.
June, 2013 III-43

Figure III-277. Beetaloo Baasin Prospectiive Lower Kyaalla Shale Gass and Shale Oiil Areas
Source: ARI, 2013.
June, 2013 III-44

6.3 Reservoir
R Properties
The
T Velkerri Formation
F is
s composed of black org
ganic-rich sh
hales layered
d with gray-g
green
organic-lean shales and
a interbed
dded with thiin siltstone a
and sandstone units. Th
he Middle Ve
elkerri
Shale, a marine sha
ale deposite
ed in shallow to moderrate depth e
environmentts, is consid
dered
ed in the bassin.39 The d
prospective based on exploration wells drille depth of the prospective area
e Velkerri Sh
of Middle hale ranges from 3,300 ft
f on the Wa
alton High to
o 8,700 ft in the basin ce
enter.
anic-rich net pay of the Middle
The orga M Velke erages 100 feet across the basin.
erri Shale ave
The
T Middle Velkerri has a maximum total orrganic carbon (TOC) ccontent of 12%,
averaging 4%. The organic
o mattter is compo
osed of oil p rone Type I and II kerogens. The U
Upper
and Low
wer Velkerri shales,
s with TOC conte ave not been included in the
ents of less tthan 2%, ha
resource
e assessmen
nt.
The
T Kyalla Formation
F ha
as an upperr and a low
wer shale se
ection, separrated by the
e thin
Kyalla Sa
andstone. The combined section is 600 to 2,50
00 ft thick, w
with the Uppe
er Kyalla thin
nning
considera
ably from we
est to east. Only the Lo
ower Kyalla S
Shale has b
been included in the reso
ource
assessm
ment. Shale depth in the
e prospective
e area rang es from 3,30
00 feet in th
he north and
d east
to the 8,0
000 ft in the er. The Kyalla Shale is mature with
e basin cente h Ro values of 0.7% to 1.6%
dependin
ng on depth
h. While so
ome organic--rich section
ns of the Lo
ower Kyalla shale reach
h 9%
TOC in th
he basin cen
nter, the TOC
C of the sha
ale averagess 2.5%.
The
T prospecttive areas in
n the Velkerrri and Kyalla d using data from
a shales werre estimated
well logs, thermal ma
aturity mode
els and seism
mic data, Fig
gure III-28. The Middle Velkerri Shale is
d to be in the oil window
projected w (with Ro between 0.7%
% and 1.0%
%) from a depth of 3,300
0 ft to
5,000 ft. At depth
hs greater than 5,000
0 ft the M erri Shale enters the wet
Middle Velke
gas/cond
densate win
ndow with Ro between 1.0% and 1.3
3%. As the formation d
deepens to b
below
7,000 fee erri Shale enters the dry gas window
et, the Velke w with Ro > 1.3%.
The
T Lower Kyalla
K Shale
e is in the oil window from 3,300
0-5,000 feet, enters the
e wet
gas/cond
densate wind
dow below 5,000
5 feet, and
a reachess the dry ga
as window b
below 6,000 feet.
The area
as are constrained by the
t extent of
o the seism
mic data from
m which dep
pths to form
mation
were derrived. Pay th
hickness an
nd reservoir properties w
were estima
ated from we
ell log data,, with
emphasis
s on the mos
st recently drilled
d Shena
andoah-1A w
well.
June, 2013 III-45

Figure III-228. Thermal Maaturity Model for Jamison ##1 Well
Source: Silverrman and Ahlbraandt, 2011
6.4 Resource
R Assessmen
A nt
The
T risked drry, wet and associated
a shale
s gas in--place for the elkerri Shale is 94
e Middle Ve
ecoverable shale gas rresource of 22 Tcf, Table III-1C.
Tcf, with a risked, technically re The
hale oil/cond
risked sh densate in-p
place for the
e Middle Ve e is 28 billion barrels, w
elkerri Shale with a
risked, te
hale oil/cond ource of 1.4 billion barre
densate reso els, Table III--2B.
The
T Lower Kyalla
K Shale is calculated to have rissked dry, w
wet and asso
ociated shale
e gas
in-place of
o 100 Tcf, with
w a risked
d, technically
y recoverable
e shale gas resource off 22 Tcf, Tab
ble III-
1C. Th
he risked sh d condensatte in-place and the risked, techniccally recove
hale oil and erable
resource
e from the Lo 6 billion ba rrels and 3.3
ower Kyalla Shale are 65 3 billion barrrels respecttively,
Table III--2B.
June, 2013 III-46

6.5 Recent
R Activity
Falcon Oil and Gas Ltd
d has four exploration
e permits covvering most of the Bee
etaloo
Basin. In
n 2009, the company de
eepened the
e Shenando ell located in the
oah-1, a verrtical test we
center off the basin. Drilled
D in 2007 by PetroHunter Enerrgy, the orig
ginal well had
d a total dep
pth of
5,084 ft and
a intersec
cted the Upp
per Kyalla Shale.
S Falco n deepened
d the well to 8,900 ft thrrough
the Lowe
er Kyalla Shale, the Morroak Sandstone and the
e Velkerri Sh
hale with gass shows notted in
mation.40 The well was fractured
each form f an
nd tested in November 2
2011, with rreported gass and
condensa
ate flows fro
om the Kyalla
a and Velkerri shales.
Falcon entere
ed a Joint Venture with Hess in Julyy 2011, cove ajority of the area
ering the ma
in the exploration pe
ermits. Hess has committted up to $5
57.5 million to acquire 2
2,200 miles o
of 2D
seismic. Two seismic
c crews are currently de
eployed in th
he basin with
h plans to fin
nish surveyin
ng by
the end of
o 2012. Hes
ss has until June
J 2013 to commit to drilling five exploratory wells and e
earn a
62.5% in on’s explorattion permitss.41 Falcon iss seeking an
nterest in thrree of Falco nother partn
ner to
explore their fourth permit
p area which
w covers
s 700,000 accres.
REFERE
ENCES
1 PIRSA, 20011. “Cooper Bassin Fact Sheet.” Petroleum and Geothermal Divvision, Departmeent of Primary Inddustries and
Resourcees of South Australia, Governmeent of South Australia.
2 South Ausstralia Department of Mineral andd Energy Resources, 2010. “Peetroleum & Geothhermal in South Australia.” 17 pp.
3 Menpes, 2012.
2 “Emerging Continuous Gass Plays in the Coooper Basin, Soouth Australia.” S
Sandy Menpes, G
Government of SSouth
Australia,, Department forr Manufacturing, Innovation, Tradde, Resources aand Energy (DM
MITRE). APPEA 22012 Conferencce and
Exhibitionn
4 Apak, S.N., Stuart, W.J., Lemon,
L N.M. andd Wood, G., 1997. “Structural E
Evolution of the P
Permian–Triassicc Cooper Basin,
Australia:: Relation to Hyddrocarbon Trap Styles.”
S Americaan Association oof Petroleum Geologists, Bulletinn, vol. 81, p. 5333-555.
5 Lindsay, J., 2000. “South Australia Sourcee Rock Potential and Algal-Matteer Abundance, CCooper Basin, S
South Australia.” South
Australia Department of Primary
P Industriees and Resourcees, Report Bookk 2000/00032, 1772 p.
6 Smith, M., 1983. “Nature of o Source Materrials for Hydrocarbon in Cooper Basin, Australia.” American Asssociation of Petrroleum
Geologistts, Bulletin, vol. 67,
6 p. 1422-14288.
7 Beach Eneergy, presentatioon, 5-6 October 2010.
8 Beach Eneergy, 2010.
9 S Hillis, R.R., and Meyer, J.J.., 2006. “Constrraining Stress Magnitudes Usingg Petroleum
Reynolds, S.D., Mildren, S.D.,
Exploratioon Data in the Cooper-Eromang
C a Basins, Austraalia.” Tectonophhysics, vol. 415, p. 123-140.
10 McGowann et al., 2007.
11 Stephensson, A.E. and Buurch, G.J., 2004. “Preliminary Evvaluation of the P
Petroleum Potenntial of Australia’s Central Easteern
Margin.” Geoscience Ausstralia Departmeent Of Industry, Tourism
T & Resoources. Geoscieence Australia Reecord 2004/06, 117 p.
June, 2013 III-47

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Capricorn and nnorthern Tasmann basins: results of
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13 Lane, P.B
B., 1983. “Geoloogy and Petroleuum Potential of ATP
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Unpublishhed report, 30 p.
14 Blue Enerrgy Ltd, 2012. “Q
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15 Cadman, S.J. Pain, L. and Vuckovic, V., 1994.
1 “Australiaan Petroleum Acccumulations Reeport 10: Perth B
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16 Cawood, P.A. and Nemchhin, A.A., 2000. “Provenance Reecord of a Rift B Basin: U/Pb Agess of Detrital Zircoons from the Perth
Basin, Weestern Australia..” Sedimentary Geology, vol. 1334, p. 209-234.
17 Mory, A.J. and Iasky, R.P
P., 1996. “Stratiggraphy And Struccture Of The Onnshore Northern Perth Basin Weestern Australia.””
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18 Thomas, B.M., 1979. “Geeochemical Anallysis of Hydrocarbon Occurrencees in Northern P
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19 Nabbefeldd, B., Grice, K., Schimmelmann,
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20 Dawson, D., Grice, K., annd Alexander, R., 2005. “Effect of
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21 Boreham,, C.J. and Edwards, D.S., 2008. “Abundance annd Carbon Isotoppic Compositionn of Neo-Pentanee in Australian N
Natural
Gases.” Organic Geocheemistry, vol. 39, p. 550-566.
22 AWE, annnouncement, Noovember 9, 20100.
23 Cadman, S.J. Pain, L., Vuuckovic, V., and le Poidevin, S.R
R., 1993. “Austrralian Petroleum
m Accumulations Report 9: Cannning
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24 Ghori, K.A
A.R. and Hainess, P.W., 2007. “P
Paleozoic Petroleum Systems off the Canning Baasin, Western A
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Americann Association of Petroleum Geoloogists, Search and
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25 Haines, P.
P W., 2004. “Deepositional Faciees And Regional Correlations Off The Ordoviciann Goldwyer And Nita Formationss,
Canning Basin, Western Australia, with Im
mplications for Petroleum
P Explorration.” Westernn Australia Geological Survey, R
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26 Foster, C. B., O’Brien, G. W., and Watsonn, S. T., 1986, Hydrocarbon
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Terrace, Canning
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27 Ghori, K.A Paleozoic Petroleum Systems off the Canning Baasin, Western A
A.R. and Hainess, P.W., 2007. “P Australia: A review
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Americann Association of Petroleum Geoloogists, Search and
a Discovery Arrticle No. 10120, 7 p.
28 New Sataandard Energy, 2011.
2 “Potential Liquids Rich Zone Identified in G
Goldwyer Projecct”. ASX Announncment, Februaryy 10,
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29 New Stanndard Energy, 20012. “Nicolay #1 Weekly Drilling Update” ASX A
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Pegum, D.M.
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31 Dunster JN,
J Kruse PD, Duffett ML and Am mbrose GJ, 20077. “Geology andd resource potenntial of the southeern Georgina Baasin.”
Northern Territory Geologgical Survey, Diggital Information Package DIP0007.
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32 Bennett, P.J.,
P Philpchuk, Freeman, A. 2010. “Arthur Creeek “Hot Shale”: A Bakken Unconnventional Oil Annalogy in the Geoorgina
Basin of Northern
N Territorry, Australia.” Am
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m Geologists, Search and Discoovery Article # 800125,
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33 Volk et al, 2005.
34 Vu Thi Annh Tiem, Brian Horsfield
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Australia:: preliminary insights, Geosciencce Australia Reccord 2011/10, 399pp.
35 PetroFronntier Corp, 2012. “PetroFrontier Corp.
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36 J Mather, T.J., and Berg, E. 22005. “No Fuel LLike an Old Fuel: Proterozoic Oill and
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37 Silvermann, M. and Ahlbraandt, T. 2011. “M
Mesoproterozoic Unconventiona l Plays in the Beeetaloo Basin, A
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38 Ambrose and Silverman, 2006. “Onshoree Hydrocarbon Potential of the B eetaloo Sub-Bassin.” Northern Teerritory Geologiccal
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39 Warren ett al, 1998. “Proteerozoic Source Rocks:
R Sedimentology and Orgaanic Characteristtics of the Velkeerri Formation,
Northern Territory, Austraalia.” AAPG Bulletin Vol 82 (19998), Issue 3, Pagges 442-463
40 Mesoproterozoic Unconventiona l Plays in the Beeetaloo Basin, A
Silvermann, M. and Ahlbraandt, T. 2011. “M Australia: The Woorld’s
Oldest Peetroleum Systemms.” American Asssociation of Pettroleum Geologi sts (AAPG), Seaarch and Discovvery Article #102295,
January 21,
2 2011.
41 Falcon Oiil and Gas, 20122. “Falcon Oil and Gas Ltd. Annoounces Australiaan Operational U
Update.” August 20, 2012
June, 2013 III-49

IV. Northern South America EIA/ARI World Shale Gas and Shale Oil Resource Assessment
IV. NORTHERN SOUTH AMERICA
SUMMARY
Northern South America has prospective shale gas and shale oil potential within marine-
deposited Cretaceous shale formations in three main basins: the Middle Magdalena Valley and
Llanos basins of Colombia, and the Maracaibo/Catatumbo basins of Venezuela and Colombia,
Figure IV-1. The organic-rich Cretaceous shales (La Luna, Capacho, and Gacheta) sourced
much of the conventional gas and oil produced in Colombia and western Venezuela, and are
similar in age to the Eagle Ford and Niobrara shale plays in the USA. Ecopetrol,
ConocoPhillips, ExxonMobil, Shell, and others have initiated shale exploration in Colombia.
Colombia’s petroleum fiscal regime is considered attractive to foreign investment.
Figure IV-1: Prospective Shale Basins of Northern South America
Source: ARI 2013
June, 2013 IV-1

For the current EIA/ARI assessment, the Maracaibo-Catatumbo Basin was re-evaluated
while new shale resource assessments were undertaken on the Middle Magdalena Valley and
Llanos basins. Technically recoverable resources (TRR) of shale gas and shale oil in northern
South America are estimated at approximately 222 Tcf and 20.2 billion bbl, Tables IV-1 and IV-
2. Colombia accounts for 6.8 billion barrels and 55 Tcf of risked TRR, while western Venezuela
has 13.4 billion barrels and 167 Tcf. Eastern Venezuela may have additional potential but was
not assessed due to lack of data.
Colombia’s first publicly disclosed shale well logged 230 ft of over-pressured La Luna
shale with average 14% porosity. More typically, the black shales within the La Luna and
Capacho formations total about 500 ft thick, 10,000 ft deep, calcareous, and average 2-5%
TOC. Thermal maturity comprises oil, wet-gas, and dry-gas windows (Ro 0.7-1.5%). Shale
formations in the Llanos and Maracaibo/Catatumbo basins have not yet been tested but also
have good shale oil and gas potential.
INTRODUCTION
As first highlighted in EIA/ARI’s 2011 assessment, Colombia and Venezuela both have
excellent potential for shale oil and gas.. In particular, Colombia’s shale potential appears
considerably brighter today based on the results of initial shale drilling as well as the entry of
major oil companies (ConocoPhillips, ExxonMobil, and Shell) as well as several smaller
companies.
Colombia’s Agencia Nacional de Hidrocarburos (ANH) regulates oil and gas exploration
and development. The country’s model contract for unconventional gas includes 8-year
exploration and 24-year production terms. Preferential terms are in place for shale gas
investment, including a 40% reduction in royalties and higher oil prices. In 2011 the National
University of Colombia conducted a shale gas resource evaluation for ANH, estimating a total
33 Tcf of potential in the Eastern Cordillera, Eastern Llanos and Caguan-Putumayo regions.
The study and methodology have not been disclosed; apparently shale oil resources were not
assessed. ANH conducted Colombia’s first auction of shale gas blocks in 2012.
June, 2013 IV-2

Table IV-1: Northern South America Shale Gas Reservoir Properties and Resources.
Middle Magdalena Valley Llanos Maracaibo/Catatumbo
Basic Data
2
(13,000 mi ) (84,000 mi ) (23,000 mi )
Shale Formation La Luna/Tablazo Gacheta La Luna/Capacho
Geologic Age U. Cretaceous U. Cretaceous U. Cretaceous
Depositional Environment Marine Marine Marine
2
Prospective Area (mi ) 2,390 200 1,820 7,280 4,290 5,840
Physical Extent
Organically Rich 1,000 1,000 600 1,000 1,000 1,000

Thickness (ft)
Net 300 300 210 500 500 500
Interval 3,300 - 16,400 3,300 - 10,000 13,000 - 16,400 5,000 - 15,000 5,500 - 15,000 6,000 - 15,000
Depth (ft)
Average 10,000 8,000 14,500 10,000 11,000 12,000
Highly Highly
Reservoir Pressure Mod. Overpress. Normal Normal Normal
Properties
Reservoir
Average TOC (wt. %) 5.0% 5.0% 2.0% 5.0% 5.0% 5.0%
Clay Content Low Low Low Low Low Low
Gas Phase Assoc. Gas Wet Gas Assoc. Gas Assoc. Gas Wet Gas Dry Gas
Resource
2
Risked GIP (Tcf) 117.8 16.8 18.2 183.0 264.4 522.6
Table IV-2: Northern South America Shale Oil Reservoir Properties and Resources.
Middle Magdalena Valley Llanos Maracaibo/Catatumbo
Basin/Gross Area
Basic Data
2 2 2
(13,000 mi ) (84,000 mi ) (23,000 mi )
Shale Formation La Luna/Tablazo Gacheta La Luna/Capacho
Geologic Age U. Cretaceous U. Cretaceous U. Cretaceous
2
Prospective Area (mi ) 2,390 200 1,820 7,280 4,290
Physical Extent
Organically Rich 1,000 1,000 600 1,000 1,000

Thickness (ft)
Net 300 300 210 500 500
Interval 3,300 - 16,400 3,300 - 10,000 13,000 - 16,400 5,000 - 15,000 5,500 - 15,000
Depth (ft)
Average 10,000 8,000 14,500 10,000 11,000
Highly Highly
Reservoir Pressure Mod. Overpress. Normal Normal
Properties
Reservoir
Average TOC (wt. %) 5.0% 5.0% 2.0% 5.0% 5.0%
Thermal Maturity (% Ro) 0.85% 1.15% 0.85% 0.85% 1.15%
Clay Content Low Low Low Low Low
Oil Phase Oil Condensate Oil Oil Condensate
Resource
2
OIP Concentration (MMbbl/mi ) 57.0 26.1 28.0 92.3 41.0
Risked OIP (B bbl) 76.3 2.9 12.6 235.1 61.6
Risked Recoverable (B bbl) 4.58 0.18 0.63 11.75 3.08
June, 2013 IV-3

Venezuela’s government and oil companies have not disclosed shale oil or shale gas
exploration activities, although the potential in western Venezuela appears to be large and of
high quality. Overall, three main basins are present in northern South America that contain
prospective marine-deposited shales and were assessed in this report, Figure IV-2. These
basins include:
 Middle Magdalena Valley Basin (Colombia): The focus of shale exploration leasing
and drilling activity in the region thus far, the MMVB near Bogota also is Colombia’s
main conventional onshore production area. It contains thick deposits of the organic-rich
Cretaceous La Luna Formation, mostly in the oil to wet gas windows.
 Llanos Basin (Colombia): This large basin in eastern Colombia has prospective
Gacheta Formation source rock shales of Cretaceous age that are equivalent to the La
Luna Fm. TOC and Ro generally appear low, but the western foothills region may be
richer and more thermally mature.
 Maracaibo/Catatumbo Basin (Venezuela and Colombia): One of South America’s

richest petroleum basins, the Maracaibo (Venezuela) and Catatumbo (Colombia) basins
have extensive oil and gas potential in thick, widespread Cretaceous La Luna Shale.
 A fourth basin, the Putamayo Basin in southern Colombia, also may contain shale
potential but was not assessed due to lack of data. The Putamayo contains organic-rich
Cretaceous shales in the Macarena Group.1 While relatively shallow (3,000 ft) in this up-
thrusted basin-edge location, the Macarena shales deepen towards the center of the
basin where they may become less faulted. Hydraulic fracturing already is being used in
the Putamayo Basin for conventional reservoirs.2
June, 2013 IV-4

Figure IV-2: Stratigraphic Chart Showing Source Rocks And Conventional Reservoirs In Northern
South America.
COLOMBIA & VENEZUELA BASINS
BASIN MID MAGDALENA VALLEY MARACAIBO-CATATUMBO LLANOS
ERA PERIOD EPOCH F O R M A T I O N
QUATERNARY Pleistocene Alluvium Alluvium Necesidad
Pliocene Mesa
Guayabo Guayabo
Real
Miocene Leon Leon
Colorado
CENOZOIC
Mugrosa
Oligocene Carbonera Carbonera
TERTIARY
Esmeraldas
Eocene
La Paz Mirador Mirador
Los Cuervos Los Cuervos
Paleocene Lisama Barco
Barco
Catatumbo
Umir Mito Juan Guadalupe
Upper La Luna
Colon Gacheta
La Luna Une
Simiti Capacho
Aguardiente
CRETACEOUS
Tablazo
MESOZOIC
Apon
Paja
Lower
Rosablanca Rio Negro
Cumbre
Arcabuco/
JURASSIC Giron Giron
TRIASSIC
Source Rock Conventional Reservoir Absent/Unknown

Source: ARI 2013
June, 2013 IV-5

1. MIDDLE MAGDALENA VALLEY BASIN (COLOMBIA)
1.1 Introduction and Geologic Setting
The 13,000-mi2 Middle Magdalena Valley Basin (MMVB) is a north-south trending inter-
montane basin in central Colombia, situated between the Eastern and Central cordilleras and
located 150 miles north of Bogota, Figure IV-3. The MMVB is Colombia’s most explored
conventional oil and gas producing basin, with over 40 discovered oil fields that produce mainly
from Tertiary sandstone reservoirs. Although within the Andes Mountains region, with its
complex tectonics including numerous thrust and extensional faults, the interior of the MMVB
has simpler structure with relatively flat surface topography, Figure IV-4.3 The western side of
the basin is structurally more complex and overthrusted, Figure IV-5.4
Figure IV-3: Middle Magdalena Valley Basin, Shale-Prospective Areas and Shale Exploration
Source: ARI 2013
June, 2013 IV-6

Figure IV-4: Schematic Cross-Section of the Middle Magdalena Valley Basin Showing U. Cretaceous Umir
and La Luna And L. Cretaceous Simiti Shales Totaling 750-1,000 Ft Thick (Correlate With Eagle Ford Shale).
Source: Sintana Energy, Q3 2012
Figure IV-5: Schematic Cross-Section of Western Margin of the Middle Magdalena Valley Basin in Central
Colombia, Showing Thrusted Fault Blocks with La Luna Shale.
Source: Platino Energy, 2013
The Cretaceous La Luna Formation is the principal source rock in the MMVB. A marine-
deposited black shale, the organic-rich La Luna was formed in a widespread epicontinental sea
and is time-equivalent (Santonian) with the Niobrara Shale in the USA.5 However,
sedimentation and facies distribution of the La Luna Fm were strongly controlled by the paleo-
topography, while post-depositional tectonics caused erosional events that truncated its
thickness in places. For example, much of the Campanian and lower Maastrichtian sections
were eroded in the southern Upper Magdalena Valley and Putumayo Basins.6
The La Luna Formation comprises three members: the Salada, Pujamana, and
Galembo.7 The most organic-rich (3-12% TOC) is the 150-m thick Salada Member, which
consists of hard, black, thinly bedded and finely laminated limy shales (40% CaCO3), along with
thin interbeds of black fine-grained limestone. Pyrite veins and concretions are common, as are
June, 2013 IV-7

planktonic (but not benthonic) foraminifera and radiolaria. The lower-TOC Pujamana Member
consists of gray to black, thinly bedded and calcareous shale (43% CaCO3). The 220-m thick
Galembo Member has moderate TOC (1-4%) and also consists of black, thinly bedded,
calcareous shale, but with only thin argillaceous limestone interbeds. The Galembo also has
abundant blue to black chert beds.8 The underlying Cretaceous Tablazo/Rosablanca Fm,
about 480-920 ft thick, also contains high TOC (2-8%) that is in the oil to wet gas windows (Ro
0.6% to 1.2%).
The 1,000-ft thick Cretaceous La Luna Formation ranges from 3,000 ft to slightly over
15,000 ft deep across the Middle Magdalena Valley Basin. However, the La Luna is truncated
in places by an erosional unconformity, which juxtaposes Paleogene La Paz Fm on top, Figure
IV-6. The La Luna shale is organic rich (average 5%) with mainly Type II kerogen.9 We
mapped a larger (2,390-mi2) oil-prone prospective window for the La Luna shale, with a much
smaller (200 mi2) wet gas window to the south (Ro 0.7% to 1.2%).
Calgary-based Canacol Energy Ltd. has noted that the La Luna and Tablazo/
Rosablanca shales are 4,000 to 12,000 ft deep across its blocks in the MMVB . The La Luna
ranges from 1,200 to 1,800 ft thick while the underlying Tablazo/Rosablanca is 480 to 920 ft
thick. TOC of the two units ranges from 2% to 8% and is mostly at oil-prone thermal maturity
(Ro 0.6% to 1.2%). Shale porosity is estimated by Canacol to be 3% to 14%.10 In 2012 Canacol
drilled the Mono Arana-1 well on its VMM 2 block, where it is partnered with ExxonMobil. The
well tested shallow conventional targets as well as deeper shale and carbonate potential in the
La Luna and Tablazo oil source rocks. Heavy mud, up to 16.5 pounds per gallon, was required
to safely drill across these over-pressured shales, indicating they are at nearly twice the normal
hydrostatic pressure. The well encountered the top of the La Luna Formation at a depth of
9,180 ft and penetrated 760 ft into the formation, logging oil and gas shows across the entire
shale interval. Logs run across the La Luna reportedly indicated 230 ft of potential high-quality
net oil pay with 14% average porosity.
June, 2013 IV-8

Figure IV-6: Seismic Line in the Middle Magdalena Valley Basin Showing Cretaceous La Luna and Simiti
Shales Truncated by Erosional Unconformity.
Source: Sintana Energy, Q3 2012
According to Texas-based Sintana Energy the La Luna Formation averages about 1,500
ft thick (gross), has 950-1,900 ft of net pay, 5-10% TOC, 15% effective porosity, and favorably
low 17% clay content (should be quite brittle) on the company’s blocks in the western MMVB.
The underlying Tablazo Formation averages about 600 ft thick (gross), has 150-450 ft of net
pay, 5.5-7.0% TOC, 8% effective porosity, and higher 30% clay content. The La Luna in
Sintana’s area is in the oil window (Ro 0.7-1.0%), while the Tablazo is in the oil to wet gas
windows (Ro 1.1%). The pressure gradient ranges from 0.55-0.80 psi/ft in the La Luna to 0.65
psi/ft in the Tablazo.11
The risked, technically recoverable shale gas and shale oil resources in the combined
Cretaceous La Luna and Tablazo shales of the Middle Magdalena Valley Basin are estimated to
be 18 Tcf and 4.6 billion barrels, out of risked shale gas and shale oil in-place of 135 Tcf and 79
billion barrels. By comparison Ecopetrol has estimated the MMV Basin has 29 Tcf of shale gas
potential (methodology not disclosed, nor was oil potential noted).
June, 2013 IV-9

1.4 Recent Activity
A number of companies -- including Ecopetrol, ConocoPhillips, ExxonMobil, Nexen, and

Shell -- have initiated shale oil and gas exploration programs at existing conventional oil and
gas lease positions in Colombia during the past two years. Activity has been concentrated in
the Middle Magdalena Valley Basin, close to the Bogota market. More than 12 vertical and
horizontal shale exploration wells were planned for 2012, including several re-entries.
State-owned Ecopetrol S.A., which controls about one-third of the oil and gas licenses in
Colombia, first announced its shale exploration program in early 2011 and drilled the La Luna-1
stratigraphic test in the MMVB later that year (results not disclosed). Ecopetrol already has
been drilling horizontal wells in the MMVB for non-shale targets during the past several years,
providing a good foundation for future horizontal shale development in the basin.12
Canacol holds three conventional exploration licenses in Colombia, which the company
estimates have a total 260,000 gross acres with shale oil potential. The company has disclosed
a Mean Estimate of 2.9 billion barrels of recoverable resource potential within their lease
position. In recent months Canacol has signed separate joint-venture agreements with
ConocoPhillips, ExxonMobil, and Shell to conduct shale exploration within Canacol’s acreage.
These companies plan to drill a total of 19 shale exploration wells at an estimated cost of $123
million. ConocoPhillips expects to drill its first exploration well to test the La Luna Shale in the
second quarter of 2013.13 Canacol continues to review the shale potential of two of its other
blocks.
Nexen was one of the first companies to report exploring for shale gas in Colombia. The
company reports it holds several shale blocks in Colombia for a total 1.5 million acres with shale
gas potential.14 In late 2011 Nexen began drilling the first of four planned shale gas wells.
These wells, located in Sueva and Chiquinquira blocks in the Sabana de Bogota high savannah
plateau of the Eastern Cordillera mountain range, reportedly target the La Luna Formation. No
further details are available.
Sintana Energy has reported that its third-party consultant estimated 210 million bbl of
prospective recoverable resources in shale formations at the company’s VMM-37 block in the
MMVB, which cover 44,000 acres (Mean Estimate). Sintana estimated initial horizontal well
costs at about $13 million.
June, 2013 IV-10

2. LLANOS BASIN (COLOMBIA)
The large (84,000-mi2) Llanos Basin, located in eastern Colombia, has only recently
become a focus of shale exploration and thus is less well understood than the Middle
Magdalena Valley Basin, Figure IV-7. The Gacheta Fm shale source rocks are equivalent to
the La Luna Fm in the MMV and Maracaibo/Catatumbo basins. The northeast-trending Llanos
Basin represents the northern extent of the Sub-Andean Mountain Belt. Figure IV-8 shows the
generally simple geologic structure in the interior of the Llanos Basin, as well as the
overthrusting on the western margin.
Figure IV-7: Llanos Basin Showing Shale-Prospective Area.
Source: ARI 2013
June, 2013 IV-11

Figure IV-8: Schematic Cross Section of the Llanos Basin in Colombia
Source : ANH, 2007
Up to 30,000 ft of Cambrian to Ordovician strata are unconformably overlain by thick

Cretaceous marine shale deposits. These in turn were partially eroded by uplift during the early
Tertiary. Other potential source rocks in the Llanos Basin include the Cretaceous Los Cuervos
Fm and Tertiary shales (Carbonera and Leon formations).15 Conventional reservoirs are found
in the Paleogene Carbonera and Mirador sandstones as well as Cretaceous sandstones.
The Cretaceous Gacheta Fm, time-equivalent to the La Luna Fm and averaging 600 ft
thick, is the principal source rock in the Llanos Basin. The Gacheta reaches a depth of more
than 15,000 ft along the basin’s western margin, shoaling to only 2,000 feet in the east. The
central axis has the Gacheta shale ranging from 4,000 to over 10,000 ft deep.
The 1,820-mi2 depth-prospective area is entirely in the oil window. The effective source
rock thickness of the Gacheta shale ranges from 150 to 300 ft (average 210 ft net), with TOC of
1% to 3% consisting of Type II and III kerogen.16 Thermal maturity of the Gacheta ranges from
the oil to wet gas windows, with Ro ranging from 0.3% in the shallow east to 1.1% in the deeper
western foothills region where the shale oil potential is greatest.17 Porosity is uncertain but
assumed to be relatively high (7%) based on initial data on the correlative La Luna Shale in the
MMVB. The basin is slightly over-pressured, averaging about 0.5 psi/ft gradient.
June, 2013 IV-12

Risked, technically recoverable shale gas and shale oil resources in the Llanos Basin
are estimated to be 2 Tcf of associated shale gas and 0.6 billion barrels of shale oil and
condensate, out of risked shale gas and shale oil in-place of about 18 Tcf and 13 billion barrels,
Tables IV-1 and IV-2. Within the prospective area, the play has a moderate resource
concentrations of about 40 Bcf/mi2 and 28 million bbl/mi2.
2.4 Recent Activity
No shale exploration leasing or drilling has been reported in the Llanos Basin. Sintana
Energy previously mentioned the shale potential of its leases in the Llanos Basin in the
company’s 2011 investor presentation.
3. MARACAIBO-CATATUMBO BASIN (VENEZUELA, COLOMBIA)
The Maracaibo Basin extends over 23,000 mi2 in western Venezuela and eastern
Colombia, the latter area known locally as the Catatumbo Sub-basin, Figure IV-9.18 The
Maracaibo/Catatumbo Basin contains a rich sequence of organic-rich marine-deposited
Cretaceous shales that are the principal source rocks for prolific conventional fields.19 These
Cretaceous shales, especially the La Luna and Gapacho, appear to be prospective targets for
shale oil and gas exploration.
Depth to the Precambrian-Jurassic basement in the Maracaibo Basin reaches over

20,000 feet in southern Lake Maracaibo and its onshore eastern edge, Figure IV-10. On the
west side of the basin, basement and Cretaceous shale deposits become shallower again,
Figure IV-11. Depth to the La Luna Fm ranges from less than 5,000 to over 15,000 feet,
generally deepening from northeast to southwest. The eastern edge of the shale play is limited
by maximum 15,000-ft depth, inferred from the structure of the Late Jurassic basement.20
The Catatumbo Sub-basin, located on the rugged east flank of the Andes in eastern
Colombia, has similar shale targets but is structurally more complex than the rest of the
Maracaibo Basin, with thrust faulting in the west and less severe wrench-faulting in the east,
Figure IV-12.21 Much like the northern Maracaibo Basin, the Catatumbo Sub-basin has
numerous conventional oil fields.
June, 2013 IV-13

Figure IV-9: Prospective Area for Shale Exploration in the Maracaibo/Catatumbo Basin.
Source : ARI, 2013
June, 2013 IV-14

Figure IV-10: Seismic Time Section of the Maracaibo Basin in Western Venezuela.
Modified from Escalona and Mann, 2006
Source : ARI, 2013
June, 2013 IV-15

Figure IV-10: Schematic Cross-Section Showing Depth to Cretaceous Source Rocks in the Maracaibo Basin,
Western Venezuela.
Modified from Escalona and Mann, 2006
Figure IV-12: Schematic Cross-Section of the Catatumbo Sub-Basin in Eastern Colombia.

Modified from Yurewicz et al., 1998
June, 2013 IV-16

La Luna Formation. The Maracaibo-Catatumbo Basin hosts some of the world’s

richest source rocks and conventional oil and gas reservoirs. The Late Cretaceous
(Cenomanian-Santonian) shale of the La Luna Formation, the primary source rock in the basin22
and time-equivalent with the Eagle Ford Shale in Texas, appears to be the most prospective
target for shale oil and gas exploration. The black calcareous La Luna Shale ranges from 100
to over 400 feet thick across the basin, thinning towards the south and east. 23,24
Total organic carbon (TOC) varies across the basin, with values ranging from 3.7% to
5.7% in the northwest to 1.7% to 2% in the south and east. Maximum TOC values can reach
16.7%. A large portion of this shale-gas-prospective area includes part of Lake Maracaibo itself.
ARI chose to include this submerged area because water depths are shallow (less than 100
feet) and there are numerous conventional production platforms that could provide access to
shale drilling and development.
Thermal maturity of the La Luna Fm increases with burial depth from west to east across
the Maracaibo Basin, from less than 0.7% Ro to over 1.7% Ro southeast of Lake Maracaibo.25
Vitrinite reflectance data indicate the unit is mainly in the oil generation window, with a narrow
sliver of dry-gas maturity in the east. Note that no significant free gas accumulations have been
discovered in the Maracaibo Basin; all natural gas production has been associated gas.
In the much smaller Catatumbo Sub-Basin of Colombia, the La Luna Fm is about 200 ft
thick, comprising dark-gray, laminated, limey mudstones and shales with high TOC averaging
4.5% (maximum 11%), mainly Type II with some Type III kerogen.26 Total organic carbon in
core samples reaches a maximum of 11.2% in the La Luna, but more typically averages a still
rich 4 to 5% TOC. Figure IV-13 shows a slight increase in TOC concentration towards the base
of the La Luna Fm in the Cerrito 1 well, southeastern Catatumbo Sub-basin.
The La Luna is at relatively shallow depth in the Catatumbo Sub-basin, ranging from
27
6,000 to 7,600 feet. Based on available vitrinite samples, thermal maturity ranges from 0.85
to 1.21% Ro, with generally higher reflectance in the central and northern areas of the basin.
Samples from the Cerro Gordo 3 well in the southeast portion of the Catatumbo Sub-basin
averaged 0.85% Ro, indicating that this area is oil prone.
June, 2013 IV-17

Figure IV-13: Calculated TOC Profile from Well Log in the Catatumbo Sub-Basin.
Modified from Yurewicz et al., 1998
June, 2013 IV-18

Capacho Formation. The Capacho Formation (Cenomanian-Coniacian) is a distinct

unit from the overlying La Luna, although its upper portion is fairly similar. In the Maracaibo
basin the Capacho Fm consists of dark-gray to black shales and limestones and is much thicker
than the La Luna, ranging from 590 to nearly 1,400 feet in total thickness. However, less data
are available on the Capacho. Thus, for this assessment we combined the 200-ft thick, TOC-
rich upper portion of the Capacho with the stratigraphically adjacent La Luna for analysis.
Depth to the Capacho ranges from 6,500 feet to 8,500 feet in the Catatumbo Sub-basin,
with greater measured depth in the north and east at 8,275 feet in the Socuavo 1 well. TOC
reaches 5% in the Socuavo 1 well, northeastern Catatumbo Sub-basin, but more typically is
about 1.5%. Kerogen is Type II and III. Vitrinite reflectance ranges from 0.96% Ro in the
northern Rio de Oro 14 well to 1.22-1.24% Ro in southeastern well samples.
Three thermal maturity windows were mapped in the Maracaibo/ Catatumbo Basin: dry-
gas, wet-gas, and oil. Geologic modeling shows that the present-day temperature gradient in
the area ranges from 1.7 and 2.0° F per 100 feet of depth.
Dry Gas Window. Within the 5,840-mi2 depth-screened, dry-gas thermal maturity
window (average 1.6% Ro) of the Maracaibo/Catatumbo Basin, the Cretaceous La Luna Fm and
the adjoining upper portion of the Capacho Fm averages about 500 ft thick net, about 12,000 ft
deep, and is estimated to have average 5% TOC. Reservoir pressure is uncertain thus
assumed to be normal (hydrostatic).
Wet Gas Window. Within the 4,290-mi2 depth-screened, wet-gas thermal maturity
window (average 1.15% Ro), the La Luna and upper Capacho formations average about 11,000
ft deep. Other parameters are similar to the dry gas window.
Oil Window. The La Luna and upper Capacho shales in the thermally less mature
portion of the Maracaibo/Catatumbo basin are oil-prone, with average 0.85% Ro. The oil window
extends over an area of about 7,280 mi2 and averages about 10,000 ft deep.
June, 2013 IV-19

Total risked, technically recoverable shale gas and shale oil resources in the La Luna
and Capacho formations of the Maracaibo and Catatumbo basins are estimated to be 202 Tcf
and 14.8 billion barrels, out of risked shale gas and shale oil in-place of 970 Tcf and 297 billion
barrels, Tables IV-1 and IV-2. The play has high a resource concentration of up to 256 Bcf/mi2
within the dry gas prospective area.
Dry Gas Window. Risked, technically recoverable shale gas resources in the dry-gas
window of the Maracaibo/Catatumbo Basin are estimated at 131 Tcf, from a risked shale gas in-
place of 523 Tcf. Resource concentration is high (average 256 Bcf/mi2) due in part to favorable
shale thickness and porosity.
Wet Gas Window. The slightly shallower and less thermally mature wet gas window of
the Maracaibo/Catatumbo Basin has risked, technically recoverable resources of approximately
53 Tcf of shale gas and 3.1 billion barrels of shale condensate. Risked in-place resources are
estimated at 264 Tcf of wet shale gas and 62 billion barrels of shale condensate.
Oil Window. The still shallower and oil-prone window of the La Luna formation and
upper Capacho formation in the Maracaibo/Catatumbo basins has an estimated risked,
technically recoverable resource of 11.8 billion barrels of shale oil and 18 Tcf of associated
shale gas. Risked in-place shale resources are about 235 billion barrels of shale oil and 183 Tcf
of shale gas.
3.4 Recent Activity
Junior Canadian E&P Alange Energy Corporation is evaluating the prospectivity of the
eastern area of the Catatumbo Sub-basin. However, this exploration activity appears to be
focused on conventional reservoirs within the La Luna Shale interval. No shale exploration
leasing or drilling has been reported in the Maracaibo Basin.
June, 2013 IV-20

REFERENCES
1 PetroNova, Inc., Investor Presentation, November 2012, 26 p.

2 Torres, F., Reinoso, W., Chapman, M., Han, X., and Campo, P., 2012. “Field Application of New Proppant Detection
Technology - A Case History of the Putumayo Basin of Colombia.” Society of Petroleum Engineers, SPE Paper #152251,
Latin America and Caribbean Petroleum Engineering Conference, 16-18 April 2012, Mexico City, Mexico.
3 Cooper, M.A., Addison, F.T., Alvarez, R., Coral, M., Graham, R.H., Hayward, A.B., Howe, S., Martinez, J., Naar, J., Peñas, R.,
Pulham, A.J., and Taborda, A., 1995. “Basin Development and Tectonic History of the Llanos Basin, Eastern Cordillera, and
Middle Magdalena Valley, Colombia.” American Association of Petroleum Geologists, vol. 79, no. 10, p. 1421-1443.
4 Platino Energy, Investor Presentation, March 2013, 22 p.
5 Mann, U. and Stein, R., 1997. “Organic Facies Variations, Source Rock Potential, and Sea Level Changes in Cretaceous Black
Shales of the Quebrada Ocal, Upper Magdalena Valley, Colombia.” American Association of Petroleum Geologists, Bulletin,
vol. 81, p. 556-576.
6 Mora, A., Mantilla, M., and de Freitas, M., 2010. “Cretaceous Paleogeography and Sedimentation in the Upper Magdalena and
Putumayo Basins, Southwestern Colombia.” American Association of Petroleum Geologists, Search and Discovery Article
#50246.
7 Torres, E., Slatt, R.M., O’Brien, N., Phip, R.P., and Rodrigues, H.L., 2012. “Characterization of the Cretaceous La Luna
Formation as a Shale Gas System, Middle Magdalena Basin, Colombia.” Houston Geological Society Conference on
Unconventional Resource Shales, poster.
8 Ramon, J.C. and Dzou, L.I., 1999. “Petroleum Geochemistry of Middle Magdalena Valley, Colombia.” Organic Geochemistry,
vol. 30, p. 249-266.
9 Agencia Nacional de Hidrocarburos, Republic of Colombia, 2005. “Middle Magdalena Valley, MMV Basin.” 8 p.
10 Canacol Energy Ltd., Investor Presentation, March 2013, 22 p.
11 Sintana Energy, Investor Presentation, Q1 2013, 35 p.
12 Ecopetrol S.A., Investor Presentation, March 2013, 72 p.
13 ConocoPhillips, News Release, April 25, 2013, 5 p.
14 Nexen Energy, Colombia: “Nexen Explores for Shale Gas in Colombia.” June 2012, 4 p.
15 Moretti, I, Mora, C., Zamora, W., Valendia, M., Rodriguez, G., and Mayorga, M., 2009. “Llanos N-S Petroleum System
Variation (Columbia).” American Association of Petroleum Geologists, Search and Discovery Article #10208.
16 Agencia Nacional de Hidrocarburos (ANH), 2007. “Colombian Sedimentary Basins: Nomenclature, Boundaries, and
Petroleum Geology, a New Proposal.” Bogota, Colombia, 91 p.
17 Bachu, S., Ramon, J.C., Villegas, M.E., and Underschultz, J.R., 1995. “Geothermal Regime and Thermal History of the
Llanos Basin, Colombia.” American Association of Petroleum Geologists, Bulletin, vol. 79, p. 116-129.
18 Escalona, A. and Mann, P., 2006. “An Overview of the Petroleum System Of Maracaibo Basin.” American Association of
Petroleum Geologists, vol. 90, p. 657-678.
19 Erlich, R. N., Macostay, O., Nederbragt, A.J., and Lorente, M.A., 1999. “Palaeoecology, Palaeogeography and Depositional
Environments Of Upper Cretaceous Rocks Of Western Venezuela.” Palaeogeography, Palaeoclimatology, Palaeoecology,
vol. 153, p. 203-238.
20 Castillo, M.V. and Mann, P., 2006. “Deeply Buried, Early Cretaceous Paleokarst Terrane, Southern Maracaibo Basin,
Venezuela.” American Association of Petroleum Geologists, vol. 90, no. 4, p. 567-579.
21 Rangel, A. and Hernandez, R., 2007. “Thermal Maturity History and Implications for Hydrocarbon Exploration in the
Catatumbo Basin, Colombia.” Ecopetrol, CT&F Ciencia, Tecnologia y Futuro, vol. 3, p. 7-24.
June, 2013 IV-21

22 Goddard, D.A. and Talukdar, S.C., 2002. “Cretaceous Fine-Grained Mudstones Of The Maracaibo Basin, Venezuela.” Gulf
Coast Association of Geological Societies Transactions, Volume 52, p. 1093-1101.
23 Goddard, D.A., 2006. “Venezuela Sedimentary Basins: Principal Reservoirs & Completion Practices.” Venezuela Society of
Petroleum Engineers, 60 pages.
24 Lugo, J. and Mann, P., 1995. “Jurassic-Eocene Tectonic Evolution of Maracaibo Basin, Venezuela.” in A.J. Tankard, R. S.
Soruco, and H.J. Welsink, eds., Petroleum Basins of South America. American Association of Petroleum Geologists, Memoir
62, p. 699–725.
25 Blaser, R. and White, C., 1984. “Source-Rock and Carbonization Study, Maracaibo Basin, Venezuela.” in American
Association of Petroleum Geologists Memoir 35, p. 229-252.
26 Yurewicz, D.A., Advocate, D.M., Lo, H. B., and Hernandez, E.A., 1998. “Source Rocks and Oil Families, Southwest
Maracaibo Basin (Catatumbo Subbasin), Colombia.” American Association of Petroleum Geologists, Bulletin, vol. 82, p. 1329-
1352.
27 Yurewicz, D.A. et al.,1998.
June, 2013 IV-22

V. Argentina EIA/ARI W
V. ARGEN
A TINA
SUMMA
ARY
Argentina
A ha
as world-cla
ass shale gas
g and sh
hale oil pottential – po
ossibly the most
prospective outside of North Am
merica – primarily within
n the Neuqu
uen Basin. Additional sshale
resource
e potential ex
xists in three
e other untes
sted sedimen
ntary basinss, Figure V-1.
Figure V-1.
V Prospecttive Shale Bassins of Argenttina
Sourcee: ARI, 2013.
June, 2013 V-1

V
Significant
S ex
xploration programs and early-stage
e commercia
al production
n are underw
way in
quen Basin by Apache
the Neuq e, EOG, Ex
xxonMobil, T
TOTAL, YP
PF, and smaller compa
anies.
Thick, organic-rich,
o marine-dep
posited blac
ck shales in the Los Molles an
nd Vaca Muerta
formation
ns have been tested by
b approxim
mately 50 w e, with mostly good results.
wells to date
Vertical shale
s wells are
a producin ates of 180 tto 600 bbl/day following typically 5-sstage
ng at initial ra
fracture stimulation.
s Horizontal wells
w also arre being testted although
h initial resullts have not been
uniformly
y encouragin
ng.
Cretaceous
C shales
s in the
e Golfo San Jorge and A
Austral basin
ns in southerrn Argentina
a also
have good potentia
al, although higher clay
y content m
may pose a risk in these lake-fo
ormed
deposits.. Marine-deposited Dev
vonian shale
es in the Parrana Basin a
are prospective over a lim
mited
area of northeast
n Arrgentina. Arrgentina has
s an estimate
ed 802 Tcf of risked, sh
hale gas in-place
out of 3,,244 Tcf of risked, tech
hnically reco
overable sha
ale gas reso
ources, Tab
ble V-1. In-place
risked sh
hale oil resou
urces are es
stimated at 480
4 billion ba
arrels, of which about 27
7 billion barre
els of
shale oil may be tech
hnically reco
overable, Tab
ble V-2.
Tablee V-1A. Shale Gas Reservoiir Properties aand Resources of Argentinaa

Neuquen
Basin/Grosss Area
Basic Data
2
(66,900 mi )
Shale Formation Loss Molles Vaca Muerta
M
Geologic Age
A M. Jurassic U. Jurassic - L.
L Cretaceous
Depositional Envvironment M
Marine Marrine
2
Prrospective Area (m
mi ) 2,750 2,380 8
8,140 4,840 3,2270 3,5550
Physical Extent
Orgaanically Rich 800 800 800 5

500 5000 500
Th
hickness (ft)
Net 300 300 300 3
325 3225 325
Interrval 6,5500 - 9,500 9,5000 - 13,000 13,0000 - 16,400 3,000 - 9,000 4,500 - 9,000 5,500 - 10,000
Deepth (ft)
Averrage 8,000 1
11,500 144,500 5,000 6,5500 8,0000
Highly H
Highly H
Highly Higghly Hig hly Highhly
Reeservoir Pressure
Properties
Reservoir
Overpress. Overpress. Oveerpress. Overrpress. Overppress. Overprress.

% 2.0% 2.0% 2
2.0% 5.0% 5.00% 5.0%%
Th
hermal Maturity (%
% Ro) 0.85% 1.15% 2.20% 0.885% 1.15% 1.500%
Clay Content Lo w/Medium Low w/Medium Low//Medium Low/MMedium Low/MMedium Low/Meedium
Gaas Phase Asssoc. Gas W Gas
Wet Dry
ry Gas Asso c. Gas Wet Gas Dry Gas
G
Resource
2
GIIP Concentration (Bcf/mi
( ) 49.3 118.0 190.1 66.1 1855.9 3022.9
Risked GIP (Tcf) 67.8 140.4 7
773.8 1992.0 3644.8 6455.1
Risked Recoverablee (Tcf) 8.1 35.1 2
232.1 23.0 911.2 1933.5
June, 2013 V-2

V
Tablee V-2B. Shale Gas Reservoiir Properties aand Resources of Argentinaa

San Jorgee
Baasin/Gross Area
B i Data
2
D t (46,000 mi )
Sh
hale Formation Agu uada Bandera Pozo D-129
Basic
G
Geologic Age U. Jurasssic - L. Cretaceoous L. Cretaceouss
Deposiitional Environm
ment Lacustrine Lacustrine
2
Prospectivve Area (mi ) 8,380 920 540 4,120
E t t
Ph i l Extent
Organicallly Rich 1,600 1,200 1,200 1,200

Thicknesss (ft)
Net 400 420 420 420
Physical
Interval 6,,500 - 16,000 6,600 - 8,0000 8,000 - 10,000 10,000 - 16,400

Depth (ft)
Average 13,000 7,300 9,000 12,000
Reservoir Pressure Normal Normal Normal Normal
Properties
Reservoir
Average TOC
T (wt. %) 2.2% 2.0% 2.0% 2.0%
Thermal Maturity
M (% Ro) 3.00% 0.85% 1.15% 2.00%
Clay Conttent Med./High Med./High Med./High Med./High
Gas Phase Dry Gas Assoc. Gas Wet Gas Dry Gas
Resource
2
GIP Concentration (Bcf/mi ) 151.7 41.2 103.4 163.3
Risked GIP (Tcf) 254.2 9.1 13.4 161.5
R
Risked Reecoverable (Tcf) 50.8 0.5 2.0 32.3
Tablee V-3C. Shale Gas Reservoiir Properties aand Resources of Argentinaa

Austral-Magalllanes Parana
Gross Area
Basin/G
Basic Data
2 2
(65,000 mi ) (7747,000 mi )
Shale Formation L. Inoceramus-Magn
I nas Verdes onta Grossa
Po
Geolo ogic Age L. Cretaceo us Devonian
Depositionaal Environment Marine Marine
2
Prospective Arrea (mi ) 4,620 4,600 4,310 270 2,230
Physical Extent
Organically Ricch 800 800 800 400 400

Thickness (ft)
Net 400 400 400 200 200
Interval 6,600 - 11,000 9,000 - 14,5500 11,500 - 166,400 9,000 - 10,000 10,000 - 11,5500
Depth (ft)
Average 8,000 11,500 13,5000 9,500 10,500
Slightly Slightly Slightlyy
Reservoir Presssure Normal Normal
Properties
Reservoir
Overpress. Overpresss. Overpresss.

Average TOC (wt.
( %) 3.5% 3.5% 3.5% 2.0% 2.0%
Thermal Maturrity (% Ro) 0.85% 1.15% 1.60% 1.15% 1.40%
Clay Content Low/Medium m Low/Mediuum Low/Med ium Low/Medium Low/Medium
Gas Phase Assoc. Gas Wet Gas Dry Gass Wet Gass Dry Gas
Resource
2
GIP Concentraation (Bcf/mi ) 32.5 113.8 155.9 34.9 56.9
Risked GIP (Tccf) 67.5 235.6 302.4 1.1 15.2
Risked Recoveerable (Tcf) 6.8 47.1 75.6 0.2 3.0
June, 2013 V-3

V
Tablee VI-2A. Shalee Oil Reservoir Properties aand Resourcess of Argentinaa

Neuqueen
Baasin/Gross Areaa 2
Basic Data (66,900 mi
m )
Sh
hale Formationn Los Molless Vaca Muerta
M
Geologic Age M. Jurassicc U. Jurassic - L.. Cretaceous
Depositional Environ
nment Marine Marinne
2
Prospective Area (mi ) 2
2,750 2,380 4,840 3,270
Physical Extent
Organicaally Rich 800 800 500 500

Thicknesss (ft)
Net 300 300 325 325
Interval 6,5000 - 9,500 9,5000 - 13,000 3
3,000 - 9,000 4,500 - 9,000
Depth (ft)
Average 8
8,000 11,500 5,000 6,500
H
Highly Highly Highly Highly
Reservoirr Pressure
Properties
Reservoir
Oveerpress. Ovverpress. O
Average TOC
T (wt. %) 2
2.0% 2.0% 5.0% 5.0%
Thermal Maturity
M (% Ro)) 0
0.85% 1.15% 0.85% 1.15%
Clay Conttent Low//Medium Loww/Medium L
Low/Medium Low/Medium
Oil Phasee Oil Coondensate Oil Condensate
Resource
2
OIP Conccentration (MMb
bbl/mi ) 3
36.4 9.2 77.9 22.5
Risked OIIP (B bbl) 5
50.0 11.0 226.2 44.2
Risked Reecoverable (B bbl)
b 3
3.00 0.66 13.57 2.65
Tablee VI-2B. Shalee Oil Reservoir Properties aand Resourcess of Argentinaa

San
n Jorge Austral-Magallanes Parana
Basin/Gross Area
Basic Data
2 2 2
(46,0000 mi ) (65,000 mi ) (747,000 mi )
Shalee Formation Pozo D-129 L. Inoceramus-Magnas Verdes Ponta Grossaa
Geo ologic Age L. Creetaceous L. Cretaaceous Devonian
Deposition
nal Environmentt Laccustrine Marrine Marine
2
Prospective Area
A (mi ) 920 540 4,620 4,600 270
Physical Extent
Organically Rich
R 1,200 1,200 800 800 400
Thickness (ft))
Net 420 420 400 400 200
Interval 6,600 - 8,0000 8,000 - 10,000 6,600 - 11,000 9,000 - 14,500 9,000 - 10,0000
Depth (ft)
Average 7,300 9,000 8,000 11,500 9,500
Slightly Slightly
Reservoir Preessure Normal Normal Normal
Properties
Reservoir
Average TOCC (wt. %) 2.0% 2.0% 3.5% 3.5% 2.0%
p
Thermal Matu urity (% Ro) 0.85% 1.15% 0.85% 1.15% 1.20%

Clay Content Med./High Med./High Low/Medium Low/Medium Low/Medium
Oil Phase Oil Condensate Oil Condensate Condensate
Resource
2
OIP Concentrration (MMbbl/mi ) 63.7 20.3 48.4 14.8 8.1
Risked OIP (B
B bbl) 14.1 2.6 100.6 30.6 0.3
Risked Recovverable (B bbl) 0.42 0.08 5.03 1.53 0.01
June, 2013 V-4

V
INTROD
DUCTION
Argentina
A has
s large and potentially high-quality
h sshale gas and oil resources in four main
sedimenttary basins, Figure V-1. Basins ass
sessed in thiis chapter in
nclude:
 Neuquen
N Ba asin: The main
m focus of
o shale expploration in Argentina, some 50 m mostly
ve
ertical wells
s drilled sin
nce 2010 in ndicate goo
od productio on potentiall in the ma
arine-
deposited Loss Molles andd especially Vaca Muertta shales of JJurassic age
e.
 Golfo
G San Jo orge Basin:: Containing mostly non n-marine lacu ustrine shale
e source roccks of
Ju
urassic to Cretaceous
C age,
a this bas
sin has untessted but pro
ospective, prrimarily shale
e gas
re
esources in a structurally
y simple setting.
 Austral
A Basiin: Known asa the Magallanes Basin n in Chile, th
he Austral B
Basin of southern
Argentina
A con
ntains marinne-deposited
d black shale
e in the Low
wer Cretaceo ous, considered a
major
m source rock in the basin.
 Paraná
P Basin: Although more exten nsive in Brazzil and Para
aguay, Argenntina has a small
area of the Paraná
P Basin
n with Devonian black sshale potenttial. The strructural setting is
simple but th
he basin is partly
p obscu ured on surfface by flood although they are
d basalts, a
le
ess prevalen
nt in Argentin
na than in Brrazil.
1 NEUQUEN
N BASIN
1.1 In
ntroduction
Located in west-central
w Argentina, the
t ntains Late Triassic to Early
Neuque n Basin con
c strata that were depos
Cenozoic onic setting.1 Extending over a total area
sited in a back-arc tecto
0 mi2, the ba
of 66,900 ered on the west by the
asin is borde e Andes Mountains and
d on the easst and
southeas
st by the Co
olorado Basin and North
h Patagonian
n Massif, Fiigure V-2. The sedime
entary
sequence
e exceeds 22,000 ft in thicknes
ss, comprisiing carbona
ate, evaporrite, and m
marine
c rocks.2 Co
siliclastic ompared with
h the thruste
ed western p
part of the b
basin, the ce
entral Neuqu
uen is
deep an
nd structurallly less deformed. Alrready a ma
ajor oil and uction area from
d gas produ
conventio
onal and tig
ght sandston
nes, the Neu
uquen Basin
n is emergin
ng as the prremier shale
e gas
and shale
e oil develop
pment area of
o South Am
merica.
June, 2013 V-5

V
Figure V-2. Neuq

quen Basin Sttructure Map
Source: AR
RI, 2013.
June, 2013 V-6

V
The
T stratigrap
phy of the Neuquen
N Bas
sin is shown
n in Figure V
V-3. Of particular explorration
interest are
a the shalles of the Middle
M sic Los Mol les and Late Jurassic-E
Jurass Early Cretacceous
Vaca Mu
uerta formations. These
e two thick deepwater m arine seque
ences source
ed most of th
he oil
and gas fields in the basin and are
a considere
ed the prima
ary targets fo
or shale gas development.
Fig
gure V-3: Neuquen Basin Sttratigraphy.
VA
ACA MUERTA FM
M
LO
OS MOLLES FM
Modifieed from Howell, J., et al., 2005
Sourcee: Howell et al., 2005.

2
June, 2013 V-7

V
1.2 Reservoir
R Properties
Los
L Molles Shale.
S The
e Middle Jurrassic (Toarrcian-Aalenia
an) Los Molles Formatiion is
considere
ed an impo
ortant source
e rock for conventiona
c l oil and ga
as deposits in the Neu
uquen
Basin. Thermal
T matturity modeliing indicates
s that hydroccarbon gene
eration took place in the
e Los
Molles att 50 to 150 Ma, with the
e shallower Lajas Form ng as reservvoirs.3
mation tight ssands servin
The overlying Late Jurassic Aq
quilco Form
mation evapo
orites effecttively seal tthis hydroca
arbon
system, resulting
r in overpressuri
o ing (0.60 psii/ft) in parts o
of the basin..
The
T Los Mollles shale is distributed across
a n, reaching more
much of the Neuquen Basin
than 3,30
00 ft thick in
n the centrall depocenter. Available
e data show
ws the shale thinning tow
wards
the east.4 A southe
east-northwe
est regional cross-sectiion, Figure V-4, showss the Los M
Molles
deposit particularly
p thick in the basin
b hs. Well logss reveal a b
trough basal Los Mo
olles shale a
about
500 feet thick.5
Figure V-4: Neuquen Bassin SW-NE Reggional Cross S

Section
Source: Mossquera et al., 20009.
June, 2013 V-8

V
On
O average, the prospec
ctive Los Molles shale occurs at d
depths of 8,0
000 to 14,500 ft,
with max
ximum depth
h surpassing
g 16,000 ft in
n the basin ccenter. In th
he south, the
e shale occu
urs at
depths of
o 7,000 feett or shallowe
er within the
e uplifted Hu
uincul Arch. The Los M
Molles shale
e is at
shale-pro
ospective de
epth across much
m of the Neuquen Ba
asin.
Total
T organic
c carbon forr the Los Molles shale was determ
mined from vvarious loca
ations
across th
he Neuquen
n Basin. Samples from five outcrop
ps in the southwestern part of the basin
showed average
a OC ranging frrom 0.55 to 5.01%.6 In the southea
TO ast, TOC avveraged 1.25
5% at
shallowe
er depths of 7,000 feet at
a one locatio
on. Furtherr east, anoth
her interval o
of the Los M
Molles
Formatio
on, sampled from depths
s of 10,500 to 13,700 fee
et, yielded T
TOC’s in the range of 0.5
5% to
nearly 4.0%. The lo
owermost 80
00-ft section here record
ded a mean
n TOC of ab
bout 2%. Lim
mited
data werre available
e for the ce
entral and northern
n reg
gions, where
e shale is deeper and
d gas
potential appears hig
ghest. One well in the basin’s cen
nter penetratted two seve
eral-hundred
d-foot
thick inte
ervals of Los Molles shalle, with average 2% and espectively.7
d 3% TOC, re
The
T thermal maturity of the Los Mo guen Basin, from
olles shale vvaries acrosss the Neug
highly im
mmature (Ro = 0.3%) in the
t shallow Huincul Arcch region, to
o oil-prone (R
Ro = 0.7%) iin the
eastern and southern parts of the basin, to fully dryy-gas mature 0%) in the basin
e (Ro > 2.0
center.8,99 The lowerr portion of the
t Los Mollles is in the
e wet gas w
window (Ro > 1.0%) in a well
located north of the
e Huincul Arch.
A Gas shows are
e prevalent throughout the Los M
Molles
Formatio
on.
The
T prospecttive area of the
t Los Molles, Figure V
V-5, is define
ed by low vittrinite reflecttance
cutoff in the north, th
hinning in th
he east, and
d complex fa
aulting and sshallow dep
pth at the Hu
uincul
Arch in th
he south. The
T oil-prone
e thermal ma
aturity windo
ow within the
e prospective area cove
ers an
area of 2,750
2 mi2; the 0 mi2; and th e dry gas window 8,140
e wet gas window 2,380 0 mi2.
ARI
A extended
d the westerrn play edge
e beyond the
e main productive Neuq
quen area, w
where
most of the
t conventio
onal oil and gas fields are
a located, iinto the Agriio Fold and T
Thrust Belt a
along
the footh
hills of the Andes
A Moun
ntains. While there is ssome geolo
ogic risk asssociated with
h this
region, th
he thermal maturity
m is favorable.
June, 2013 V-9

V
Fig
gure V-5: Prosspective Shalee Gas and Shaale Oil Areas, LLos Molles Foormation, Neuquen Basin.
Source: ARI,
A 2013.
Vaca
V Muerta
a Shale. The
e Late Juras
ssic to Early Cretaceouss (Tithonian--Berriasian) sshale
of the Vaca
V a Formation is considered the prim
Muerta e rocks for conventional oil
mary source
on in the Neuquen Basin
productio n. The Vaca
a Muerta sh
hale consistss of finely-strratified blackk and
dark gre
ey shale and
d lithograph
hic lime-mud eet thick.10
dstone that totals 200 to 1,700 fe The
organic-rrich marine shale was deposited
d in reduced oxxygen enviro
onment and contains Tyype II
kerogen. Although somewhat thinner than
n the Los M
Molles Fm, the Vaca M
Muerta shale
e has
higher TO
OC and is more
m widesprread across the basin.
June, 2013 V--10

The
T Vaca Muerta Forma
ation thicken
ns from the south and east toward
ds the north
h and
west, ran
nging from absent to over
o 700 fee enter.11 De
et thick in tthe basin ce epth ranges from
outcrop near
n the bas
sin edges to over 9,000 feet
f deep in the central ssyncline.12
The
T Vaca Mu
uerta Forma
ation generally is richer in TOC than the Los M
Molles Forma
ation.
Sparse available
a TO
OC data were
e derived fro
om wells an
nd bitumen vveins sample
ed from min
nes in
h.13
the north These asphaltites
s are very rich
r in orga
anic carbon,, increasing northward to a
maximum
m of 14.2%. In the sou
uth, mapped
d TOC data ranges from
m 2.9 to 4.0%
%. TOC of up to
6.5% is reported
r in th
he lower bitu
uminous sha
ale units of th
he Vaca Muerta.
While
W the Va
aca Muerta Formation is
i present a
across much
h of the Ne
euquen Basin, its
thermal maturity
m cha
anges, increasing from east
e to westt. Figure V
V-4 is a crosss-section fo
or the
uerta illustrating the oil and
Vaca Mu a gas reg
gions of thiss formation. Thermal m
maturity incre
eases
from less
s than 0.7%
% Ro along the eastern border of tthe basin to
o over 1.5%
% Ro in the deep
st trough.14 Northeast of the Huincu
northwes ul Arch, Ro o
of 0.8% was measured, placing this area
in the oil window.
The
T Vaca Mu
uerta Formation has thre
ee distinct p
prospective a
areas of hyd
drocarbons iin the
Neuquen
n Basin, as shown
s on th
he thermal maturity
m and prospective
e area map, Figure V-6. The
oil-prone
e thermal ma
aturity windo
ow within the ers an area of approxim
e prospectivve area cove mately
4,840 mi2; the wet ga
as window covers 3,270 mi2; and the
e dry gas window coverss 3,550 mi2.
1.3 Resource
R Assessmen
A nt
Risked,
R technically recoverable sha d shale oil resources ffrom black sshale
ale gas and
within the
e Los Molle
es Formation
n of the Neu
uquen Basin
n are estima
ated at 275 Tcf of shale
e gas
and 3.7 billion
b barrels of shale oil
o and conde
ensate, from
m 982 Tcf an
nd 61 billion barrels of rissked,
in-place shale gas and
a shale oil resources
s, Tables 1 and 2. The
e Los Molle
es Formation
n has
e to high res
moderate source concentrations of 49 to 190 Bcf/mi2 for sshale gas an
nd 9 to 36 m
million
bbl/mi2 fo
or shale oil, depending
d on
o the thermal maturity w
window.
The
T Vaca Mu
uerta Formation has risk
ked, techniccally recoverrable shale g
gas and sha
ale oil
resource
es of 308 Tcff of gas and 16 billion ba
arrels of oil a
and condenssate, from 1,202 Tcf and
d 270
billion ba
arrels of riske
ed, in-place shale gas and shale oil resources. T
The Vaca M
Muerta has hiigh to
very high
h resource concentration 3 Bcf/mi2 ffor shale gass and 23 to 78 million bb
ns of 66 to 303 bl/mi2
for shale oil, depending on therm
mal maturity window.
w
June, 2013 V--11

Figure V-6. Prosp

pective Shale Gas and Shale Oil Areas, V
Vaca Muerta Formation, Neuuquen Basin.
Source: ARI, 2013.
1.4 Recent
R Activity
Early
E drilling and producttion testing are
a underwa
ay in the Ne
euquen Basiin, evaluating the
Vaca Mu
uerta Formattion mostly at depths off 6,000 to 1 1,000 ft. YPF reported
d it holds ab
bout 3
million ne
et acres in the
t basin an
nd is negotia
ating with C
Chevron, TOTAL, Statoill, Dow Chem
mical,
and othe
er companies to jointly develop
d its shale
s resou rces. Includ
ding earlier Repsol ope
erated
wells, YP
PF has drille
ed 37 Vaca Muerta
M wells 012.15 Chevron has repo
s through 20 ortedly agre
eed to
June, 2013 V--12

invest up
p to $1 billion
n to drill 100
0 wells with YPF
Y in the N
Neuquen Basin, although the deal a
awaits
final approval. CNO
OOC signed a joint ventu
ure deal wit h YPF to invvest up to $
$1.5 billion to
o drill
s in the basin.
130 wells
Repsol,
R which
h previously
y operated YPF’s
Y positio
on in the Neu
uquen Basin
n, drilled som
me 20
vertical wells
w targetin
ng the Vaca Muerta Sha
ale that prod
duced at encouraging in
nitial rates o
of 180
to 600 bb
bl/day on res
stricted 4-mm choke. In
n 2012, Rep
psol estimate
ed that its le
eases held a total
of 92 Tcff and 7.0 billion barrels of ective shale gas and oil resources.166
o contingentt and prospe
Apache
A has 1.3 million net acres in the Neu
uquen Basiin with Vacca Muerta S
Shale
potential, of which th
he company estimates 586,000
5 net acres is liquids-rich. A
Apache estim
mates
ecoverable potential
its net re p at 0.8
0 billion barrels. The ccompany com
mpleted its ffirst Vaca Muerta
horizonta
al well durin
ng 2012, a relatively
r short 1,900-ft lateral treatted with a 7
7-stage hydraulic
stimulatio
on, describe
ed by Apach g.”17 The co
he as “very encouraging ompany’s earlier Los M
Molles
horizonta
al, drilled intto the dry ga ndow at a depth of 4,40
as thermal maturity win 00 m, IP’d a
at 4.5
MMcfd frrom a 2100’ lateral that was stimula
ated by a 9--stage fractu
ure treatmen
nt. Apache plans
to invest $200 MM during 2013 to
t drill 16 ne
et wells focu
using on the Vaca Muertte within the
e TDF
and Rio Negro
N blocks.18
EOG
E Resourrces estimattes it holds about
a 100,0
000 net acre e potential in the
es with shale
Neuquen
n Basin. The company reported low
wer-than-exp
pected results from its ffirst horizonttal oil
well in th
he Vaca Muerta Formattion, with pro
oduction sim
milar to its n
nearby verticcal well. EO
OG is
evaluatin
ng the results
s of the two wells and pllans to proce 013.19
eed cautioussly during 20
Calgary-base
C ed Americas
s Petrogas operates
o 5 blocks covvering nearly 1.4 million
15 n net
acres in the Neuque
en Basin. To as drilled four shale exp
T date the company ha ploration we
ells to
test the Vaca
V Muerta
a Formation. Its LTE.x1
1 vertical we
ell on the Los Toldos II b
block, drilled
d with
partner ExxonMobil,
E 9 boe/day (3
IP’d at 309 30-day avera
age rate; 82
2% oil) from
m the 343-m thick
Vaca Mu
uerta Forma
ation followiing a 5-stag
ge hydraulicc stimulation. The co
ompany’s se
econd
vertical shale
s well, drilled on the
t oldos I blocck, intersected 562 m of Vaca Muerta
Los To
Formatio
on at depths duced up to 3.2 million ft3/day of na
s of 2,570-2,,929 m. This well prod atural
gas with 9 to 18 bbl/d
day of conde
ensate follow ge fracture sstimulation.20
wing a 4-stag
June, 2013 V--13

2 GOLFO
G SAN
N JORGE BASIN

ntroduction
Located in ce 7,000-mi2 Go
entral Patagonia, the 67 olfo San Jorrge Basin acccounts for a
about
one-quarrter of Argen
ntina’s conve oduction.21 A
entional oil and gas pro An intra-cratonic extenssional
basin, the San Jorge
e extends ac
cross the wid
dth of south
hern Argentin
na, from the
e Andean foo
othills
on the west
w to the offshore
o Atla
antic contine
ental shelf in
n the east. Excluding its small offsshore
extent, th
he onshore Golfo
G San Jo
orge Basin covers
c appro 6,000 mi2.
oximately 46
The
T basin is
s bordered by the De
eseado Grab
ben and M
Massif to the
e south, byy the
Somuncu
ura Massif to the nortth, and the
e Andes Mo
ountains in the west. Compresssional
22
structure
es of the San
n Bernardo Fold Belt tra
ansect the w
west-central region. E
Extensional ffaults
are wide
espread in th
he northeas
stern and so
outhern flan ks, while th
he northwestern edge o
of the
basin is less faulted.23
2
Extensional
E events
e marked by the fo
ormation of g
grabens and
d half-graben
ns in the pre
esent-
day loca
ation of the Golfo San Jorge Basiin began in
n the Triasssic to Early Jurassic ass the
Gondwan
na supercon u 24 A sepa
ntinent began to break up. arate period
d of extensio
on followed in the
Middle Jurassic, as the Lonco Trapial Volc
canics were deposited via northwe
est-striking fa
faults.
The regiion subsided by the en
nd of the Jurassic
J and
d extensive, mainly laccustrine dep
posits
formed, including
i the
e thick black
k shale and mudstone ssource rockks of the Neo
ocomian Ag
guada
Bandera Formation.
2.2 Reservoir
R Properties
Aguada
A Ban
ndera Shale. The Late
L Jurasssic-Early Crretaceous A
Aguada Ban
ndera
Formatio
on comprises fine gray sandstones
s that grade
e upward into a tufface
eous matrix,, with
black sha
ales and mu
udstones inc
creasing tow V-7.25 Much
wards its basse, Figure V h of the form
mation
is lacustrine in origin, although foraminifera
a found in w
western are
eas suggest possible m
marine
ar beds.26
sources in particula Towards
T the
e north, oth
her biota ind
dicative of an outer m
marine
platform depositional environmen
nt were obse
erved in wel l samples ne olhue Huapi..27
ear Lago Co
June, 2013 V--14

Figuree V-7: Golfo San

S Jorge Bas in Stratigraphhy
Source: Sylw
wan, 2001.
The
T Aguada Bandera Fo
ormation is a heterogen
neous unit ccomprising sshale, sandsstone,
and occa
asional limestone. Tota
al formation thickness vvaries widely, from morre than 15,0
000 ft
thick in th
he southwes
st to 0-2,000 out 60 miles offshore in tthe east. A similar thickkness
0 ft thick abo
variation also is seen in the wes
st. Limited data is pressent south o
of Lago Colh
hue Huapi tto the
north. The Aguada Bandara Fo
ormation gen
nerally is 1,0
000 to 5,000
0 ft thick in tthe central b
basin,
probably only a fraction of which is high-quality organic sshale.
Depth
D to the top of the Aguada Band
dera Formatiion was map
pped based on the top o
of the
underlyin
ng Middle Ju
urassic Lonc
col Trapial vo
olcanics. Bu
urial depth re
eaches a ma
aximum 20,0
000 ft
along the
e onshore coast in the center
c of the
e basin. De
epocenters iin the weste
ern portion o
of the
basin typ
pically avera
age a more prospective
p 10,000 to 1 2,000 ft dee
ep. The Ag
guada Bande
era is
June, 2013 V--15

much shallower, 2,000 to 8,000 ft deep, alo

ong the north
hern and we
estern flankss. In the ea
astern
coastal onshore
o porttion of the ba
asin, the Aguada Bande
era Shale is about 1,500
0 to 2,500 ft thick
and 20,000 ft deep.
Limited geoc
chemical datta were ava
ailable for an e Aguada Bandera, whiich is
nalyzing the
considera al reservoirss and thus rarely sam
ably deeperr than the conventiona mpled. Onlyy two
available
e wells have TOC and Ro data, both
h located in tthe basin’s w
western area
a. Average TOC
ranged frrom 1.44% to 3.01% at depths of 12,160
1 d 11,440 ft, respectivelyy.28 Organicc-rich
ft and
intervals reached 4.1
19% TOC. Vitrinite
V refle
ectance indiccated a dry-g
gas thermal maturity of 2.4%
R o.
Petroleum
P ba
asin modeling indicates that
t eneration threshold (Ro = 1.0
the miniimum gas ge
to 1.3%)) is typically
y achieved across
a the basin at de
epths below
w about 6,60
00 ft. Thuss, the
Aguada Bandera Formation app
pears to be mature
m for g
gas generatio
on across m
most of the b
basin,
Figure V-8.
V The unit is likely to be over ma
ature in the d
deep basin center, whe
ere Ro is mod
deled
to exceed
d 4%.
Using
U depth distribution opriate mini mum and m
n and appro maximum Ro cutoffs, A
ARI’s
prospective area for the Aguada mi2 of the onsshore
a Bandera Shale covers approximattely 8,380 m
Golfo Sa
an Jorge Ba
asin. The central
c coastal basin (>
>16,000 ft de he northern Lake
eep) and th
region (<
<6,000 ft dee
ep) were exc
cluded as no
ot prospectivve.
Pozo
P D-129 Shale. The Early Cre
etaceous Po Formation comprises a wide
ozo D-129 F
range of lithologies, with
w the dee
ep lacustrine sediments --- organic black shales a
and mudston
nes –
ed most prrospective for
considere ation.29
f hydrocarrbon genera Th
he presence
e of pyrite, dark
laminatio
ons, and the absence off fossil burro
ows in the m
marine shale portions of this unit all point
to favorably anoxic depositional
d conditions.300 Siltstones, sandstoness, and ooliticc limestoness also
were dep
posited in the
e shallower water enviro
onments of tthe Pozo D-1
129.
The
T Pozo D-1
129 Shale is
s consistently thicker tha n the centrall basin, with local
an 3,000 ft in
maxima exceeding
e 4,500
4 ft thick
k. Along the northern fla
ank the intervval is typicallly 1,000 to 2
2,000
ft thick. A locally th
hick deposit occurs in th
he western part of the basin, but thins rapidly from
about 1,0
000 ft thick to
o absent.
June, 2013 V--16

Figuree V-8: Aguadaa Bandera Fm Prospective A

Area, Golfo Saan Jorge Basiin
Sourcce: ARI, 2013.
Northeast
N of Lago Colhu
ue Huapi, the
e Pozo D-12
29 shoals ra
apidly from 6,000 ft to a
about
2,800 ft deep.
d Just southwest
s off the lake, de
epth increasses from abo
out 5,000 ft tto nearly 9,5
500 ft.
To the so
outh, depths
s range from
m 5,000 to 6,400 ft, with similar depths in the we
est. The Pozzo D-
129 deep
pens along the eastern
n coastal flank of the ba
asin to nearrly 15,900 ftt near the ccity of
Comodorro Rivadavia
a.
Available
A data indicates organic
o richn
ness in the ssouthwest, 1
1.42% to 2.4
45% TOC, w
with a
correspo
onding early gas maturity
y of 1.06% Ro. In the no
orth-central rregion a low 0.32% TOC
C was
recorded
d, with slightly higher 0.5 ue Huapi.31 Towards the basin center in
5% Ro near Lago Colhu
the east, organic carrbon (TOC) rises
r und 1.22%. The thermal maturity in this deep se
to arou etting
spondingly high,
is corres h 2.49 to uth, thermal maturity drops to oil-p
o 3.15% Ro. In the sou prone
levels, 0.83% Ro with a measu
ured TOC here of abou
ut 0.84%, e
excluding thiis area from
m the
resource
e assessmen
nt.
June, 2013 V--17

ARI
A defined the
t shale prrospective areas for the
e Pozo D-12
29 Formation
n based prim
marily
on depth
h and available (but in
ncomplete) vitrinite refllectance da
ata, Figure V-9. The total
2
prospective area for the Pozo D-129
D Shale
e is estimate
ed at approxximately 5,58
80 mi , main
nly in
g window (4,120 mi2), with much
the dry gas et gas (540 mi2) and oill-prone (920
h smaller we 0 mi2)
areas.
ure V-9: Pozo D-129 Fm, TO

Figu OC, Thermal Maturity,
M and P
Prospective Arrea, Golfo Sann Jorge Basin
Source: ARI, 2013.
2.3 Resource
R Assessmen
A nt
Aguada
A Ban
ndera Forma
ation. Risk
ked, technica
ally recovera
able shale g
gas resource
es for
the Agua
ada Bandera
a Formation in the Golfo
o San Jorge Basin are e
estimated at 51 Tcf of na
atural
gas, from
m risked sha
ale gas in-p
place of 254
4 Tcf, Table
e 1. The p
play has a h
high net ave
erage
resource cf/mi2.
e concentration of 152 Bc
June, 2013 V--18

Pozo
P D-129 Formation. The Pozo D-129
D Form
mation has rissked, technically recove
erable
shale resources esttimated at 35
3 Tcf of shale
s gas a
and 0.5 billio
on barrels of shale oill and
ate, from 18
condensa 84 Tcf and 17 billion barrels
b of ri sked, in-pla
ace shale ga
as and sha
ale oil
es, Tables 1 and 2. The
resource e Pozo D-129 has mode
erate to high net resourcce concentra
ations
of 41 to 163 Bcf/mi2 of shale gas
g on bbl/mi2 o
and 20 to 64 millio of shale oil a
and conden
nsate,
ng on the the
dependin ermal maturiity window.
2.4 Recent
R Activity
No
N shale activity has bee
en reported in the Golfo S
San Jorge B
Basin.
3 AUSTRAL
A BASIN
B
3.1 In
ntroduction
2
Located in so
outhern Pata
agonia, the 65,000-mi
6 A
Austral-Mag
gallanes Bassin has prom
mising
sted shale gas
but untes g potentia
al, Figure V-10.
V Most o
of the basin
n is in Argen
ntina, where
e it is
usually called
c the Au
ustral Basin. A small so
outhernmost portion of th
he basin is llocated in C
Chile’s
Tierra de
el Fuego reg
gion, where iti is referred to as the M
Magallanes B
Basin. Oil and gas has been
produced
d in the bas
sin for decad
des from de
eltaic to fluvvial sandston
nes in the E
Early Cretacceous
Springhill Formation at depths off about 6,000
0 ft.
The
T Austral Basin comp
prises two main structural regionss: a normall faulted ea
astern
region and a thrustt faulted we
estern area. The basi n contains a thick seq
quence of U
Upper
ous and Terttiary sedime
Cretaceo entary and volcaniclastic
v c rocks whicch unconform
mably overlie the
deformed
d metamorp
phic baseme
ent of Paleo
ozoic age. Total sedim
ment thickne
ess ranges from
3,000 to 6,000 ft alon
ng the easte
ern coast to a maximum 25,000 ft allong the bassin axis. Jurrassic
and Low
wer Cretaceo
ous petroleu
um source rocks
r are p
present at m
moderate de
epths of 6,00
00 to
10,000 ft 1.32
f across larrge areas, Figure V-11 The o
overlying Cre
etaceous se
ection comp
prises
mainly de
eepwater turbidite clastiic deposits up
u to 4 km th
hick which a
appear to lacck shale gass and
oil potenttial.33
The
T organic--rich shales of Jurassic ed under anoxic
c and Early Cretaceouss age forme
marine conditions
c within
w a Neo
ocomian sag on the e dge of the Andes marrgin. The basal
sequence
e consists of Jurassic
c source ro
ocks that acccumulated under resttricted lacusstrine
condition
ns within sma
all half-grabe
ens. Interbe
edded shale and sandsttone of the Z
Zapata and P
Punta
Barrosa formations were
w depos hallow-waterr marine envvironment.344 The mid-lower
sited in a sh
June, 2013 V--19

Jurassic Tobifera Formation

F contains
c 1%
% to 3% TO
OC (maxim
mum 10% in
n coaly sha
ales),
consisting of Types I to III kerog
gen. Howev
ver, carbon in this unit iis mainly co
oaly and probably
ently brittle fo
insufficie or shale explloration.
Figure V-10:
V Stratigraphy of the Austral-Magallannes Basin, Arggentina and C
Chile
Source: Rosseello et al., 2008
June, 2013 V--20

Fig
gure V-11: Inoceramus Shalle, Depth, TOC
C, and Thermaal Maturity, A
Austral / Magalllanes Basin
Source: ARI,, 2013.
Overlying
O the Tobifera Formation are more prospectivve shales w
within the Early
Cretaceo
ous Lower In
noceramus or
o Palermo Aike
A formatiions (Estrato
os con Favrrella Formatiion in
Chile). The Tobife
era was dep
posited under shallow water mariine conditions. The L
Lower
mus Formatio
Inoceram on is 50 to 400
4 m thick. In the Arge
entina portion
n of the basin, the total sshale
June, 2013 V--21

thickness
s (including the Magnas Verdes Formation) ra
anges from 800 ft thickk in the norrth to
4,000 ft thick in the
e south, representing ne
eritic facies deposited in a low-en
nergy and anoxic
ment.35
environm Total organic content
c of th
hese two ma
ain source rrocks generrally ranges from
1.0% to 2.0%,
2 with hydrogen
h ind o 550 mg/g.336 Based on
dex of 150 to n analysis in
n Chile reporrtedly
conducte
ed by Chesapeake Ene
ergy, the Lo
ower Cretacceous Estra
atos con Fa
avrella Form
mation
contains marine-deposited shale
e with consis
stently good to excellentt (up to 6%) TOC, particularly
37
near its base.
b
Figure V-12, a seismic time

t section
n across the ws the 180--m thick Esttratos
e basin, show
con Favrrella Formation dipping gently west in a relative
ely simple sstructural settting. ENAP
P has
estimated o 6% to 12%, but we
d porosity of e assumed a more co
onservative estimate off 6%.
Thermal maturity inc
creases grad
dually with depth
d in a ha
alf-moon pa
attern, rangin
ng from oil-p
prone
(Ro 0.8%
%) to dry gas
s prone (Ro 2.0%).
2 The transition fro
om wet to dry gas (Ro 1
1.3%) occurss at a
depth of about 3,600 asin.38
0 m in this ba
Figure V-12: Seeismic Time Section

S in the Magallanes B
Basin, Chile
Source: Metthanex, September 27, 2012.
June, 2013 V--22

3.2 Reservoir
R Properties
Argentina’s
A portion
p of the asin has an estimated 13,530-mi2 prospective area
e Austral Ba
with organic-rich sh
hale in Low
wer Cretace
eous formattions. Of tthis total p
prospective area,
0 mi2 is in th
mately 4,620
approxim ow; 4,600 m i2 is in the w
he oil windo wet gas/con
ndensate the
ermal
maturity window; and 4,310 mi2 is in the drry gas windo
ow. These shales averrage about 8
800 ft
ganic-rich), 8,000
thick (org 8 to 13,500 ft deep, and have e
estimated 3.5% average
e TOC. The
ermal
maturity (Ro) ranges
s from 0.7% to 2.0% de
epending ma
ainly on dep
pth. Porosityy is estimatted at
%. The Estan
about 5% ncia Los Lag
gunas gas condensate
c field in souttheast Argen
ntina measured a
0.46 psii/ft pressure
e gradient with elevatted tempera
ature gradie
ents in the
e Serie Tob
bifera
Formatio
on, immediattely underlyin
ng the Lowe
er Inoceramu nt.39
us equivalen
3.3 Resource
R Assessmen
A nt
Risked,
R techn
nically recov
verable shale
e gas and o
oil resourcess from the Lo
ower Cretacceous
formation
ns in the Arg
gentina porttion of the Austral
A Basin
n are estima
ated at 130 Tcf of shale
e gas
and 6.6 billion
b barrells of shale oil
o and condensate, Tab
bles V-1 and
d V-2. Riske
ed shale gass and
oil in-pla
ace is estima
ated at 606
6 Tcf and 13
31 billion ba
arrels. The moderate to high
e play has m
resource o 156 Bcf/mi2 of shale g
e concentratiions of 33 to n bbl/mi2 of sshale
gas and 15 tto 48 million
oil and co
ondensate, depending
d on
o the thermal maturity w
window.
3.4 Recent
R Activity
No
N shale leas
sing or explo
oration activity has been
n reported in
n the Australl Basin. In C
Chile,
n the Magallanes
Methanex had partnered with ENAP in conventional oi l and gas exxploration in
basin an
nd also had expressed interest in shale gas exploration during 2011-12. How
wever,
recently the company decided to relocate
e about hallf of its me
ethanol capa
acity in Chile to
a, USA.40
Louisiana
UK-based
U Ge
eoPark hold
ds conventio
onal petrole
eum leases in the Magallanes Bassin of
Chile, wh
hich the com s contains shales in the
mpany notes e Estratos co
on Favrella Formation w
which
previously have prod
duced oil. In
n 2012, GeoP
Park conduccted diagnosstic fracture injection tessts on
eight wellls on the Fe
ell Block to determine res
servoir prope e shale.41
erties of the
June, 2013 V--23

4 PARANÁ
P BA
ASIN
4.1 In
ntroduction
The
T 000 mi2) de
Paraná Basin is a large (747,0 epositional ffeature that covers areas of
Brazil, Pa
araguay, and Uruguay, as well as a small area of northeasstern Argentiina, Figure V
V-13.
The basin contains up
u to 5 km (llocally 7 km) of Paleozo
oic and Meso
ozoic sedim
mentary rockss that
range fro
om Late Orrdovician to Cretaceous
s. The bassin’s westerrn border iss defined byy the
Asuncion
n Arch, relatted to Ande
ean thrusting
g, while the east is trun
ncated by th
he South Attlantic
tectonic margin.42 Much
M of the Brazilian
B portion of the basin is covvered by floo
od basalts, p
partly
g the underlying geolo
obscuring ogy from se
eismic and increasing tthe cost of drilling, bu
ut the
Argentina
a portion is largely free of
o basalt.
Fig
gure V-13: Pro
ospective Shaale Area in thee Parana Basinn, Argentina
Source: ARI, 2013.
June, 2013 V--24

The
T main pettroleum sourrce rock in th
he Paraná B
Basin is the Devonian (E
Emsian/Frassnian)
black sha
ale of the Ponta Grossa
a Formation. The entire
e formation ranges up tto 600 m thick in
the cente
er of the bas
sin, averagin
ng about 300
0 m thick. T
TOC of the P
Ponta Grossa
a Fm reache
es up
to 4.6% but more ty
ypically is 1.5% to 2.5%
%. The mosttly Type II kkerogen sou
urced natura
al gas
that migrrated into conventional sandstone
s eservoirs.43
re
Figure V-14, a cross-sec

ction of the Paraná
P Basi n, illustratess the thick an
nd gently dip
pping
n source roc
Devonian cks that pass
s through th
he oil window as window.444 A conventtional
w into the ga
well log in the Paraguay portion of the basin penetrated Devonian source rocks and interbe
edded
nes with oil and
sandston ows.45 In outcrop, the D
a gas sho Devonian Cordobes Form
mation range
es up
to 160 m thick, including up to
o 60 m of organic-rich
o C ranges from 0.7 to 3
shale. TOC 3.6%,
consisting mainly of Type II marrine kerogen
n. Based on
n the low the
ermal maturity at outcro
op (Ro
0.6%), ANCAP
A has estimated the boundary
y between d
dry and wett gas to occcur at a dep
pth of
200 m.46
about 3,2
The
T Paraná Basin has remained at moderatte burial de
epth throug
ghout its hisstory.
Consequ
uently, the bulk
b of therrmal matura
ation took p
place during
g the late JJurassic to early
Cretaceo
ous igneous episode. Most
M of the basin rema
ains thermallly immature
e (Ro <0.5%), but
there are
e sizeable co ndows of oil-, wet-gas-, and dry-gass maturity in the central deep
oncentric win
portion of
o the basin.
4.2 Reservoir
R Properties
Depth
D and th
hermal matu
urity of the Devonian
D P
Ponta Grossa
a Formation
n are moderrately
constrain
ned by data in the Argen
ntina portion
n of the Para
aná Basin. T
The total pro
ospective arrea in
Argentina 0 mi2, of wh
a is estimatted at 2,500 hich 270 mi2 is in the w
wet gas/con
ndensate the
ermal
nd 2,230 mi2 is in the dry
maturity window, an d gas wind
dow (the oil window is negligible in
n this
basin). Devonian Ponta Grossa
a shale averages aboutt 300 m thicck (net), 11,000 to 14,0
000 ft
deep, and has estima
ated 2.0% average
a TOC
C. Thermal m
maturity (Ro) ranges from
m 0.85% to 1.5%
ng mainly on
dependin n depth.
For example, Amerisur reported tha

at the Devo
onian Lima Formation h
has good (2
2-3%)
d is oil-prone
TOC and e (Ro 0.87%)) at their con
nventional exxploration bllock in Parag
guay. Porossity is
estimated
d at about 4% and the pressure
p gradient is assu
umed to be h
hydrostatic.
June, 2013 V--25

Figure V-14:
V Cross-Seection of the Paraná
P Basin of
o Paraguay, S
Showing Thickk and Gently D
Dipping Devonian
Source Roccks Passing Through
T the O il and Gas Windows.
Source: Chaaco Resources PLC,

P 2004.
4.3 Resource
R Assessmen
A nt
Risked,
R techn
nically recov
verable shale
e gas and sh
hale oil resources from b
black shale iin the
Devonian
n Ponta Grossa Formation in the Arg
gentina porttion of the Pa
araná Basin
n are estimatted at
3.2 Tcf of
o natural ga
as and minim
mal (0.01 biillion barrelss) shale oil a
and condensate, Tabless V-1
ale gas and shale oil in-place is esttimated at 16 Tcf and 0
and V-2. Risked sha 0.3 billion ba
arrels.
ons of 35 to 57 Bcf/mi2 of shale gass and
y has low to moderate net resource concentratio
The play
8 million bbl/mi2 of sh
hale oil and condensate, depending on the therm
mal maturityy window.
4.4 Recent
R Activity
No
N shale leas
sing or explo
oration activ
vity has been n the Argentina portion o
n reported in of the
Paraná Basin.
B In Uruguay
U TOT
TAL, YPF, and
a small A Energy hold large
Australia-bassed Petrel E
exploratio
on licenses with Devonian shale pottential but ha
ave not drille
ed.
June, 2013 V--26

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of the
Norte Ba
asin, Uruguay
y, 2011.” 2 p.
June, 2013 V--29

VI. Brazil EIA/ARI W
VI. BRAZIL
B L
SUMMA
ARY
While
W Brazil’s
s most prolific petroleu
um basins l ie offshore, the countryy has 18 m
mostly
undevelo
oped and lig
ghtly explore
ed sedimenttary basins onshore, Figure VI-1. Three of tthese
basins --- the Paraná in the south and the
e Solimões and Amazo
onas in the north – pro
oduce
significan
nt conventio
onal oil and gas from demonstrate
ed source rrock system
ms. These three
basins allso have suffficient geolo
ogic data to be
b assessed
d for shale gas and shale al.
e oil potentia
Figuree VI-1: Prospeective Shale B

Basins of Brazzil
Source: ARI, 2013
June, 2013 VI-1

The
T main shale target is the De
evonian (Fra
asnian) ma
arine black shale, whicch is
extensive
ely develope ally simple b asins but ha
ed in the three structura as relatively modest TO
OC (2-
2.5%). Several
S othe
er basins in
n Brazil may
y have shale
e gas and o
oil potential but lack prroven
source ro
ock systems
s, are therma
ally immature
e, and/or lacck sufficient public data ffor assessm
ment.
Brazil’s
B risked
d, technically recoverab
ble shale gass and shale oil resource
es in the Pa
araná,
Solimões
s and Amaz
zonas basins
s are estima
ated at 245 Tcf and 5.4
4 billion barrrels, Tabless VI-1
and VI-2. Risked, in
n-place shale
e resources are estimate
ed to be 1,2
279 Tcf of sh
hale gas and
d 134
arrels of shalle oil. No sh
billion ba hale-focused
d exploration
n leasing or drilling has been annou
unced
to date in
n Brazil.
Taable VI-1. Shale Gas Reservoir Propertiess and Resourcces of Brazil

Parana Solimoes Amazonas
Basin/Gross Areea
Basic Data
2 2 2
(747,000 mi ) (350,000 mi ) (
(230,000 mi )
Shale Formatioon Ponta Grossa Jandiatuba Barreirinha
Geologic Age Devonian Devonian Devonian
2
Proospective Area (mi ) 25,600 18,050 22,840 8
8,560 54,750 5,520 3,260 44,8890
Physical Extent
Organiccally Rich 1,000 1,000 1,000 160 160 260 300 3000
Thickness (ft)
Net 300 300 300 120 120 195 225 2225
Interval 9,500 - 13,0000 10,000 - 14,000 12,000 - 16,400 3,3000 - 10,000 10,000 - 16,400 6,500 - 13,000 88,000 - 14,000 3,300 - 16,400
Deepth (ft)
Averagee 11,000 12,000 14,000 7
7,500 12,000 9,500 11,500 12,0000
Reeservoir Pressure Normal Normal Normal Noormal Normal Normal Normal Normal
Properties
Reservoir
Avverage TOC (wt. %) 2.0% 2.0% 2.0% 2

2.2% 2.2% 2.5% 2.5% 2.55%
Thermal Maturity (% Ro
o) 0.85% 1.15% 1.50% 1.15% 1.60% 0.85% 1.15% 1.600%
Claay Content Low/Mediuum Low/Medium Low/Medium Meedium Medium
m Medium Medium Meddium
Gaas Phase Assoc. Gaas Wet Gas Dry Gas Weet Gas Dry Gass Assoc. Gas Wet Gas Dry Gas
Resource
2
GIP
P Concentration (Bcf/f/mi ) 25.5 55.7 91.3 2
20.1 36.1 15.2 45.4 700.2
Rissked GIP (Tcf) 78.5 120.7 250.4 2
25.8 296.8 12.6 22.2 4722.4
Rissked Recoverable (Tccf) 6.3 24.1 50.1 5.2 59.4 1.0 4.4 944.5
Taable VI-2. Shale Oil Reservo

oir Properties and Resourcees of Brazil
Parana Solimoes Amazonas
Basic Data
2
(7447,000 mi ) (350,000 mi ) (230,000 mi )
Shale Formation onta Grossa
Po Jandiatuba Barreirinha
Geologic Age Devonian Devonian Devonian
D
Depositional Environm
ment Marine Marine Marine
2
Prosspective Area (mi ) 25,600 18,050 8,560 5,520 3,2260
Physical Extent
Organically Rich 1,000 1,000 160 260 3000

Thicckness (ft)
Net 300 300 120 195 2225
Interval 9,500 - 13,0000 10,000 - 14,000 3,300 - 10,000 6,500 - 13,000 8,000 - 14,000
Deptth (ft)
Average 11,000 12,000 7,500 9,500 11,500
Reseervoir Pressure Normal Normal Normal Normal Norrmal
Properties
Reservoir
Averrage TOC (wt. %) 2.0% 2.0% 2.2% 2.5% 2.55%

Therrmal Maturity (% Ro) 0.85% 1.15% 1.15% 0.85% 1.15%
Clayy Content Low/Medium
m Low/Medium Medium Medium Meddium
Oil Phase
P Oil Condensate Condensate Oil Condeensate
Resource
2
OIP Concentration (MMbb
bl/mi ) 26.8 11.4 5.5 18.3 8.7
Riskked OIP (B bbl) 82.4 24.7 7.1 15.1 4.3
Riskked Recoverable (B bb
bl) 3.30 0.99 0.28 0.61 0.17
June, 2013 VI-2

INTROD
DUCTION AND
A GEOL
LOGIC OVE
ERVIEW
Brazil
B has 18
8 onshore sedimentary
s y basins, of which 14 b
basins may have petro
oleum
source ro
ocks. Howe t 1980s Brazil has foccused mainlly on its offsshore oil and
ever, since the d gas
resource
es, while the
e onshore ba
asins have seen less a
activity. On
nly two onsh
hore basins have
significan
nt oil and ga
as output (Am
mazonas an
nd Paraná). Relatively ffew conventtional oil and
d gas
wells hav
ve been drilled to the deep
d source
e rock intervvals in these
e basins. S
Shale explorration
drilling ha
as not yet occurred.
o As
s a result, ge
eologic data
a on the sha
ale source ro
ocks in Brazzil are
relatively
y scant.
Brazil’s
B Natio
onal Oil and Gas Agency (ANP) hass conducted
d exploration
n surveys, m
mostly
gravity and
a magnetics with min
nimal drilling
g, on four o nshore basiins: the Am
mazonas, Pa
arana,
1
Parnaiba
a, and part of
o the Sao Francisco.
F Recently A NP estimate
ed that Brazzil may have
e 208
Tcf of shale gas re
esources, ba ee onshore Brazilian basins
ased on a rough anallogy of thre
a, Parecis, Recôncavo) with the Barnett
(Parnaiba B Sha
ale in the F
Fort Worth B exas.2
Basin of Te
Petrobras, the nation
nal oil comp
pany, recenttly drilled itss first shale oil well in A
Argentina bu
ut has
not anno s for shale drilling in Brazil.
ounced plans
EIA/ARI
E has assessed th source potential of three of Brazil’ss onshore basins
he shale res
(Paraná, Solimões, and Amazo
onas). The
ese basins have prosp
pective shalles that sou
urced
commerc
cially produc
ctive conven
ntional oil an
nd gas fieldss as well as sufficient a
available geo
ologic
data for resource an
nalysis. In addition,
a Bra
azil has a h alf-dozen otther basins which may have
otential, but their sourc
shale po ce rock sys
stems are le
ess proven and/or the
ey lack suffficient
available
e geologic data.
d Thes
se six otherr basins -- which were
e reviewed but not forrmally
assessed
d in this stud
dy -- include
e the Potigua
ar, Parnaiba
a, Parecis, R
Recôncavo, S
Sergipe-Alag
goas,
Sao Fran
ncisco, Taub
baté, and Ch
haco- Paraná
á.
1. PARANÁ
P BA
ASIN
1.1 In
ntroduction
Located in Brrazil’s econo

omically mos
st developed
d southern rregion, the P
Paraná Basin
n is a
5 million km2) deposition
large (1.5 nal feature that
t 747,000 mi2 within Brazzil, with addittional
covers 7
area in Paraguay,
P Uruguay,
U and
d northern Argentina,
A F
Figure VI-2. Major infrrastructure in the
region includes the Brazil-Bolivia
B a and Urugua
aiana-Porto Alegre pipe
elines.
June, 2013 VI-3

Figuree VI-2: Prospecctive Shale Gaas and Shale O

Oil Areas in thhe Paraná Bassin
Source: ARI,
A 2013
Conventional
C petroleum exploration began in th
he Paraná B
Basin during
g the 1890’ss, but
the first (and
( thus far only) comm
mercial disco
overy came in 1996, witth the low-pe
ermeability B
Barra
Bonita gas field of limited outpu
ut (36 Bcf to h 2009).3 A
otal through Approximately 124 petro
oleum
ve been drillled in the Brrazil portion of the Para
wells hav aná Basin, a low drilling density of 1 well
per 10,000 km2. In addition, some
s 30,000 ave been accquired.4 O
0 km of 2D seismic ha Only a
fraction of
o this data set
s has been
n published and
a made avvailable for o
our study.
The
T Paraná Basin conttains up to 5 km (loca of Paleozoic and Mesozoic
ally 7 km) o
sedimenttary rocks th
hat range fro
om Late Ordo
ovician to C retaceous. Its western border is de
efined
by the Asuncion
A Arc
ch, related to
t Andean thrusting,
t w
while the easst is truncatted by the S
South
Atlantic tectonic
t marrgin.5 On th
he north the
e basin onla ps Precamb
brian basem
ment. Some
e two-
thirds of the basin is covered by
b flood bas
salts, partly obscuring tthe underlying geology from
seismic and
a increasing the cost of
o drilling.
June, 2013 VI-4

The
T structure
e of the Para
aná Basin appears
a to b
be moderate
ely simple, a
at least base
ed on
available
e data, consiisting of a ge
entle synclin
ne with mino
or faulting an
nd secondarry folding, Fiigure
VI-3. Faults, predo
ominately no
ormal in oriientation, arre controlled
d by older basement ffaults
(aulocogens) which separate
s med tracts off the basin interior. How
larrge undeform wever, nume
erous
igneous sills and dikes,
d related to emp
placement o
of the flood
d basalts d
during the Early
ous, intrude the sedimen
Cretaceo ntary sequen
nce. More d
detailed seissmic revealss the presen
nce of
numerou
us smaller faults, Figures
s VI-4 and VI-5.
V
The
T main pettroleum sourrce rock in the
t Paraná B
Basin is the Devonian b
black shale o
of the
Ponta Grrossa Forma
ation (Emsia
an/Frasnian)), Figure VII-6. This formation rang
ges up to 600 m
thick in the
t o the basin, averaging about 300 m thick. TO
center of OC of the P
Ponta Grossa
a Fm
reaches up to 4.6% but more ty
ypically is 1.5% to 2.5%
%. The mosstly Type II kerogen sou
urced
natural gas
g that mig
grated into conventional
c sandstone reservoirs o
of the Late Carbonifero
ous to
é Group.6
Early Perrmian Itararé
The
T Paraná Basin has remained at moderatte burial de
epth throug
ghout its hisstory.
Consequ
uently, the bulk
b of therrmal matura
ation took p
place during
g the late JJurassic to early
Cretaceo
ous igneous episode. Most
M of the basin rema e (Ro <0.5%), but
ains thermallly immature
there are
e sizeable co
oncentric win
ndows of oil-, wet-gas-, and dry-gass maturity in the deep ce
entral
basin are
ea.
A second less prolific source

s rock araná Basin is the Perrmo-Triassicc Irati
k in the Pa
Formatio
on. This non-marine bittuminous un
nit sourced o
oil trapped in biodegrad
ded conventtional
sandston
nes (tar sand
ds) of the Pe
ermian and Triassic
T o Bonito and Pirambóia fformations.7 The
Rio
Irati Form
mation is wid
despread an
nd can be organic-rich, a
averaging 8--13% TOC o
of Type I kerrogen
with peak
ks to 24%, but
b the shale
es are quite thin and the
ermally immature (Ro <0
0.5%). Petro
obras
is mining
g Irati oil sh
hale from the
e surface att São Mateu
us do Sul a
and processsing it using rock
pyrolysis. Although the Irati Fm
m may be the
ermally matu
ure in the deep Paragu
uay portion o
of the
8
Paraná Basin,
B its Brrazil extensio
on was not assessed
a du
ue to low the
ermal maturitty.
June, 2013 VI-5

Figure VII-3. Cross-Secction of the Paaraná Basin, B

Brazil
Source: ANP, 2012
Figure VI-4:
V Seismic Time
T Section Showing Regional Moderatte Block Faultting of the Parraná Basin, Brrazil
Source: Pettersohn, 2003
June, 2013 VI-6

Figure VI-5:
V Seismic Time Section of the Paranáá Basin Showiing Small Fauults.
Figure VII-6: Stratigraphy of Paraná Basin

B Showin
ng Source Rocck Shales, Devvonian Ponta Grossa Formaation
June, 2013 VI-7

1.2 Reservoir
R Properties
The
T prospecttive area of organic-rich
h shale in th
he Devonian
n Ponta Grosssa Formation of
the Para
aná Basin is
s estimated at approxim 00 mi2, of which 25,600
mately 66,50 0 mi2 is in th
he oil
window; 18,050 mi2 is in the wett gas/conden
nsate therm
mal maturity w d 22,840 mi2 is in
window; and
the dry gas
g window. The Devon
nian shale av
verages abo
out 300 m th
hick (net), 11
1,000 to 14,0
000 ft
deep, and has estima
ated 2.0% average
a TOC
C. Thermal m
maturity (Ro) ranges from
m 0.85% to 1.5%
ng mainly on
dependin n depth. Porosity is es
stimated at about 4% a
and the presssure gradie
ent is
assumed
d to be hydro
ostatic.
1.3 Resource
R Assessmen
A nt
Risked,
R techn
nically recov
verable shale
e gas and sshale oil reso
ources from Devonian P
Ponta
Grossa (Frasnian) bllack shale in
n the Paraná
á Basin are e
estimated att 81 Tcf of sshale gas an
nd 4.3
arrels of shalle oil and condensate, Tables
billion ba T VI-1 a
and VI-2. Riisked shale gas and sha
ale oil
in-place is estimated
d at 450 Tcff and 107 billion barrelss. The playy has moderrate net reso
ource
6 to 91 Bcff/mi2 for sha
concentrrations of 26 d 11 to 27 million bbl//mi2 for sha
ale gas and ale oil
dependin
ng on therma
al maturity window.
w
1.4 Recent
R Activity
No
N shale gas
s/oil exploration activity has
h been rep
ported in the
e Brazil portiion of the Pa
araná
Basin, although Ame
erisur Energy
y has discus
ssed the sha
ale potential of the Creta
aceous Irati F
Fm in
the Parag
guay portion
n of the basin
n.
June, 2013 VI-8

2. SOLIMÕES
S S BASIN
2.1 In
ntroduction
Located in northern Brazil, the Solimões Basin 0 mi2 of Am

n extends ovver 350,000 mazon
jungle, Figure VI-7. While less prolific
p than Brazil’s offs hore fields, tthe Solimõe
es is the country’s
oductive ons
most pro 0,000 bbl/d of oil and 12 million m3/d of
shore basin, with outputt of about 50
natural gas from the Carbonifero
ous Juruá Fo ndstone.9
ormation san
Figure VI-7:
V Prospecttive Shale Gass and Shale O
Oil Areas in thee Solimões Baasin
Source: AR
RI, 2013
These
T conve
entional rese
ervoirs direc
ctly overlie a
and were so
ourced by m
marine-depo
osited
source rocks
r within the Devon
nian Jandiattuba (mostlyy), Jaraqui and Ueré fformations. The
Jandiatuba Fm (Fras ains a 50-m thick sectio n of radioacctive (“hot”) black shale, with
snian) conta
TOC ranging from 1% to 4% (av
verage 2.2% gure VI-8. Thermal ma
%; maximum 8.25%), Fig aturity
y in the dry gas
is mostly g window (Ro >1.35%), apart from
m a small are
ea in the easst that is we
et-gas
Ro 1.0% to 1.3%).10
prone (R
June, 2013 VI-9

Figure VI-8:
V Black Shaale in the Devo
onian Jandiattuba Formatioon of the Solim
mões Basin is about 40 m Thick
with 1% to 4%
% TOC at this Location
Source: Claark, 2003
Figure VI-9, a regional cross-sectio

c n oriented in
n the basin’s strike dire
ection, show
ws the
mostly fla
at-lying but still
s moderattely faulted Devonian sh
hale at depths of 2 to 3 km. Note tthat a
dip-oriented cross-se
ection would
d reveal the steeper dip
ps. Structura
al uplifts define several sub-
basins. The easterrnmost Juruá
á Sub-basin
n, with up to
o 3.8 km of ssedimentaryy rocks, acco
ounts
for most of the con
nventional oiil and gas found
f in the
e Solimões Basin, inde
eed in the e
entire
Paleozoic sequence
e of South America. The
T shale’s thermal history is con
ntrolled morre by
y to igneous intrusions ra
proximity ather than siimple burial depth.
June, 2013 VI-10

Figure VI-9: Cross-S

Section (Strikee Direction) of the Solimõess Basin, Show wing Flat-lyingg but Moderateely
Faulted Devonian
D Shalee (Green) at D
Depths of 2 to 3 km.
Source: Claark, 2003
2.2 Reservoir
R Properties
The
T total estimated pros a of organicc-rich shale in the Devo
spective area onian Jandia
atuba
Formatio
on of the Solimões Basin ed at 63,000 mi2, of whicch 8,560 mi2 is in the we
n is estimate et gas
thermal maturity win
ndow and 54,750
5 mi2 is in the drry gas wind
dow. The JJandiatuba sshale
averages
s about 120
0 ft thick (ne
et), 7,500 to
o 12,000 ft d
deep, and h
has estimate
ed 2.2% ave
erage
TOC. Po
orosity is esttimated at 4%
% and the pressure grad
dient is assu
umed to be h
hydrostatic.
2.3 Resource
R Assessmen
A nt
Risked,
R tech
hnically reco
overable shale gas an
nd shale oil resourcess from Devo
onian
Jandiatuba black sh
hale in the Solimões
S Ba
asin are esttimated at 6
65 Tcf of sh
hale gas and
d 0.3
billion ba
arrels of shalle oil, out of risked shale
e gas and sh
hale oil in-pla
ace of 323 T
Tcf and 7.1 b
billion
barrels, Tables
T VI-1 and VI-2. The
T play has
s a moderate
e net resourrce concentrration of 20 to 36
Bcf/mi2 fo s and 5.5 million bbl/mi2 for
or shale gas f shale oil.
2.4 Recent
R Activity
No
N shale gas
s/oil exploration activity has
h been rep
ported in the
e Solimões B
Basin.
June, 2013 VI-11

3. AMAZONA
A AS BASIN
3.1 In
ntroduction
Extending
E ov
ver more tha m 2 of Amazzon forest in
an 230,000 mi n remote northern Braziil, the
Amazona
as Basin is an
a ENE-WSW trending structural tro
ough bounded by the Purus and Ga
arupa
arches, Figure
F VI-10. The firs
st conventional petroleu
um fields we
ere discovered in 1999
9 and
commerc
cialized startting in 2009
9, when the Urucu-Coarri-Manaus ga
as and LPG
G pipeline syystem
was com
mmissioned. By late 2010, this pipeline was tran
nsporting abo
out 0.2 Bcfd
d, mainly from
m the
nearby Solimões
S sin, along with smaller volumes
Bas v from
m the Amazo
onas Basin.
Figure VII-10: Prospecttive Shale Gass and Shale O

Oil Areas in thee Amazonas B
Basin
Source: ARI, 2013
June, 2013 VI-12

The
T Amazona
as Basin con
ntains up to 5 km of mo
ostly Paleozo
oic sedimenttary rock tha
at are
covered by Mesozoiic and Ceno
ozoic strata, Figure VI- 11. While n
not structura
ally complexx, the
Amazona
as Basin was
w extensiv
vely intrude
ed by igneo
ous activity during the
e Early Jura
assic,
particularly in the eastern
e half of the ba
asin. This was follow
wed by Cen
nozoic strucctural
deformattion that included extensional block
k and strike--slip faulting
g and salt te
ectonics. Fiigure
VI-12 illustrates the relatively
r sim
mple local strructure in on
ne portion off the basin.
Figure VII-11: Devonian

n (Frasnian) Marine
M Black Shale
S Ranges from 2 to 4 Km m Deep in thee Amazonas Basin.
Faultts Appear to be
b Widely Spacced but Igneoous Intrusionss are Commonn.
Source: Dignart and Vieira, 2007
Figure VI-12: Seismic Time Section in

n the Amazonas Basin Show
wing Simple S
Structure of thhe Devonian M
Marine
Black Shale.
Source: Dignart and Vieira, 2007
June, 2013 VI-13

The
T petroleum
m system in
n the Amazo
onas Basin i s broadly similar to thatt in the Solim
mões
Basin. Up
U to 160 m (average 80
0 m) of lamiinated marin
ne-deposited
d black shale
es are prese
ent in
the Devo
onian Barreirinha Formation (Frasn
nian), which
h was the ssource rock for conventtional
sandston
nes of the overlying
o ova Olinda Formation.1 1
No Ranging from 2 to 4 km deep
p, the
Devonian
n shale has 2% to 5% TOC
T that con
nsists of Typ
pe II kerogen
n. The Devo
onian is therrmally
immature
e (Ro < 0.5%
%) in the shallow and western
w port ions of the basin, increasing to we
et gas
prone in the deeperr center and
d dry gas prrone in the more heaviily intruded east. Addittional
marine black
b shales
s occur in th
he Silurian Pitinga
P mation, but these conta
Form ain less than
n 2%
TOC and
d thus were not
n assessed.
3.2 Reservoir
R Properties
Based
B on th
he limited geologic
g con ble for the Amazonas Basin, the total
ntrol availab
estimated
d prospectiv
ve area of organic-rich
h shale in tthe Devonia
an Barreirin
nha Formatio
on is
estimated
d at about 54,000
5 mi2, of which 5,5
520 mi2 is in
n the oil window; 3,260 mi2 is in the
e wet
gas and condensate m 2 is in the
e window; and 44,890 mi e dry gas wiindow. The
e Devonian sshale
s 195-225 ftt thick (net), 9,500-12,00
averages 00 ft deep, and has estimated 2.5%
% average T
TOC.
Porosity is estimated
d at 4% and the pressure
e gradient iss assumed to
o be hydrosttatic.
3.3 Resource
R Assessmen
A nt
Risked,
R techn
nically recov
verable shale gas and shale oil re
esources fro
om the Devo
onian
Barreirinha Formatio
on (Frasnian)) black shale
e in the Ama
azonas Basin are estima
ated at 100 T
Tcf of
shale gas and 0.8 biillion barrels
s of shale oil and conden
nsate, out o
of risked sha
ale gas and sshale
ce of 507 Tc
oil in-plac cf and 19 billion barrels, Tables VI-1 and VI-2. T
The play has a moderatte net
resource 1 to 70 Bccf/mi2 for sh
e concentrations of approximately 15 hale gas and
d 9 to 18 m
million
bbl/mi2 fo
or shale oil.
3.4 Recent
R Activity
No
N shale ga
as/oil exploration leasing or drilli ng activity has been reported in
n the
Amazona
as Basin.
June, 2013 VI-14

4. OTHER
O BAS
SINS
More
M than a dozen othe
er sedimenta
ary basins o
occur in onsshore Brazill. Most havve no
commerc
cial oil and
d gas production and some lackk identified petroleum generation and
maturatio
on systems. Some of these
t basins
s may have
e shale pote
ential but public data arre not
currently sufficient fo
or detailed characteriza
c ation and asssessment b
by EIA/ARI. However, tthese
basins could
c be pro
ospective fo
or shale exp
ploration an d should be
e assessed once addittional
geologic data becom
me available. Six of the more
m promissing basins include:
 Potiguar Basin. This Neocomia an rift basin

n in northeasstern Brazil extends ove er an
2
onshore area
a of abouut 33,000 km m plus a m much larger area offshorre. The onsshore
portion off the basin contains
c up to 4 km of mostly Creta aceous deposits. The basin
comprises s a number of smaller fa ault blocks, wwith major sstructures tre
ending north heast-
southwes st, Figure VI-13. Oil pro oduction currrently averag ges 125,000 0 bbl/day, ma aking
the Potiguuar Basin Brrazil’s seconnd largest prooduction areea after the o
offshore Cam mpos
Basin. Th he 5,000 mo ostly onshoree wells have e recovered a total of 0.55 billion barre
els of
12
oil and 0.5
5 Tcf of natu
ural gas.
Figuree VI-13: Cross-Section of the Potiguar Baasin, Showing the Pendênciia and Alagam
mar Formationns.
Source: ANP, 2003
June, 2013 VI-15

The Upper Cretaceo ous (Barrem

menian) to PPaleocene P Pendência Formation, a rift
sequence e, is conside
ered the main petroleuum source rock in the Potiguar B Basin,
g about 4% TOC of Typ
containing pe I kerogen
n. The Alag gamar Forma ation contain
ns up
to 6% TO OC of Type es I and II kerogen,
k bu
ut is shallow
w (<1 km) in the onsho ore.13
However, shale reso ources weree not assesssed in the e Potiguar BBasin due tto its
apparent structural co
omplexity an
nd the lack of available data contro
ol on source
e rock
depth, thickness, and
d thermal maaturity.
 Parnaiba a Basin. Alsoo located in northeastern n Brazil, thiss large (600,000-km2) cirrcular
basin con ntains up to 3.5 km of sedimentary
s rocks within n a relativelyy simple -- a
albeit
heavily inntruded -- structural settting. The De evonian Pim menteiras Fo ormation con ntains
marine black shale up to 300 m thick witth 2.0-2.5% % TOC. Lo ocal indepen ndent
operator MPX Energ gia S.A. has s reported the compan ny logged g gas shows while
drilling thrrough a 23-m
m thick “natu
urally fracturred” Devonia erval.14
an shale inte
Figure VI-14 shows the distributtion of thickn ness, depth, TOC, and thermal ma aturity
of the Pim
menteiras at a conventioonal explorattion well in a
an undisclossed portion o
of the
basin. Organic-rich shale
s in this
s well totals about 50 m thick at a d depth of 2,000 to
2,200 m. The TOC ranges
r up too 4%, averag ging 2.5%, bbut is therma
ally immaturre (Ro
~0.5%) at this locatio
on. ANP ha as projected d that therm
mal maturity reaches oil-- and
y gas-prone levels in the
eventually e deeper pa arts of the ba
asin (1,600 to 2,500 m)), and
estimatedd 64 Tcf of recoverable e shale gas resources, based on a analogy with the
15
Barnett Shale play in the Fort Woorth Basin.
However, as just no oted available data sugggests the PPimenteiras Fm is therrmally
immature (Ro 0.5%) at a depth of 2,200 m and may o only just be
e entering thhe oil
window at
a 2,500 m. Other res searchers hhave reporteed this unit to be therrmally
immature, apart fromm local contact zones near the abundant ign neous intrussions.
Note also
o that the ba
asin lacks co
ommercial ooil and gas p
production. G
Given the spparse
data available for th
his study, EIA/ARI
E did not assesss the shale potential o of the
Parnaiba Basin.
 Parecis Basin.
B A fro
ontier non-prroductive se dimentary b
basin in north
hern Brazil. ANP
has noted
d that radioaactive dark shale
s avera ges some 550 m thick inn the deep basin
grabens. As much as a 106 m was w logged a at a depth oof 4 km in oone conventtional
m well. AN
petroleum NP recently y estimated that 124 Tcf of sha ale gas ma ay be
recoverab
ble based ono the Barne ett Shale co
omparison. However, d data availabble to
EIA/ARI were
w not suufficient for assessing
a th
he shale potential of the Parecis B Basin,
which doe
es not produuce oil and gas.
June, 2013 VI-16

Figuree VI-14: Sourcce Rock Thickkness, Depth, TOC,

T and Theermal Maturityy of the Pimiennta Shale in thhe
Parrnaiba Basin
Source: AN
NP, 2003
 Recôncavo Basin. One of man ny failed rift basins in ea

astern Brazil, the Recôn ncavo
Basin wa as the counttry’s first pro
oductive pe etroleum bassin. Over 6 6,000 wells have
drilled, of which some e 1,800 exte
ent producin g wells makke 50,000 bb bl/day of oil. The
Gomo Member of the t Lower Cretaceous Candeias Formation, deposited in a
lacustrinee environme ent during early
e rifting, is considerred the maiin source ro ock.16
Although quite thick (200-1,000 0 m), the G Gomo Memb ber has relaatively low T TOC,
mostly ranging from 1% to 2%, Figure VI-1 5. ANP reccently estimated recove erable
shale gas s resources in the Rec côncavo Bassin to be 20 Tcf. How wever, base ed on
EIA/ARI’s s screening criteria,
c the Gomo
G Memb ber appearss to be below
w the 2% ave erage
TOC cuto off and its shale potential was not asssessed.
June, 2013 VI-17

Figure VII-15: The Gommo Member of the Lower Creetaceous Can deias Formatiion in the Reccôncavo Basinn can
be Thick (>1 km) but is Low
L in TOC (<22%) and Mostly Thermally IImmature (Ro < 0.6%)
Source: ANP, 2003
 Sergipe-A Alagoas Ba asin. Anoth her Neocom ian rift basin in northeaastern Brazil, the
Sergipe-AAlagoas Bas sin extends over an onsshore area of 12,600 kkm2 as well as a
consideraably larger area offshore e. The basin
n comprises a number o of relatively ssmall,
isolated and
a tilted fault blocks, with
w major sstructures trrending northeast-southwest,
17
Figure VI-16.
V Too date some e 57 conveentional oil and gas fiields have been
discovereed in the ba asin, with nearly 5,000
0 wells drille
ed, primarilyy in the onsshore
portion off the basin. Figure VI-1 17 shows a detailed crooss-section oof the Camp po de
Pilar Field
d, showing th he numerous closely sp aced faults.
June, 2013 VI-18

The Crettaceous Ma aceió Forma ation (Neoap ptian) is the main sou urce rock inn the
Sergipe-AAlagoas Bas sin. The Ma aceió Fm co ontains orga anic-rich bla
ack shales, mmarls
and calcilutites that were
w depos sited in a laccustrine, noon-marine se etting which may
uctile behaviior during hy
exhibit du ydraulic stim
mulation. Th he higher-qu uality source
e rock
shales within the Ma aceió Fm av verage abou ut 200 m th hick (maximmum 700 m)) and
18
average 3.5%
3 TOC (m maximum 12 2%; Type II kkerogen). However, th his basin wa
as not
assessed d due to its structural com
mplexity and d lack of ava
ailable geolog gic data.
 São Fran ncisco Bas sin. Very little conven ntional explo oration has occurred in n this
frontier basin in Mina as Gerais and
a there iss no significcant commercial oil and d gas
19
production. Potenttial source rocks
r are off Proterozoic age, mucch older than the
productivee shales of North
N America, which arre about 400 0 m thick witthin a moderrately
faulted structural setting at depth
hs of 2 to 5 kkm. Shell reeportedly pla
ans to drill itss first
Brazilian exploration well for unconvention
u nal gas in the São F Francisco B Basin,
ppears to be
although this effort ap e targeting tig
ght sandstone and carb bonate forma ations
20
an shale. The São Fra
rather tha ancisco bassin was not a assessed byy EIA/ARI due to
the lack of an esta ablished hyd drocarbon g generation ssystem and d the pauciity of
available geologic data.
 Taubaté Basin. Lo ocated in sooutheast Bra azil, the Tauubaté Basinn is a north heast-
southwesst trending trrough relate
ed to the Attlantic Ocean continenta al breakup. The
Oligocenee Tremembé é Formation contains up p to 500 m of organic-rrich depositss that
were deposited withinn a non-mariine lacustrinne environme ent. Within tthis interval there
is a 50-m thick sectio
on of laminatted black sh ale with ave
erage 10% T TOC.21 How wever,
222
this deposit is thermaally immaturre oil shale and is no ot consideredd prospectivve for
shale gass and oil exp
ploration.
 Chaco-Pa araná Basin. Not to be confuse ed with the Paraná Ba asin, the Ch haco-
2
Paraná Basin is a larg ge (500,000-km ) ellipticcal-shaped ddepositional feature mainly in
northern Argentina, Paraguay
P an
nd Uruguay . However,, only a veryy small area a lies
uthern Brazil. The basin
within sou n contains u p to 5 km off early Paleo
ozoic (Ordovvician
to Devoniian) sedimen ntary and ignneous rockss, overlain in
n the northea
ast particularly by
Cretaceou us basalt flo ows. Aboutt 1.2 km of Devonian m marine-depossited sandsttones
(Cabure Formation)
F and
a black sh hales (Rinco n Fm) is preesent. Thesse are overlaain by
up to 2.3 km of Perm m-Carbonife erous sandsttones and b black shaless (Sachayoj Fm).
The Chac co-Paraná Basin
B was noot assessed due to its ssmall extent and lack off data
control wiithin Brazil.
June, 2013 VI-19

Figure VI-16:
V Cross-ssection of the Alagoas
A Sub-basin, Showinng Faulted Peendência and A
Alagamar Souurce
Ro
ock Shales.
Source: ANP, 2007 (no verttical scale)
Figure VI-17: Detailed

d Cross-sectio
on of the Cam
mpo de Pilar Fiield in the Serrgipe-Alagoass Basin, Show
wing
Numerous Closely
C Spacedd Faults.
Source: ANP, 2007
REFERE
ENCES
1
Neves, A.,
A De Sordi, D., and Egorov, V.I., 2010. “Frontier Basins Onsh hore Brazil.” A
AAPG Searcch and
Discove
ery Article #1 10237, Adapted from oraal presentatioon at American Associa ation of Petro
oleum
Geologis
sts, Internatio
onal Conferen
nce and Exhibition, Rio de
e Janeiro, Bra
azil, Novembeer 15-18, 200
09, 16
p.
June, 2013 VI-20

2
Nationall Oil and Gas
s Agency (ANP), “Reservas Brasileiras de Gás Convvencional e P
Potencial Para
a Gás
Não Connvencional,” undated
u prese
entation acce
essed April 14
4, 2013.
3
Amerisu
ur Resources PLC, Investor Presentation, Decemberr 2009, 36 p.
4
hn, E., 2008. “Bid Round 10: Parana Basin.” Nation
Petersoh nal Oil and Ga
as Agency (A
ANP), 59 p.
5
Milani, E.J.
E and Zalán n, P.V., 1999. “An Outline
e of the Geolo
ogy and Petro
oleum System
ms of the Pale
eozoic
Interior Basins
B of Sou
uth America.” Episodes, vol. 22, p. 199
9-205.
6
Vesely, F.F., Rostirolla, S.P., Appii, C.J., Kraft, E.P., 2007. ””Late Paleozooic Glacially R
Related Sand dstone
Reservooirs in the Parrana Basin, Brazil.
B Americ can Associatioon of Petroleu
um Geologistts, Bulletin, vo
ol. 91,
p. 151-160.
7
Araújo, C.C., Yamam moto, J.K., Ro W., Dourado, J.C. and Ferrreira, F.J.F., 2003.
ostirolla, S.P.,, Malagutti, W
egrated Analy
“An Inte ysis of Tar Sa
and Occurrences in Paraná á Basin, Brazzil.” 8th Interrnational Con
ngress
of the Brazilian Geop
physical Socie
ety, Rio de Jaaneiro, Brazil, 14-18 Septem mber 2003.
8
Amerisu
ur, Investor Prresentation, March,
M 2013, 30
3 p.
9
Garcia, G.,
G Araújo, L..M., and Wannderley Filho, J.R., 2013. ““Basin Modeling Uncertain nties Related to the
Hybrid Devonian
D Petroleum Syste em (Conventio onal Plus Atyppical) of the S
Solimões Bassin (Brazil).” A
AAPG
Search and Discoverry Article #120106, Adapteed from AAPG G Hedberg Conference, Petroleum Sysstems:
Modeling The Past, Planning
P The Future, 1-5 October
O 2012,, Nice, Francee, 5 p.
10
Clark, J.,
J 2003. “Bra
azil Round 4: Solimões Bas
sin.” Nationa
al Oil and Gass Agency (AN
NP), 38 p.
11
Dignartt, A. and Vieirra, J.R., 2008
8. “Round 10: Amazonas Basin.” Natio
onal Oil and G
Gas Agency (A
ANP),
52 p.
12
Lovatini, A., Myers, K., Watterson
n, P., and Cam mpbell, T., 20
010. “An Inteegrated Appro
oach to Explo
oration
Data in the
t Potiguar Basin,
B Offshoore Brazil.” Fiirst Break, Ma
ay, p. 55-59.
13
de Tars
so Araripe, P. 2003. “Brazil Round 4: Potiguar Basin
n.” National O gency (ANP), 38 p.
Oil and Gas Ag
14
MPX En
nergia S.A., News
N release, September 2, 2010.
15
Nationaal Oil and Ga
as Agency (AN
NP), “Unconv
ventional Hyd
drocarbons,” u
undated pressentation acce
essed
April 13,, 2013.
16
De Tars
so Araripe, P.., 2003. “Bras
sil Round 4: Recôncavo
R B asin.” ANP, 5
54 p.
17
na, R., 20087. “Brazil Round 10: Sergip
Fontes,, C. and Rann pe-Alagoas B
Basin.” ANP, 7
70 p.
18
PGS Reservoirs, 2007. “Compettent Person’s Report on th
he Petroleum Interests of M
Mercury Brazzil Ltd,
y Owned Sub
a Wholly bsidiary of Ero
omanga Hydro
ocarbons NL..” Prepared ffor Mercury B
Brazil Ltd., 51 p.
19
Clark, J.,
J 2003. “Bra
azil Round 4: São Francisc
co Basin.” AN
NP, 38 p.
20
Orihuela, R., 2013. “Brazil Prepares to Surpris
se Drillers thiss Time with G
Gas.” Bloomb
berg, Februaryy 8.
21
Bergam maschi, S., Ro
odrigues, R., and
a Pereira, E.,
E 2010. “Sh hale from the Tremembé F Formation, Taaubaté
Basin, Brazil.”
B AAP PG Search and Discove ery Article #8 80080, Adappted from ora al presentation at
America an Associationn of Petroleum
m Geologists, Internationa
al Conference
e and Exhibitio
on, Rio de Ja
aneiro,
Brazil, November
N 15--18, 10 p.
22
Mendoonça Filho, J..G., Chagas, R.B.A., Men nezes, T.R., Mendonça, J.O., da Silvva, F.S., Sab
badini-
Santos, E., 2010. “O Organic Facies of the Oligoocene Lacusttrine System in the Cenozo
oic Taubaté B
Basin,
Southerrn Brazil.” Inte
ernational Jou
urnal of Coal Geology, vol . 84, p. 166-178.
June, 2013 VI-21

VII. Other South America EIA/ARI World Shale Gas and Shale Oil Resource Assessment
VII. OTHER SOUTH AMERICA
SUMMARY
Four other countries in South America (Bolivia, Chile, Paraguay, and Uruguay) have
prospective shale gas and shale oil potential within marine-deposited Cretaceous and Devonian
shale formations in three large basins: the Paraná Basin of Paraguay and Uruguay; the Chaco
Basin of Bolivia and Paraguay; and the Magallanes Basin of Chile, Figure VII-1. (Extensions of
these basins within neighboring Argentina and Brazil were assessed in separate chapters.)
Figure VII-1: Prospective Shale Gas and Shale Oil Resources in Bolivia, Chile, Paraguay, and Uruguay.
Source: ARI, 2013
June, 2013 VII-1

Risked, technically recoverable shale gas and shale oil resources in these four other
South American countries are estimated at 162 Tcf and 7.2 billion barrels, Tables VII-1 and VII-
2. The geologic setting of this region generally is favorably simple, with mostly gentle structural
dip and relatively few faults or igneous intrusions (apart from surface basalt flows). Technically
recoverable shale resources by country are: Bolivia (36 Tcf; 0.6 billion barrels); Chile (49 Tcf;
2.4 billion barrels); Paraguay (75 Tcf; 3.7 billion barrels); and Uruguay (2 Tcf; 0.6 billion barrels).
Initial shale-related leasing and evaluation has been reported in Paraguay and Uruguay within
existing conventional petroleum license areas.
Table VII-1A. Shale Gas Reservoir Properties and Resources of Bolivia, Chile, Paraguay, and Uruguay.
Parana
Basin/Gross Area
Basic Data
2
(747,000 mi )
Shale Formation Ponta Grossa Cordobes
Geologic Age Devonian Devonian
Depositional Environment Marine Marine
2
Prospective Area (mi ) 3,830 3,260 2,350 2,690 1,230
Physical Extent
Organically Rich 800 800 800 800 800

Thickness (ft)
Net 240 240 240 240 240
Interval 10,000 - 11,000 11,000 - 12,000 12,000 - 13,000 3,300 - 5,000 5,000 - 7,000
Depth (ft)
Average 10,500 11,500 12,500 4,000 6,000
Reservoir Pressure Normal Normal Normal Normal Normal
Properties
Reservoir
Average TOC (wt. %) 2.0% 2.0% 2.0% 3.6% 3.6%

Clay Content Low/Medium Low/Medium Low/Medium Low/Medium Low/Medium
Gas Phase Assoc. Gas Wet Gas Dry Gas Assoc. Gas Wet Gas
Resource
2
Risked GIP (Tcf) 9.1 17.3 20.1 4.2 9.1
Risked Recoverable (Tcf) 0.7 3.5 4.0 0.3 1.8
Table VII-1B. Shale Gas Reservoir Properties and Resources of Bolivia, Chile, Paraguay, and Uruguay.
Chaco Austral-Magallanes
Basin/Gross Area
Basic Data
2 2
(157,000 mi ) (65,000 mi )
Shale Formation Los Monos Estratos con Favrella
Geologic Age Devonian L. Cretaceous
2
Prospective Area (mi ) 6,870 9,890 14,210 1,580 1,920 1,500
Physical Extent
Organically Rich 1,500 1,500 1,500 800 800 800

Thickness (ft)
Net 450 450 450 400 400 400
Interval 3,300 - 9,000 7,000 - 12,000 10,000 - 16,400 6,600 - 10,000 10,000 - 14,500 11,500 - 16,400
Depth (ft)
Average 7,000 10,000 13,000 8,000 12,000 13,500
Slightly Slightly Slightly
Properties
Reservoir

Average TOC (wt. %) 2.5% 2.5% 2.5% 3.5% 3.5% 3.5%
Clay Content Low Low Low Low/Medium Low/Medium Low/Medium
Gas Phase Assoc. Gas Wet Gas Dry Gas Assoc. Gas Wet Gas Dry Gas
Resource
2
Risked GIP (Tcf) 28.7 128.7 299.5 23.1 99.2 105.2
June, 2013 VII-2

Table VII-2A. Shale Oil Reservoir Properties and Resources of Bolivia, Chile, Paraguay, and Uruguay.
Parana
Basin/Gross Area 2
Basic Data
(747,000 mi )
Shale Formation Ponta Grossa Cordobes
Geologic Age Devonian Devonian
2
Prospective Area (mi ) 3,830 3,260 2,690 1,230
Physical Extent
Organically Rich 800 800 800 800

Thickness (ft)
Net 240 240 240 240
Interval 10,000 - 11,000 11,000 - 12,000 3,300 - 5,000 5,000 - 7,000
Depth (ft)
Average 10,500 11,500 4,000 6,000
Properties
Reservoir
Average TOC (wt. %) 2.0% 2.0% 3.6% 3.6%

Thermal Maturity (% Ro) 0.85% 1.15% 0.85% 1.15%
Clay Content Low/Medium Low/Medium Low/Medium Low/Medium
Oil Phase Oil Condensate Oil Condensate
Resource
2
OIP Concentration (MMbbl/mi ) 21.8 9.3 27.7 12.0
Risked OIP (B bbl) 10.0 3.6 11.9 2.4
Risked Recoverable (B bbl) 0.40 0.15 0.48 0.09
Table VII-2B. Shale Oil Reservoir Properties and Resources of Bolivia, Chile, Paraguay, and Uruguay.
Chaco Austral-Magallanes
Basic Data
(157,000 mi ) (65,000 mi )
Shale Formation Los Monos Estratos con Favrella
Geologic Age Devonian L. Cretaceous
2
Physical Extent
Organically Rich 1,500 1,500 800 800

Thickness (ft)
Net 450 450 400 400
Interval 3,300 - 9,000 7,000 - 12,000 6,600 - 10,000 10,000 - 14,500
Depth (ft)
Average 7,000 10,000 8,000 12,000
Slightly Slightly
Reservoir Pressure Normal Normal
Properties
Reservoir
Average TOC (wt. %) 2.5% 2.5% 3.5% 3.5%
Clay Content Low Low Low/Medium Low/Medium
Oil Phase Oil Condensate Oil Condensate
Resource
2
OIP Concentration (MMbbl/mi ) 46.0 18.7 48.4 14.5
Risked OIP (B bbl) 47.4 27.7 34.4 12.6
Risked Recoverable (B bbl) 2.37 1.39 1.72 0.63
June, 2013 VII-3

INTRODUCTION
This chapter discusses the shale potential of the other countries in South America
(Argentina, Brazil, and Colombia-Venezuela are assessed in separate chapters). As first
highlighted in EIA/ARI’s 2011 assessment, these other South American countries (Bolivia, Chile,
Paraguay, and Uruguay) have significant shale gas and oil resource potential in favorable
structural settings. Exploration shale drilling has not yet begun in the region although initial
shale leasing and evaluation are underway.
Bolivia. A significant natural gas exporter to Argentina and Brazil, Bolivia produces
natural gas from conventional reservoirs, mainly in the Chaco Basin in the southeast part of the
country. Following 2006 nationalization, YPFB administers investment and production in
Bolivia's oil and gas sector, while the Ministry of Hydrocarbons and Energy (MHE) and the
National Hydrocarbons Agency establish overall policy. Shale exploration or leasing have not
been reported in Bolivia.
Chile. ENAP, the national oil company of Chile, produces about 5,000 bbl/day mainly
from conventional reservoirs in the Magallanes basin.1 In March 2011 ENAP announced that it
will require companies bidding for conventional oil and gas exploration blocks to also explore for
shale gas. While exploration is underway for tight gas sandstone reservoirs in the basin, no
shale-specific exploration has been reported in Chile.
Paraguay. Paraguay does not produce oil and gas, although extensions of its
sedimentary basins are productive in both Argentina and Bolivia. Only two conventional
petroleum wells have been drilled in Paraguay during the past 25 years. Shale drilling has not
occurred in the country but President Energy is investigating the shale potential at its
conventional petroleum licenses in the Chaco Basin.
Uruguay. Uruguay also does not produce oil and gas, although extensions of its
sedimentary basins are productive in neighboring Brazil and Argentina. ANCAP (Administración
Nacional de Combustibles, Alcoholes y Portland), the state-owned oil company in Uruguay,
administers the country’s petroleum licensing. TOTAL, YPF, and others hold leases in the
onshore Paraná Basin and are evaluating the shale potential.
June, 2013 VII-4

Three major sedimentary basins with prospective organic-rich and marine-deposited

black shales are present in Bolivia, Chile, Paraguay, and Uruguay, Figure VII-1. These basins,
which were assessed in this chapter, are:
 Paraná Basin (Paraguay, Uruguay): The Paraná Basin contains black shale within the
Devonian Ponta Grossa Formation. The structural setting is simple but the basin is
partly obscured at surface by flood basalts, although this igneous cap is less prevalent
here than in the Brazil portion of the basin.
 Chaco Basin (Paraguay, Bolivia): Black shale in the Devonian Los Monos Formation is
present within a relatively simple structural setting in northwest Paraguay. The shale
becomes increasingly deep and thrust faulted in southeast Bolivia, where they source
that country’s prolific conventional reservoirs.
 Magallanes Basin (Chile): Known as the Austral Basin in Argentina, the Magallanes
Basin of southern Chile contains marine-deposited black shale in the Lower Cretaceous
Estratos con Favrella Formation, considered a major source rock in the basin.
1 PARANÁ BASIN (PARAGUAY, URUGUAY)
The Paraná Basin is a large depositional feature in south-central South America. Most
of the basin is located in southern Brazil, but there are significant extensions into Paraguay,
Uruguay, and northern Argentina, Figure VII-2. This section focuses on the Paraguay and
Uruguay portions of the basin. The Paraná Basin contains up to 5 km (locally 7 km) of
Paleozoic and Mesozoic sedimentary rocks that range from Late Ordovician to Cretaceous. Its
western border is defined by the Asuncion Arch, related to Andean thrusting, while the east is
truncated by the South Atlantic tectonic margin.2 Much of the Brazilian portion of the basin is
covered by flood basalts, partly obscuring the underlying geology from seismic and increasing
the cost of drilling, but the Paraguay portion is largely free of basalt.
The main petroleum source rock in the Paraná Basin is the Devonian (Emsian/Frasnian)
black shale of the Ponta Grossa Formation. The entire formation ranges up to 600 m thick in
the center of the basin, averaging about 300 m thick. TOC of the Ponta Grossa Fm reaches up
to 4.6% but more typically is 1.5% to 2.5%. The mostly Type II kerogen sourced natural gas
that migrated into conventional sandstone reservoirs.3
June, 2013 VII-5

Figure VII-2: Prospective Shale Gas and Shale Oil Areas in the Paraná Basin of Paraguay and Uruguay
Figure VII-3, a cross-section of the Paraná Basin, illustrates the thick and gently dipping
Devonian source rocks that pass through the oil window into the gas window.4 Figure VII-4, a
conventional well log in the Paraguay portion of the basin, shows Devonian source rocks and
interbedded sandstones with oil and gas shows.5 In outcrop, the Devonian Cordobes Formation
ranges up to 160 m thick, including up to 60 m of organic-rich shale. TOC ranges from 0.7 to
3.6%, consisting mainly of Type II marine kerogen. Based on the low thermal maturity at
outcrop (Ro 0.6%), ANCAP has estimated the boundary between dry and wet gas to occur at a
depth of about 3,200 m.6
June, 2013 VII-6

Figure VII-3: Cross-Section of the Paraná Basin of Paraguay, Showing Thick and Gently Dipping Devonian
Source Rocks Passing Through the Oil and Gas Windows.
Source: Chaco Resources PLC, 2004
Figure VII-4: Asuncion-1 Well Log from the Paraná Basin of Paraguay, Showing Devonian Source Rocks and
Interbedded Sandstones with Oil and Gas Shows.
Source: Guapex S.A., 2012
June, 2013 VII-7

The Paraná Basin has remained at moderate burial depth throughout its history.
Consequently, the bulk of thermal maturation took place during the late Jurassic to early
Cretaceous igneous episode. Most of the basin remains thermally immature (Ro <0.5%), but
there are sizeable concentric windows of oil-, wet-gas-, and dry-gas maturity in the deep central
portion of the basin.
Depth and thermal maturity of the Devonian Ponta Grossa Formation are relatively well
constrained in the Paraguay portion of the Paraná Basin. The prospective area in Paraguay is
estimated at 9,440 mi2, of which 3,830 mi2 is in the oil window; 3,260 mi2 is in the wet
gas/condensate thermal maturity window; and 2,350 mi2 is in the dry gas window.
However, Devonian depth and thermal maturity are much less certain in Uruguay.
Uruguay’s shale-prospective area is estimated at 3,920 mi2, of which 2,690 mi2 is in the oil
window and 1,230 mi2 is in the wet gas/condensate thermal maturity window (no evidence the
Devonian attains dry-gas thermal maturity in Uruguay). The Ponta Grossa shale averages
about 240 m thick (net), 10,500 to 12,500 ft deep in Paraguay but only 4,000 to 6,000 ft deep in
Uruguay, and averages 2.0% to 3.6% TOC.
Thermal maturity (Ro) ranges from 0.85% to 1.5% depending mainly on depth. For
example, Amerisur reported that the Devonian Lima Fm has good (2-3%) TOC and is oil-prone
(Ro 0.87%) at their conventional exploration block. Porosity is estimated at about 4% and the
pressure gradient is assumed to be hydrostatic.
Risked, technically recoverable shale gas and oil resources from the Devonian Ponta
Grossa Shale in the Paraguay portion of the Paraná Basin are estimated at 8 Tcf of shale gas
and 0.6 billion barrels of shale oil and condensate, Tables VII-1 and VII-2. Uruguay has further
estimated resources of 2 Tcf of shale gas and 0.6 billion barrels of shale oil and condensate in
this play. Risked shale gas and shale oil in-place in Paraguay and Uruguay are estimated at 60
Tcf and 28 billion barrels. The play has low-moderate net resource concentrations of 10 to 71
Bcf/mi2 for shale gas and 9 to 28 million bbl/mi2 for shale oil, depending on thermal maturity
window.
June, 2013 VII-8

The USGS recently estimated that Uruguay’s portion of the Paraná Basin (Norte Basin)
has 13.4 Tcf of shale gas and 0.5 billion barrels of shale oil resources in the Devonian Cordobes
Formation. They noted that the sub-basalt extent of inferred deep grabens for their study was
imaged by ANCAP using geophysical methods, with no well control.7 Petrel Energy recently
noted that new data indicates the Devonian is less thermally mature than mapped by the
USGS.8 The EIA/ARI thermal windows were adjusted accordingly.
1.4 Recent Activity
TOTAL, YPF, and small Australia-based Petrel Energy hold large exploration licenses
with Devonian shale potential in the Uruguay portion of the Paraná Basin (Norte Basin). No
shale-focused drilling has occurred in Uruguay, nor has shale leasing or drilling activity been
reported in the Paraguay portion of the Paraná Basin.
2 CHACO BASIN (BOLIVIA, PARAGUAY)
The large (157,000-mi2) Chaco Basin is an intra-cratonic foreland basin broadly similar in
origin to the Neuquen and other South American basins east of the Andes Mountains, Figure
VII-5. The Chaco Basin extends across southeast Bolivia and northwest Paraguay, as well as
southern Brazil and northern Argentina (please see separate chapters for these countries).
Structural highs (Ascuncion Arch) separate the Chaco Basin from the Parana Basin to the
southeast. Structure is relatively simple, with scattered mainly vertical normal faults and none of
the thrusting typical of Andean tectonics further to the west.
Sub-basins include the Pirity, Carandayty, and Curupayty troughs. Oil and gas
production occurs in Bolivia and Argentina but not in Paraguay, which has experienced much
less drilling. Fewer than 10 petroleum wells have been drilled in the Pirity Sub-basin of
Paraguay, all pre-1987, where no commercial production has occurred. However, the Argentina
portion of the Basin (Olmedo Sub-basin) has produced over 110 million bbls of oil from the
Upper Cretaceous Yacoraite and Palmer Largo formations and that basin continues to be
productive.9 Apart from the international border, no geologic discontinuity separates the two
sub-basins.
June, 2013 VII-9

Figure VII-5: Prospective Area of the Devonian Los Monos Formation, Chaco Basin, Paraguay and Bolivia
The main source rocks include the Silurian Kirusillas Formation and the Devonian Los
Monos and Icla formations.10 The Devonian, considered the main source rock for the world-
class conventional gas fields in the Tarija Basin foothills of southeast Bolivia, appears to have
shale gas potential in northwest Paraguay where structure is considerably simpler, Figure VII-6.
The gas window in this basin reportedly is at about 2 km depth.
Significant shale gas potential exists within the 8,000- to 12,000-foot thick Devonian Los
Monos Formation in the Carandaity and Curupaity sub-basins of Paraguay. The Devonian is
exceptionally thick in southern Bolivia but consists mainly of coarse-grained sandstones there.
The Devonian is also deeper and structurally more complex in much of Bolivia, Figure VII-7.
Within the Los Monos, the San Alfredo Shales appear to be most prospective, comprising a
lower sandy unit and an upper thick, monotonous black shale that formed under shallow marine
conditions.11 The thickest Devonian section (8,339 feet) penetrated in the Chaco Basin was in
the Pure Oil Co. Mendoza-1 well. The Los Monos marine shale accounted for about 8,200 feet
of this section.12
June, 2013 VII-10

Figure VII-6: Regional Seismic Time Section Across the Chaco Basin of Bolivia and Paraguay, Showing
Thick and Mostly Flat-Lying Silurian and Devonian Source Rocks.
Source: Wade, 2009
Figure VII-7: Regional Cross-Section Across the Chaco Basin of Bolivia and Paraguay, Showing Thick and
Mostly Flat-Lying Silurian and Devonian Source Rocks.
Source: CDS Oil and Gas Group, PLC, 2006
Scarce geochemical data suggest 2.5% overall average TOC for the entire Los Monos,
but richer zones are likely to be present within this thick and poorly documented unit. An
exploration well in the Curupaity sub-basin measured up to 2.1% TOC in the Los Monos.
Independent E&P Amerisur reports TOC of 1.44% to 1.86% in the Devonian Los Monos Fm in
the Curupaity sub-basin.13 Depth to the Los Monos Shale can exceed 10,000 feet (3,000 m) in
deep synclines such as the San Pedro Trough.14,15 Structural uplifts within the Chaco Basin
have high geothermal gradients and are gas-prone.
Another potential source rock is the Puesto Guardian Member in the lower portion of the
U. Cretaceous Yacoraite Formation. The Puesto Guardian reportedly contains about 78 m of
black shale within a 6,000-km2 area of the Pirity Sub-basin of the Cretaceous Basin.16 TOC is
up to 12%, consisting of Type II / III amorphous and algal kerogen that was deposited in
June, 2013 VII-11

lacustrine to restricted marine environments. Peak hydrocarbon maturation and charge is

estimated to have occurred 34-40 million years ago, with current maturity in the oil window.
However, the potential of the Cretaceous shale was not assessed due to insufficient geologic
control.
The Devonian Los Monos Formation is exceptionally thick (as much as 12,000 feet) in
the Chaco Basin, of which 2,000 feet (San Alfredo Shales) was conservatively assumed to be
organic-rich. Faulting is not extensive, thus relatively little area is sterilized due to structural
complexity.
The shale matrix reportedly consists primarily of brittle minerals such as calcite,
dolomite, albite feldspar, ankerite, quartz as well as significant rutile and pyrite. Some clay is
present -- mainly illite, kaolinite and chlorite – but is considered “less common.”17 Temperature
gradients range from elevated 1.9°F/100 feet on structural highs to 1.0°F/100 feet in the
Carandaity sub-basin.
Depth and thermal maturity of the Devonian Los Monos Formation are relatively well
constrained in the Paraguay portion of the Chaco Basin. The prospective area in Paraguay is
estimated at 22,210 mi2, of which 6,200 mi2 is in the oil window; 7,450 mi2 is in the wet
gas/condensate thermal maturity window; and 8,560 mi2 is in the dry gas window. An additional
8,760 mi2 is prospective in Bolivia, of which 670 mi2 is in the oil window; 2,440 mi2 is in the wet
gas/condensate thermal maturity window; and 5,650 mi2 is in the dry gas window.
Risked, technically recoverable shale gas and shale oil resources from the Devonian Los
Monos black shale in the Paraguay portion of the Chaco Basin are estimated at 67 Tcf of shale
gas and 3.2 billion barrels of shale oil and condensate, Tables VII-1 and VII-2. Bolivia has
further estimated resources of 37 Tcf of shale gas and 0.6 billion barrels of shale oil and
condensate. Risked shale gas and shale oil in-place are estimated at 457 Tcf of shale gas and
75 billion barrels of shale oil for the two countries. The play has moderate to high net resource
concentrations of 28 to 141 Bcf/mi2 for shale gas and 19 to 46 million bbl/mi2 for shale oil,
depending on thermal maturity window.
June, 2013 VII-12

2.4 Recent Activity
Initial shale evaluation is occurring on existing conventional petroleum exploration leases

in the Chaco Basin, but no shale-specific drilling or testing has occurred yet. President Energy
PLC (UK) holds eight conventional petroleum exploration licenses which it considers to have
shale gas/oil potential.
3 MAGALLANES BASIN (CHILE)
Located in southern Patagonia, the 65,000-mi2 Austral-Magallanes Basin has promising

but untested shale gas potential, Figure VII-8. While most of the basin is in Argentina, where it
is called the Austral Basin, a portion of the basin is located in Chile’s Tierra del Fuego region,
where it is referred to as the Magallanes Basin. The Chile portion of the basin, which started
producing conventional natural gas over 60 years ago, currently accounts for most of that
country’s oil and gas output, produced primarily from deltaic to fluvial sandstones in the Early
Cretaceous Springhill Formation at depths of about 6,000 feet.
The Magallanes Basin comprises two main structural regions: a normal faulted eastern
region and a thrust faulted western area. The basin contains a thick sequence of Upper
Cretaceous and Tertiary sedimentary and volcaniclastic rocks which unconformably overlie
deformed metamorphic basement of Paleozoic age. Total sediment thickness ranges from
3,000 to 6,000 feet along the eastern coast to a maximum 25,000 feet along the basin axis.
Jurassic and Lower Cretaceous petroleum source rocks are present at moderate depths of
6,000 to 10,000 feet across large areas.18 The overlying Cretaceous section comprises mainly
deepwater turbidite clastic deposits up to 4 km thick, which appear to lack shale gas and oil
potential.19
June, 2013 VII-13

Figure VII-8: Prospective Area of the L. Cretaceous Estratos con Favrella Formation, Magallanes Basin, Chile
June, 2013 VII-14

The organic-rich shales of Jurassic and Early Cretaceous age formed under anoxic
marine conditions within a Neocomian sag on the edge of the Andes margin, Figure VII-9. The
basal sequence consists of Jurassic source rocks that accumulated under restricted lacustrine
conditions within small half-grabens. Interbedded shale and sandstone of the Zapata and Punta
Barrosa formations were deposited in a shallow-water marine environment.20 The mid-lower
Jurassic Tobifera Formation contains 1% to 3% TOC (maximum 10% in coaly shales),
consisting of Types I to III kerogen. However, this unit is mainly coaly and probably
insufficiently brittle for shale exploration.
Figure VII-9: Stratigraphy of the Austral-Magallanes Basin, Argentina and Chile
MARGAS
VERDES FM
LOWER
INOCERAMUS
FM
Source: Rossello et al., 2008
June, 2013 VII-15

Overlying the Tobifera Fm are more prospective shales within the Early Cretaceous
Estratos con Favrella Formation (or Lower Inoceramus or Palermo Aike in Argentina), deposited
under shallow water marine conditions. The Lower Inoceramus Formation is 50 to 400 m thick.
In the Argentina portion of the basin, the total shale thickness (including the Magnas Verdes
Formation) ranges from 800 feet thick in the north to 4,000 feet thick in the south, representing
neritic facies deposited in a low-energy and anoxic environment.21 Total organic content of
these two main source rocks have been reported to range from 1.0% to 2.0%, with hydrogen
index of 150 to 550 mg/g.22 More recent analysis conducted by Chesapeake Energy of the
Lower Cretaceous Estratos con Favrella Formation in Chile indicates this unit contains marine-
deposited shale with consistently good to excellent (up to 6%) TOC, particularly near its base.23
Figure VII-10, a seismic time section across the basin, shows the 180-m thick Estratos
con Favrella Formation dipping gently west in a relatively simple structural setting. Net organic-
rich shale thickness was estimated by ENAP to be only 40 to 120 ft, although this appears
conservative and we assumed 280 net ft. ENAP also estimated porosity of 6% to 12%, but we
assumed a more conservative estimate of 6%. Thermal maturity increases gradually with depth
in a half-moon pattern, ranging from oil-prone (Ro 0.8%) to dry gas prone (Ro 2.0%). The
transition from wet to dry gas (Ro 1.3%) occurs at a depth of about 3,600 m in this basin.24
Chile’s portion of the Magallanes Basin has an estimated 5,000-mi2 prospective area
with organic-rich shale in the Estratos con Favrella and adjoining Lower Cretaceous formations.
Of this total prospective area, about 1,580 mi2 is in the oil window; 1,920 mi2 is in the wet
gas/condensate thermal maturity window; and 1,500 mi2 is in the dry gas window. The Estratos
con Favrella and adjoining shales average about 800 ft thick (organic-rich), 8,000 to 13,500 ft
deep, and have estimated 3.5% average TOC. Thermal maturity (Ro) ranges from 0.7% to 2.0%
depending mainly on depth. Porosity is estimated at about 5%. The Estancia Los Lagunas gas
condensate field in southeast Argentina measured a 0.46 psi/ft pressure gradient with elevated
temperature gradients in the Serie Tobifera Fm, immediately underlying the Lower Inoceramus
equivalent.25
June, 2013 VII-16

Figure VII- 10: Seismic Time Section Across the Magallanes Basin, Showing Marine Source Rock Shales in
the 180-m Thick L. Cretaceous Estratos con Favrella Formation within a Relatively Simple Structural Setting.
Source: Methanex, September 27, 2012
Risked, technically recoverable shale gas and oil resources from the Estratos con
Favrella and adjoining Lower Cretaceous formations in the Chile portion of the Magallanes
Basin are estimated at 48 Tcf of shale gas and 2.4 billion barrels of shale oil and condensate,
Tables VII-1 and VII-2. Risked shale gas and shale oil in-place are estimated at 228 Tcf and 47
billion barrels, respectively. The play has moderate to high net resource concentrations of 33 to
156 Bcf/mi2 for shale gas and 15 to 48 million bbl/mi2 for shale oil, depending on thermal
maturity window.
3.4 Recent Activity
No shale leasing or exploration activity has been reported in the Magallanes Basin.
Methanex operates a methanol manufacturing plant in the basin which is running at about 10%
of its 2 million t/year capacity due to local shortages of natural gas supply.26 During 2011-2,
Methanex had partnered with ENAP on conventional oil and gas exploration in the Magallanes
Basin and also had expressed interest in shale gas exploration. However, recently the
company decided to relocate about half of its methanol production capacity in Chile to
Louisiana, USA.27
June, 2013 VII-17

UK-based GeoPark holds conventional petroleum leases in the Magallanes Basin of

Chile, which the company notes contains shales in the Estratos con Favrella Formation which
previously have produced oil. In 2012 GeoPark conducted diagnostic fracture injection tests on
eight wells on the Fell Block to determine reservoir properties of the shale.28
REFERENCES
1
ENAP (Empresa Nacional del Petróleo), 4Q 2012 Results, April 2013, Santiago, Chile, 28 p.
2
Milani, E.J. and Zalán, P.V., 1999. “An Outline of the Geology and Petroleum Systems of the Paleozoic
Interior Basins of South America.” Episodes, vol. 22, p. 199-205.
3
Vesely, F.F., Rostirolla, S.P., Appi, C.J., Kraft, E.P., 2007. ”Late Paleozoic Glacially Related Sandstone
Reservoirs in the Parana Basin, Brazil. American Association of Petroleum Geologists, Bulletin, vol. 91,
p. 151-160.
4
Chaco Resources PLC, 2004. “Proposed Acquisition of Amerisur S.A. and Bohemia S.A., Notice of
Extraordinary General Meeting.” 83 p.
5
Guapex S.A., 2012. “Unconventional Gas in Paraguay.” 21 p.
6
US Geological Survey, 2011. “Assessment of Potential Shale Gas and Shale Oil Resources of the
Norte Basin, Uruguay, 2011.” 2 p.
7
US Geological Survey, 2011. “Assessment of Potential Shale Gas and Shale Oil Resources of the
Norte Basin, Uruguay, 2011.” 2 p.
8
Petrel Energy Limited, Investor Presentation, November 2012, 22 p.
9
President Energy PLC, Resource Evaluation prepared by DeGoyler and MacNaughton, December 15,
2012, 27 p.
10
Wade, J., 2009. “Nonproducing Paraguay’s Potential Conventional and Unconventional.” Oil and Gas
Journal, April 6, p. 39-42.
11
Petzet, A., 1997. “Nonproducing Paraguay to get Rare Wildcats.” Oil and Gas Journal, April 21.
12
Wiens, F., 1995. “Phanerozoic Tectonics and Sedimentation in the Chaco Basin of Paraguay, with
Comments on Hydrocarbon Potential.” ln A. J. Tankard, R. Suarez S., and H. J. Welsink, eds.,
Petroleum Basins of South America. American Association of Petroleum Geologists Memoir 62, p. 185-
205.
13
Amerisur Resources PLC, 2009. Interim Results Presentation, December, 36 p.
14
Kuhn, C.A.C., 1991. “The Geological Evolution of the Paraguayan Chaco.” Ph.D. dissertation, Texas
Tech.
15
Grupo Montecristo, 2012. “Unconventional Gas in Paraguay.” 21 p.
16
President Energy PLC, Investor Presentation, January 2013, 32 p.
17
Kern, M., Machado, G., Franco, N., Mexias, A., Vargas T., Costa, J., and Kalkreuth, W. 2004. “Source
Rock Characterization of Paraná Basin, Brazil: Sem and XRD Study of Irati and Ponta Grossa
Formations Samples.” 3° Congresso Brasileiro de P&D em Petróleo e Gás, 2 a 5 de outubro de 2005,
Salvador, Brasil.
18
Rodriquez, J. and Cagnolatti, M.J., 2008. “Source Rocks and Paleogeography, Austral Basin,
Argentina.” American Association of Petroleum Geologists, Search and Discovery Article #10173, 24 p.
June, 2013 VII-18

19
Romans, B.W., Fildani, A., Hubbard, S.M., Covault, J.A., Fosdick, J.C., and Graham, S.A., 2011.
“Evolution of Deep-water Stratigraphic Architecture, Magallanes Basin, Chile.” Marine and Petroleum
Geology, vol. 28, p. 612-628.
20
Fildani, A. and Hessler, A.M., 2005. “Stratigraphic Record Across a Retroarc Basin Inversion: Rocas
Verdes–Magallanes Basin, Patagonian Andes, Chile.” Geological Society of America, vol. 117, p.
1596-1614.
21
Ramos, V.A., 1989. “Andean Foothills Structures in Northern Magallanes Basin, Argentina.” American
Association of Petroleum Geologists, Bulletin, vol. 73, no. 7, p. 887-903.
22
Pittion, J.L. and Arbe, H.A., 1999. “Sistemes Petroleros de la Cuenca Austral.” IV Congreso
Exploracion y Desarrollo de Hidrocarburos, Mar del Plata, Argentina, Actas I, p. 239-262.
23
Methanex, Investor Presentation, September 27, 2012, 129 p.
24
Legarreta, L. and Villar, H.J., 2011. “Geological and Geochemical Keys of the Potential Shale
Resources, Argentina Basins.” American Association of Petroleum Geologists, Search and Discovery
Article, Adapted from AAPG Geoscience Technology Workshop, “Unconventional Resources: Basics,
Challenges, and Opportunities for New Frontier Plays,” Buenos Aires, Argentina, June 26-28, 2011.
25
Venara, L., Chambi, G.B., Cremonini, A., Limeres, M., and Dos Lagunas, E., 2009. “Producing Gas
And Condensate From a Volcanic Rock In The Argentinean Austral Basin.” 24th World Gas Congress,
5-9 October, Buenos Aires, Argentina.
26
Methanex, Investor Presentation, March 2013, 37 p.
27
Methanex, news release, April 2013.
28
GeoPark Holdings Limited, “Second Quarter 2012 Operations Update,” July 23, 2012, 6 p.
June, 2013 VII-19

VIII. Poland EIA/ARI W
VIII. POLAN
P D (INCLU
UDING LIT
THUANIA A
AND KAL
LININGRAD)
SUMMA
ARY
Poland
P has some
s of Euro
ope’s most favorable
f inffrastructure and public support for sshale
developm
ment. The Baltic
B Basin in northern Poland rem
mains the mo
ost prospecttive region w
with a
relatively
y simple stru
uctural settin
ng. The Pod
dlasie and L
Lublin basinss also have potential bu
ut are
structurally complex, with closely
y spaced fau
ults which m ay limit horizzontal shale drilling. A ffourth
area, the
e Fore-Sude
etic Monoclin
ne in southw
west Poland , is less reccognized butt has non-m
marine
coaly sha
ale potential similar to Australia’s
A Co
ooper Basin..
Figure VIII-1: Location of Assessed Sh ale Basins in Poland.
Sourcee: Modified from

m San Leon Enerrgy, 2012
June, 2013 VIII-1

Poland’s
P risk
ked, technica
ally recoverrable shale resources a
are estimate
ed at 146 T
Tcf of
shale gas and 1.8 billion
b s of shale oil in four asssessed basiins, Tables VIII-1 and V
barrels VIII-2.
a adds 0.4 Tcf
Lithuania T and 0.3 billion barre
els of risked
d, technicallyy recoverablle shale gass and
shale oil resources, Table VIII-3. Kalining
grad adds 2 .0 Tcf and 1.2 billion b
barrels of rissked,
ble shale ga
as and shale
e oil resourcces, Table V
VIII-3. Initia
al exploration
n has
confirmed the shale
e resource potential but
b suggestts that rese
ervoir cond
ditions are more
challengiing than orig
ginally anticipated by ind
dustry. New
w data colleccted since ou
ur 2011 reso
ource
assessm
ment resulted
d in a 20% reduction
r in EIA/ARI’s e
estimate of P
Poland’s sha
ale resource
es, on
an energ
gy-equivalent basis.
Table VIII-1: Shalee Gas Reservo

oir Properties and Resourcces of Poland.
Baaltic/Warsaw Trough Lublin Podlasie Fore Sudetic
S
Basic Data
2 2
(16,200 mi ) (4,980 mi ) (6,600 mi ) (19,7000 mi )
Shale Formationn Llandovery Llando
overy Llandovery Carbon
niferous
Geologic Age L. Sil - Ord. - U. Cambriann L.Sil-Ord-U.CCambrian L. Sil - Ord. - U. Cambriian Carbonniferous
D
nment Marine Marinne Marine Lacusstrine
2
Prosspective Area (mi ) 830 2,070 5
5,680 2,3990 1,000 1,100 860 9,0070
Physical Extent
Organicaally Rich 820 820 8

820 4155 540 540 540 3330
Thicckness (ft)
Net 451 451 4
451 2288 297 297 297 1882
Interval 6,500 - 9,8800 7 - 13,000 9 - 16,000 7,000 - 16,000
1 6 - 9,0000 6,500 - 11,500 10- 16,000 8 - 166,000
Deptth (ft)
Average 8,200 10,000 122,500 11,0000 7,500 9,500 12,500 12,0000
Mod. Mod. M
Mod. Slightly Slightly Slightly Slightly
Reseervoir Pressure Slightly Oveerpress.
Properties
Overpresss. Overpress Oveerpress. Overpress. Overpress. Overpress

O Overppress.
Reservoir
Averrage TOC (wt. %) 3.9% 3.9% 3

3.9% 3.0%
% 3.0% 3.0% 3.0% 3.00%
Therrmal Maturity (% Ro)) 0.85% 1.15% 1.80% 1.355% 0.85% 1.15% 1.80% 1.60%
Clayy Content Mediumm Medium Meedium Mediuum Medium m Medium Medium Meddium
Gas Phase Assoc. Gaas Wet Gas Drry Gas Dry Gas
G Assoc. Gaas Wet Gas Dry Gas Dry Gas
Resource
2
GIP Concentration (Bcf/m
mi ) 36.6 131.0 181.1 91.22 27.4 82.3 122.4 677.2
Riskked GIP (Tcf) 12.1 108.5 4411.5 45.88 6.6 21.7 25.3 1066.7
Riskked Recoverable (Tcff) 1.2 21.7 8
82.3 9.22 0.7 4.3 5.1 21.3
Source: ARI, 2013
2
June, 2013 VIII-2

Tab
ble VIII-2: Shalle Oil Reservo
oir Properties and Resourcees of Poland.
Baltic/Warsaw Trrough Podlasie
Basin/Grosss Area
Basic Data
2 2
(16,200 mi ) (6,600 mi )
Shale Formmation Llandoveryy Llandovery
Geologic Age
A L Sil - Ord. - U. Caambrian
L. L. Sil
S - Ord. - U. Cambbrian
Depositional Envvironment Marine Marine
2
mi ) 830 2,070 1,,000 1,1000
Physical Extent
Orgaanically Rich 820 820 5

540 5440
Th
hickness (ft)
Net 451 451 2
297 2997
Interval 6,5500 - 9,800 7,0000 - 13,000 6,0000 - 9,000 6,500 - 11,500
Deepth (ft)
Average 8,200 1
10,000 7,,500 9,5000
Mod. Mod. Slightly Slighhtly
Reeservoir Pressure
Properties
Reservoir
O
Overpress. Oveerpress. Overrpress. Overp ress.
% 3.9% 3.9% 3..0% 3.00%
Th
hermal Maturity (%% Ro) 0.85% 1
1.15% 0.885% 1.155%
Cllay Content Medium M
Medium Meedium Med ium
Oiil Phase Oil Conndensate O
Oil Condeensate
Resource
2
OIIP Concentration (MMbbl/mi ) 42.2 12.8 3
36.2 11..1
Riisked OIP (B bbl) 14.0 10.6 8
8.7 2.99
Riisked Recoverablee (B bbl) 0.70 0.53 0
0.43 0.115
Source: ARI, 2013.
2
Table VIII-3: Shalee Gas and Shaale Oil Reservo

oir Properties and Resourcces of Lithuania/Kaliningradd
Poland’s
P shale industry is still at an early explorratory, pre-ccommercial p
phase. Abo
out 30
vertical exploration
e wells
w and a half-dozen
h vertical
v on test wells have
and ttwo horizonttal productio
been drillled to date.. However, early resultts have not met industrry’s high inittial expectattions.
Last year, ExxonMobil abandoned the fault-prone Lubl in and Podlasie basins after drilling
g two
June, 2013 VIII-3

vertical test
t wells. ConocoPhillips and Ch
hevron are moving cau
utiously towa
ards drilling their
initial tes
st wells in the
t Baltic and Lublin basins,
b respe
ectively. A
And even in the geolog
gically
favorable
e Baltic Basin, Marathon
n and Talism
man recently exited after expressing “disappointm
ment”
with rese
ervoir qualitty and bein
ng “not partticularly entthused by rresults we'vve had to d
date.”
Meanwhile, the gove
ernment deb
bates rolling
g back some
e favorable shale invesstment term
ms, by
introducing higher taxes and mandating gove
ernment bacck-in rights.
Yet,
Y it is too soon
s to dism s extensive shale potential. Derisking shale pla
miss Poland’s ays in
North Am
merica typically requires
s drilling about 100 we lls, while acchieving eco
onomies of scale
requires many hundrreds more. E&P compa
anies continu
ue to explorre Poland’s sshale potenttial in
over 100
0 geologically
y diverse lic any PGNiG, which contrrols the country’s
censes. State oil compa
largest shale lease position,
p rep
ported test gas
g productio
on from its ffirst stimulatted vertical sshale
well and recently drillled a horizo
ontal offset well.
w Determ
mining best-p
practices op
perations rem
mains
a key challenge, including locatiing the bestt completion
n zones within the thick shale seque
ence,
g better exe
achieving ydraulic fracture stimula
ecution of hy ations, and rreducing the
e current sevveral-
fold highe
er well cost differential compared
c with North Am
merica.
INTROD
DUCTION
With
W an esta
ablished ons
shore conve
entional oil a
and gas pro
oduction ind
dustry as we
ell as
recent ex
xperience with coalbed methane ex
xploration, P oland offerss Europe’s b
best prospeccts for
developin
ng a viable shale gas/oil industry. Shale leasin
ng and deve
elopment in Poland beg
gan in
hen the Ministry of Env
2007 wh vironment im
mplemented highly favo
orable policie
es for shale
e gas
ment, including a simple tax and royalty fiscal syystem.
developm
The
T current investment te
erms for sha
ale gas deve 00-km2 maxiimum
elopment incclude a 1,20
block siz
ze, minimal signature fees
f of 50 Euros/block,
E , freedom ffrom manda
atory govern
nment
back-in rights,
r and reduced prod
duction roya
alties of $0.0
06/Mcf and $
$1.60/bbl. T
The typical sshale
contract comprises an
a initial 5-y
year explora
ation period,, which can be extende
ed, followed by a
30-year production
p period.
p Indus
stry’s respon
nse has bee
en strong: ovver 100 shale
e gas explorration
licenses have been awarded, covering
c ore than 35, 000 km2, no less than one-third o
mo of the
country’s
s area.
June, 2013 VIII-4

However,
H mo
ore recently the governm
ment is disccussing mod
difications to
o the shale fiscal
terms which may increase pro
ofit taxes on
o shale ga on to 40% or more, while
as productio
establish
hing a gove
ernment-owned entity to gain a minority e e in shale gas
equity stake
developm
ment projectts. These changes, iff implementted, could ssignificantly reduce ind
dustry
investme
ent in shale exploration
e at
a a time of disillusionme
d ent with earlyy well resultts.
The
T initial res
sults from so
ome 30 verttical and two
o horizontall shale wellss have been
n less
successfful than hope
ed. Producttion rates an
nd reservoir quality have
e been lowe
er than expe
ected,
with one
e operator te
esting ~4% porosity an
nd ~40% cla
ay content in several w
wells. Hydraulic
fracturing
g operations
s to stimulate
e production
n from the sh
hale also ha
ave been sub-par. How
wever,
as exploration contin
nues, opera uccessfully iidentify the geologic sw
ators may su weet spots, while
service companies
c are
a likely to
o improve th
heir impleme
entation of North Amerrican drilling
g and
stimulatio
on technolog
gy.
GEOLO
OGIC OVER
RVIEW
Poland
P has four
f main ba e Paleozoic shales are prospective
asins where e and explorration
activity is
s taking plac
ce, Figure VIII-1.
V ussed separrately in Secctions 1-4, tthese include the
Discu
Baltic Ba
asin and Wa
arsaw Troug
gh in northern Poland, tthe Podlasie
e Depressio
on and the L
Lublin
Basin in east Poland, and the Fore-Sudetic Monocline uthwest.1 A fifth region
e in the sou n, the
Carpathia
an Foreland
d belt of sou
utheastern Poland,
P cou ld be prosp
pective for o
oil-prone Jurrassic
shales, but
b this area is structurallly complex and hale leasing.
a has not yet been targeted for sh
The
T Paleozo
oic sedimentary sequen
nce in Pola
and contain
ns several m
marine-depo
osited
shale deposits which
h in places are
a thick, org
ganic-rich an
nd buried at prospective
e depths of 1
1,000
to 5,000 m. Most arreas are in the
t gas-pron
ne thermal m
maturity wind
dow, with sm
maller liquidss-rich
areas oc
ccurring in the
t north and east. Organic
O mattter generallly is domin
nated by Tyype II
kerogen. Abundant geologic datta exists on these Paleo
ozoic shaless. They have
e been subje
ected
sive study as
to extens a they are considered
c the
t main so
ource rocks ffor Poland’ss convention
nal oil
and gas fields. Basic
c shale exploration map
ps can be ac curately con
nstructed in m
most regionss.
However,
H th
he distribution of favo
orable shal e rock pro
operties -- particularlyy the
combinattion of high
h porosity and
a brittle mineralogy
m w
with low cla
ay content -- is still p
poorly
understo
ood. Severa
al of the ea
arly shale exploration
e wells have tested lower-than-expe
ected
porosity. And where
eas quartz content in se
elected areass can be favvorably high (40-80%), ssome
June, 2013 VIII-5

recent sh
hale drilling has tested high
h clay content (30-40
0%), which is less conducive to effe
ective
fracture stimulation.
s In addition,, the local sttructural geo
ology often iis poorly kno
own, in particular
the exten
nt and precis
se location of
o problema
atic faults wh
hich may interfere with sshale drilling
g and
completio
on. Conse onsiderable exploration drilling and seismic ssurveys are
equently, co e still
needed to
t define pottential sweett spots.
The
T main strratigraphic targets
t for shale
s gas/o
oil exploratio
on in Poland
d are the L
Lower
Silurian and Ordovician marine
e-deposited shales. T
The thinner but therma
ally more m
mature
Cambrian shale is emerging as a secondarry objective, while non-m
marine Carb
boniferous shales
e potential.
also have
 Lower
L Silurrian (Llandoovery-Wenlo ock) graptol itic black sshale is the e primary sshale
ex
xploration ta and. The Silurian sectio
arget in Pola on comprisess several hu undred to se
everal
th
housand me eters of shaale and silts
stone, with TOC generrally increassing towardss the
bottom of the e section. The
T most prospective p portion is ap pproximatelyy 500 m of high-
re
esistivity, hig
gh-TOC sec ction in the Llandovery,
L Wenlock an nd lowest Lu udlow, consisting
off dark gray to black, de ense siltston
nes and sha les. Natura al fractures aare common n and
usually filled with calcitte, although h the matrixx is non-ca alcareous. The Llando overy
generally ave erages 1.5% % to 2.5% TO OC but is riccher in the ccentral Balticc Basin, whille the
Podlasie
P Bassin averages s 6% TOC anda TOC ca an be high in n the northwwest Lublin B Basin
as well. The Wenlock is richest in the e eastern Ba altic and sou
utheastern L Lublin basinss.
 Ordovician.
O posited grap
Marine-dep ptolitic black shales in P
Poland are p
part of a reg
gional
deposit extending from Scandinav via to Russsia. 2 Thesee include EEarly Ordovvician
Dictyonema
D Shale, whic
ch comprise es fine-grained, non-m metamorphossed, organicc-rich
deposits.
 Cambrian.
C Although not evaluated in the prrevious 2011 EIA/ARI assessmentt, the
Cambrian
C also contains s organic-ricch shale th hat increasingly is being targeted d for
ex
xploration. PGNiG an nd Lane Energy have reported te est gas prod duction from
m the
Cambrian.
C Up
U to 700 m of Cambrian n section is present, mo
ostly tight sa
andstone butt with
th
hin shales near
n the top. Cambrian n units includ
de the Zarnnowiec and Upper Vend dians,
which
w repres
sent the trannsition from continental alluvial fan deposits too shallow mmarine
errigenous sedimentary environments.
te
The
T Lower Cambrian
C is dominated
d b quartz sa ndstones interbedded w
by with shales, while
th
he relativelyy thin Mid-C Cambrian Alum
A Shalee is a transsgressive, ssediment-sta
arved
se
equence containing high TOC. Th 3 he Upper C Cambrian to Tremadocia an shale, preesent
only in the noorthern part of the Baltic
c Basin, con
ntains high a
average TOCC of 3-12% b but is
quite thin (sev
veral to 50 m).
m
June, 2013 VIII-6

 Carboniferou
C us Coaly Shales.
S Non n-marine, la
acustrine-deposited carbbonaceous sshale
se
equences of o Carboniferous age are widely p present in P 4
Poland. Th hese organicc-rich
units, such as the Anthra acosia Shale es, are assoociated with economicallly importantt coal
deposits. Altthough cons sidered good source ro ocks for natu
ural gas, as well as coaalbed
methane
m exp
ploration targ
gets in theirr own right, these coal-shale packaages may not be
brittle enoughh for effectiv
ve shale deevelopment. However, comparable e deposits in the
Cooper
C Basin of Austraalia recently have produ uced shale gas. San Leon Enerrgy is
te
esting the Ca
arboniferous s shales in southwest Po oland’s Fore
e-Sudetic Moonocline.
In
n addition to
t these fou
ur main strratigraphic ttargets that were asse
essed, addittional
organic-rrich shale candidates
c exist
e in Poland but we
ere exclude
ed from thiss study. T
These
apparenttly less prosp
pective shales include:
 Upper
U Permmian Kupferrschiefer Shale. Strattigraphicallyy positioned between th he L.
Permian
P Rotliegendes tight sands stone and the U. Pe ermian Zechstein evap porite
se
equence, the Kupfershie efer Shale is
s present in
n the Fore-S Sudetic Mono ocline and L
Lublin
basins as we ell as in other areas of Poland. The Kupferschie efer is a blacck shale that was
deposited un nder anoxic c marine co onditions, tyypically conntaining 7% to 16% T TOC.5
However,
H the
e economica ally importannt metal sulffides (pyrite, spalerite, ggalena) thatt also
occur in high concentrations in this shale
s may in
nterfere with fracture stim mulation andd gas
production. None of the Poland d shale op perators ha ave reporte ed targetingg the
Kupferschiefe
K er.
 Mesozoic
M nd Tertiary Shales. Nu
an umerous you unger, organnically rich b
black shaless also
occur in the Carpathian Foredeep Basin B of sou
utheast Pola and, but theese generallyy are
non-marine anda mostly thermally immature.6 For examp ple, the Oliigocene to early
Miocene
M Mennilite black shale,
s with 4-8%
4 TOC (mmainly Type e II kerogen)), is considered a
high-quality source
s rock for
f conventio onal oil and gas fields in
n the Carpatthian fold be elt. In
addition, up to
t 200 m off organic-rich sandy mu udstone and d claystone w with average e 4%
TOC
T is prese
ent in the Jurrassic (Bathonian-Aalen nia) foreland platform. F Finally, the U
Upper
Ju
urassic orgaanic-rich Mik kulov marls, about 140 00-m thick w with 0.2% to o 10% TOC C, are
co
onsidered world-class
w source
s rocks
s in the nearrby Vienna B Basin.7 The e Mikulov ma ay be
present in the
e subthrust ofo the Polishh Carpathianns but appea ars too deep p and structurally
co
omplex to be e prospectivve for shale developmen
d nt.
June, 2013 VIII-7

PGI AND
D USGS ASSESSMENTS OF PO
OLAND SH
HALE GAS
S RESOURC
CES
In
n 2012 the Polish Geological Institute (PGI) a nd the U.S.. Geologicall Survey (US
SGS)
collabora
ated on a prreliminary sh
hale gas and
d shale oil a
assessmentt of Poland. PGI and U
USGS
released separate independent assessment
a s of the tech
hnically reco
overable sha
ale gas and sshale
oil resources within Lower
L Paleo
ozoic formattions in the B
Baltic, Podla ublin basins. The
asie, and Lu
PGI stud
dy drew heav
vily on earlie
er detailed shale
s mappiing and ana
alysis conduccted by Pop
prawa
eagues at PGI.8 Both th
and colle he PGI and USGS stud
dies were ba
ased on con
nventional oiil and
gas logs,, core, and seismic
s data
a collected during the 19
970-80’s. Ne
either study cited recentt data
measured from shale
e industry ex
xploration prrograms in P
Poland.
PGI
P estimate
ed technica able shale gas resourrces in the onshore B
ally recovera Baltic-
Podlasie-Lublin regio
on to be 230 4 billion m3 ((8 to 22 Tcf)), with an ad
0.5 to 619.4 dditional 1.5
569 to
1.956 billion barrels of oil (their “higher
“ prob e” estimate).9 The corre
bability range esponding U
USGS
estimate was about 1.345 Tcf and 0.168 billion barre
els (mean estimate), orr roughly 10
0% of
PGI’s esttimate.10
The
T PGI and esource estimates both are consid
d USGS re derably lesss than EIA/A
ARI’s
current estimate
e of 146 Tcf and
d 1.8 billion barrels for Paleozoic sshale gas and oil in Po
oland,
Tables VIII-1
V and VIII-2. Part of the difference arises b
because PG
GI excluded the Lublin B
Basin,
while PG S both excluded the Forre-Sudetic M
GI and USGS Monocline, tw
wo large regions where sshale
gas drilling and gas
s production are underw
way. But m
most of the difference iss because tthese
researchers followed a different methodo
ology and u
used differe
ent assumpttions. The
e key
he PGI, USG
differences among th GS, and EIA//ARI studiess are as follo
ows:
 Methodology
M y. PGI and d the USGS S followed thhe methodo ology used b by the USG GS for
assessing shhale gas and shale oil resources iin the Unite ed States, w wherein emp pirical
shale produc 11
ction data arre analyzed to estimate per-well reccoveries. In Poland’s case
th
here are no empirical sh hale productiion data. PG
GI considere ed but rejectted individua
al US
shale plays as
a analogs for f Poland, instead sele ecting for itss mean estiimate a range of
EURs
E “on the
e lower end d” of 26 sha
ale gas playys evaluated d by the USGS. The U USGS
methodology
m for its Polan
nd assessme ent has not b
been publish hed but appe ears similar..
EIA/ARI
E followed a different (volumeetric) approa
ach: calcula
ating the pro
ospective ga
as in-
place and thhen estimatin
ng likely rec
covery factoors based oon multiple analogous NNorth
American
A sha ale plays.
June, 2013 VIII-8

 Per-Well
P Reccovery. PG GI and USGS S estimated that per-well recoveriess in Poland w
would
be lower than those calculated by the USGS ffor many sh hale plays in the USA. For
Poland,
P the USGS
U estim
mated average shale ga as and oil E
EUR’s of 0.2 245 Bcf/well and
34,000 bbl/well on 160-a acre spacingg. PGI estimmated an avverage 0.4 B Bcf/well reco
overy
fo
or Poland on n implied 150
0-acre well spacing,
s with
h maximum of 1.0 Bcf/w well and miniimum
off 0.04 Bcf/well.
However,
H impproved technnology has significantly
s increased pper-well reco
overy in mosst US
shale plays in
n recent yea
ars. For exa ample, recent Marcelluss Shale wellls are perforrming
much
m better than
t the wells initially drrilled in this p
play during 2
2007-10. In addition, veertical
wells
w have noot been empployed for Marcellus
M devvelopment ssince about 22009, after w
which
new developm ment has beeen entirely based
b on hoorizontal wells.
Using
U producction data avvailable at the time, whicch included m
many early vvertical wellss, the
2011 USGS Marcellus sttudy estimatted a mean 1.15 Bcf ga as recovery per 149-acre e cell
within
w their main
m Interior Marcellus play.
p 12 This equates to approximattely 0.82 Bccf/well
re
ecovery on the
t tighter 107-acre well spacing (6 wells per m mi2) that is co
ommonly ussed in
th
he Marcelluss today.
However,
H Marcellus
M op
perators rec cently are reporting tthat improvved drilling and
coompletion te
echnology has steadily boosted the well recoveries to
eir average horizontal w
between 5 an well at present. Indeed, the average per-well re
nd 11 Bcf/w ecovery rep
ported
by 10 large Marcellus
M op perators, whhich accounnt for most o
of the gas pproduction in
n this
play, has rise 13
en to 7.1 Bcff/well, Table VIII-4. Ot her US shale plays have e seen incre
eases
in
n per-well re
ecovery in re
ecent years due
d to impro oved technoology, underrscoring the need
fo
or continuous appraisal ofo even prov ven shale pla
ays.
The
T EIA/ARI study does not explicitly estimate per-well reccovery for Po oland, but wwe do
estimate rec covery efficiiency. Ass suming 80--acre spacing and rellatively low w gas
re
ecoveries of 10% to 20% %, our equivaalent per-we
ell recoveriess in Poland rrange from 1 to 4
Bcf/well.
B Thiss has not ye
et been confiirmed by weell testing in P
Poland but tthe industry there
is
s still in the
e early explloration pha
ase. Our a assumption of higher p per-well recoovery
potential, bassed in part on more current US da ata, is a ma ajor reason w why the EIAA/ARI
shale resourc ce estimate is
i so much larger than thhe PGI and USGS estim mates.
 Basins
B Asse essed. The PGI assessment is limitted to the Ba altic and Pod dlasie basinss; the
Lublin Basin was exclude ed due to low TOC. Ho owever, PGN NiG, Chevro on, Marathon n and
other compan nies are con ntinuing to ex
xplore for sh
hale gas in tthe Lublin Basin. PKN O Orlen
re
ecently drille
ed the first horizontal
h weell there and
d is preparin
ng to fracture e stimulate. The
USGS
U Poland d map indica ates they as
ssessed the Baltic, Podla asie, and Lu ublin basins. The
cu
urrent EIA/A ARI assessm ment covers s the Baltic , Podlasie, and Lublin basins but also
in
ncludes the Fore-Sudetic
F c Monocline, where sha le gas leasin ng and drillin
ng are underrway.
June, 2013 VIII-9

Table
T VIII-4 : Comparison
C off Marcellus an
nd Poland Shaale Gas Per-W
Well Recovery Estimates
mated Ultimate
Mean Estim Current Net Proved Reservves
Source Recovery Bcff/107‐acre Well Production + Risked Resourrces Report Location
Bcf/well Source Million ft3/d Tcf Sourrce Date in play
Chesapeake 5.2 Chesapeake 800 39.0 Chesap peake 2/21/2013 PA & WV
Raange Resources 8.5 Range 600 30.0 Rangge 3/4/2013 NE PA
Shell ‐ ‐ 295 24.1 ARI est
e 5/28/2010 PA & WV
Statoil ‐ ‐ 451 18.9 Statoil 2/28/2013 PA & WV
ExxonMobil ‐ ‐ ‐ 17.6 ARI est
e 8/23/2012 PA & WV
EQT Corp. 7.3 EQT 800 15.0 EQT
QT 2/5/2013 PA & WV
Consol/Noble Energyy 5.9 Consol 280 14.8 Nob ble 2/7/2013 PA & WV
Chevvron Atlas Reliancce ‐ ‐ 158 13.0 Atlaas 5/6/2010 SW PA
Taalisman Energy 5.0 Talisman 450 8.0 Talismman 2/13/2013 NE PA
Ultra Petroleum 6.0 Ultra 194 7.4 Ultrra 3/4/2013 NE PA
A
Anadarko Corp. 8.0 Anadarko 330 6.0 Anadaarko 2/20/2013 NE PA
Cabot Oil & Gas 11.0 Cabot 930 5.3 ARI est
e 2/28/2013 NE PA
Chhevron Chief Oil ‐ ‐ 140 5.0 Chevrron 5/4/2011 SW PA
BG Exco JV ‐ ‐ ‐ 4.8 Excco 5/10/2010 Central PA
Soutthwestern Energyy 8.0 Southwestern 300 4.7 ARI est
e 3/1/2013 NE PA
Naational Fuel Gas 6.0 NFG 194 4.1 ARI est
e 2/7/2013 Central PA
Opeerator Marcellus
M
Mean or Total 7.1 Operators 5,922 218 PA & WV
USGS Interior Marcellus
Equivv 107‐Ac Mean EstE 0.82 USGS ‐ 81.4 11/23/2011 PA & WV
PG
GI Poland Mean
Shalle Gas 150‐Ac Estt 0.40 PGI 0 8 to 22 3/1/2012 Baltic‐Podlasie
USGGS Poland Mean
Shalle Gas 160‐Ac Estt 0.25 USGS 0 1.3 7/1/2012 Baltic‐Podlasie
 TOC.
T PGI screened
s ou n Basin beccause their log analysiss did not ide
ut the Lublin entify
significant shale layers th
hicker than 15
1 m with TO OC above 2%. Howeve er, they note
ed the
evaluation process was “not
“ easy annd straightfo
orward” due to the poor quality of the 40-
to
o 50-year-oldd core and lo
og data. EIAA/ARI, relyin
ng on more rrecent shalee explorationn data
and publishe ed source ro ock studies, developed a more op ptimistic view
w that shallower
portions of the deep Lublin Basin stilll may have pprospective shale targetts.
In
n summary, the EIA/ARII shale gas/o
oil resource estimate fo
or Poland is larger becau
use it
includes two addition
nal shale pla
ays (Podlas
sie and Fore
e-Sudetic Mo ncorporates more
onocline), in
hale industry
recent sh y data, and assumes higher recove
ery factors m
more consisttent with (bu
ut still
considera an) actual Marcellus Sha
ably less tha ale well perfo
ormance.
June, 2013 VIII-10

1. BALTIC
B BA
ASIN
1.1 In
ntroduction
The mi2 Baltic Ba

T 16,200-m asin in northern Poland, Lithuania a
and Kalining
grad is a rare
e (for
Europe), relatively tectonically quiescent area that contains a sequence of Paleozo
oic to
c deposits, including Low
Mesozoic wer Paleozo
oic organic-rrich shales that are prosspective for sshale
gas and oil development.14 The
ese mostly marine-depo
osited shale
es are separrated by reg
gional
unconforrmities relate
ed to Caledonian, Varis
scan, and A
Alpine tecton
nics. A sma
all portion o
of the
basin exttends into Lithuania and
d the Kalining
grad Oblast..
Figure VIII-2 illustrates the

t depth to
o the Lowerr Silurian Llandovery S
Shale, one o
of the
principal targets for exploration
e in
i the Baltic Basin, high
hlighting the 1 to 5 km p
prospective d
depth
window. The basin’s structure is much sim
mpler than m
most other a
areas in Pola
and and Europe.
Faulting does occur but it is more widely sp
paced and le
ess severe. In addition, the shale sstrata
dip gently in this bas
sin, Figure VIII-3.
V Detaile
ed seismic ssections iden
ntify fairly brroad areas w
which
o be intact and
appear to a free of faulting in places,
p Figurre VIII-4. F
Faulting in th
he Baltic Bassin is
most like
ely related to
o uplift durin
ng the Devo
onian (Caled
donian Orog
geny), couple
ed with rela
atively
rapid dep
position during the late Paleozoic
P an
nd Mesozoicc.
The
T Baltic Basin
B forme
ed as a res
sult of late Precambria ollowed by early
an rifting fo
Paleozoic post-rift downwarpin
d g of the East
E Europe
ean Platform
m. The ba
asin’s south
hwest
boundary
y is defined by the north
hwest-southe
east trendin g Trans-Eurropean Sutu
ure Zone (TE
ESZ),
a deform
med fault zon
ne, while the Mazury-Belarus High d
defines the e
eastern boun
ndary. The basin
t the north into the Balttic Sea.
extends to
June, 2013 VIII-11

Figure VIII-2: Baltic Basin Map Showing Depth To LLower Siluriann Llandovery Shale.
Source: Modified
M from Poolish Geological Institute, 2012
Figure VIII-3: Structurall Cross-Sectio

on in North Po
oland Baltic Baasin Showingg Relatively Sim
mple Structurre and
Widelyy Spaced Faultts.
Source: Moodified from San Leon Energy, 2012
June, 2013 VIII-12

gure VIII-4: Deetailed Seismic Section in N

Fig North Poland B
Baltic Basin
Sho owing Simple Structure andd Few Faults.
Source: LNG
G Energy Ltd.
Organic-rich
O shales of Pa
aleozoic age
e within the Baltic Basin
n are relative
ely flat lying,, high
in TOC, thermally
t ma
ature in the gas to oil windows,
w and
d among the
e most prosp
pective in Eu
urope
for shale development. Figure VIII-5
V exhibits
s organic-ricch shales tha
at are typica
ally present w
within
the Lowe
er Silurian, Ordovician,
O and Cambrrian strata. TOC distrib e Zarnowiec IG-1
bution in the
conventio
onal well, northern Balttic Basin, sh
hows severa
al high TOC aling about 75 m
C zones tota
thick, witth good corrrelation of ga
amma ray lo
og and core data. Thesse Lower Pa
aleozoic dep
posits
form a package
p of quite thick, laterally extensive, darrk grey to b
black organiic-rich rockss that
contain marine
m (type II/III) keroge
en. The main shale targ
gets in the B
Baltic Basin include:
 Cambrian.
C Up to 700 m of Cambrrian sandsto one and sha ale is prese ent, including
g the
Zarnowiec
Z an
nd other Uppper Vendian units. Thesse representt a transition
n from contin
nental
alluvial fan de
eposits to sh
hallow marine terrigenou
us sedimentaary environm ments.
 Ordovician.
O Deposited under deep water mari ne condition ns, the Ordo ovician is thiinner,
ra
anging from 80 to 200 m.
m The Lowe er Ordovicia
an Arenig annd Lower Ca aradoc forma ations
are predominnately marlyy limestone
e interbeddeed with clayystone and siltstone. The
overlying Upp
per and Midd
dle Caradocc Formation cconsists of g
graptolite-ricch black shalle.
 Silurian.
S Th
he overlying
g Silurian sequence is extremely thick at up to 3 km in n the
so
outhwest ne Z, but more typically 1 km thick in the shale e
ear the TESZ exploration a
areas.
June, 2013 VIII-13

The
T Silurian shale is locally interbe
edded with dolomitic limmestone. T The thick m middle
Silurian
S Wen nlock and thhin Lower Silurian Lland mations conttain dark grey to
dovery form
black organic c shale that commonly
c ex
xhibits stron
ng gas showws in explorattion wells.
The n by more than 200 m of anhydrite

T Ordovician and Silurian shales are overlain e and
halite (sa
alt) of the Permian
P Zec
chstein Form
mation, a we
eak zone th
hat frequently decouples the
younger overlying section
s from
m the Paleoz
zoic strata. Finally a 1,200-m th
hick sequencce of
overlying
g Mesozoic sandstones
s and claysto
one is cappe
ed by a thin veneer of T
Tertiary sand
d and
gravel. Additional
A potential
p sou
urce rock sh
hales are prresent in the
e Upper Jurrassic and L
Lower
Cretaceo
ous in the Baltic
B Basin but were not
n assesse
ed due to lo
ow thermal maturity. T
These
Mesozoic
c shales locally have TO
OC >1.5% but are therm
mally immatu
ure (Ro 0.5%
% to 0.7%) at well
k 15
depths of 1.5 to 3.2 km.
Figure VIII-5:
V TOC Distribution in L.
L Paleozoic, Zarnowiec
Z IG- 1 Conventional Well, Northern Baltic Bassin,
Shows Seeveral High TOOC Zones Tottaling About 75
7 m Thick. Noote Good Corrrelation of Gaamma Ray Logg and
Core
C Data.
Source: Pooprawy, 2010
June, 2013 VIII-14

1.2 Reservoir
R Properties
The
T combine
ed Lower Silurian, Ordo
ovician, and
d Cambrian section in the Baltic B
Basin
totals fro
om 1,000 to 3,500 feet thick. The organic-rich
o sshale interva
al for the Lo
ower Paleozoic is
estimated
d to averag
ge 820 ft thick, of whic
ch approxima
ately 55% iis considere
ed net thickness.
erages about 3.9%. Silica content from
TOC ave f two old
der western Baltic Basin
n wells meassured
y high (40-80%), Figure
relatively e VIII-6, indiicating brittl e rock cond
ditions. How
wever, high
h clay
content (33-44%)
( has been repo
orted from tw
wo of BNK’s recent shale
e exploration
n wells.
Thermal
T maturity ranges
s from oil- to
o gas-prone
e, Figure VIII-7, increassing steadilyy with
depth in the basin as
a illustrated
d in the Gdansk IG-1 w
well, Figure VIII-8. The
e average d
depth
ranges frrom 8,200 ftt in the oil window,
w to 10,000 ft in t he wet gas window are
ea, to 12,500
0 ft in
the oil window. Poro
osity is estim
mated at 4% oration results. The basin is
% based on recent explo
slightly over-pressure
o ed with an estimated
e 0.5
50 psi/ft grad uch as CO2 or N2
dient. Gas impurities su
appear lo
ow in most of
o the basin.
Figure VIII-6: Silica Conten

nt in the Lower Paleozoic Frrom Two Wesstern Baltic Baasin Wells
H (40-80%)), Indicating B rittle Rock Coonditions.
is Relatively High
Sourrce: Krzemiñskiego & Poprawy,, 2006 in Popraw

wy, 2010
June, 2013 VIII-15

Figure VIII-7: Baltic Basin Map Show

wing Thermal Maturity
M Winddows and Prosspective Area for Lower Silurian
Llandoveery Shale, Polland
Sourrce: Contours modified

m from Saan Leon Energy, 2012 and Polishh Geological Insstitute, 2012
Figure VIII-8: Thermal Maaturity Increasses Steadily w

with Depth in tthe Gdansk IG
G-1 Well
Central Baaltic Basin, Reeaching Oil- and
a Then Gas--Prone Maturitty in the Paleoozoic.
Source: Popraawa, 2010
June, 2013 VIII-16

1.3 Resource
R Assessmen
A nt
Total
T risked, technically recoverable shale resou
urces in the
e Poland porrtion of the B
Baltic
Basin an
nd Warsaw Trough
T are estimated
e at 105 Tcf of sshale gas an
nd 1.2 billion
n barrels of sshale
oil and co
ondensate.
Dry ndow. The mapped prrospective a

D Gas Win area for Pola as window in the
and’s dry ga
Baltic Ba
asin is estim 680 mi2.
mated at 5,6 Lower
L Paleo
ozoic shale (comprising
g the L. Silu
urian,
Ordovicia
an, and Ca
ambrian) ha
as a favorable resourcce concentra
ation of ap
pproximatelyy 181
Bcf/mi2. Risked, tec
chnically recoverable shale gas reso
ources are e
estimated att 82 Tcf, outt of a
risked sh place of 412 Tcf.
hale gas in-p
W Gas Wiindow. The

Wet e wet gas prospective
p area coverss about 2,070 mi2. Rissked,
ble resource
es are estima
ated at 22 T
Tcf of shale gas and 0.5
5 billion barre
els of
shale condensate fro
om 109 Tcf and 14 billio
on barrels off risked, in-p
place shale g
gas and sha
ale oil
resource
es.
O Window. The much smaller oil window with

Oil hin the north
hern Baltic B
Basin prospe
ective
30 mi2. Risk
area covers about 83 ked technica
ally recovera
able resource
es are estim
mated to be a
about
0.7 billion barrels off shale oil and
a condens
sate and 1.2
2 Tcf of asssociated sha
ale gas, outt of a
risked in--place shale
e oil and condensate resource of 14 billion barre
els.
1.4 Exploration
E n Activity
Poland,
P and in particularr the Baltic Basin,
B has a large existing data sett of well logss and
seismic to
t guide shale explorattion. Over 200 petrole
eum exploration wells h
have been d
drilled
targeting conventional oil and ga
as plays in Poland, pen
netrating sha
ale formations and provviding
general information on thicknes
ss, depth, TOC
T and the
ermal maturrity. Seismically, the L
Lower
an be difficult to image due to acou
Paleozoic shales ca ustic interference cause
ed by the 2
200-m
erlying Zechstein salt. Regional modern 2D a nd localized
thick ove d 3D seismic data are b
being
perators over their licens
acquired by shale op ses to aid in siting well lo
ocations, particularly to a
avoid
problema
atic faults.
Since
S he smaller independentt E&P comp anies have pioneering sshale explorration
2010 th
in the Ba
altic Basin, in
ncluding Lan
ne Energy, BNK
B Petroleu
um, San Leo
on Energy, a
and others. More
recently large oil companies (C
ConocoPhillip
ps, Marathon
n, Talisman
n) have farm
med into som
me of
these positions or ac
cquired their own blocks. PGNiG is active but h
has focused mainly outsiide of
June, 2013 VIII-17

the Baltic Basin. Thus

T far the
e Poland sh
hale test pro
ograms havve had limitted successs with
modest gas
g flow rattes. Key ch
hallenges se
eem to be locating the
e best stratig
graphic zones in
which to
o position the
t lateral, as well as
s successfu
ully impleme
enting hydrraulic stimulation
programs
s.
A brief summ
mary of opera
ator activities
s in the Balttic Basin is p
provided below, includin
ng the
limited pu
ublic geologic and reserrvoir results released to d
date:
 PGNiG,
P the national oil and gas co ompany of P Poland, hold ds 15 shalee gas explorration
lic
censes. La ast year thee company reported pla ans to inve est $0.5 billiion in shale
e gas
development with severa al Polish state-owned pa artners. PG GNiG has drrilled at least four
shale gas ex xploration we ells to date in the Balt ic Basin, prroducing sha ale gas from
m the
Cambrian
C in two
t vertical wells from depths
d of ab
bout 3,000 mm, while logg
ging gas sho ows in
th
he Ordoviciaan and L. Silurian.
S Th
he companyy recently drilled its firsst horizontall well
nearby (Lubo ocino-2H) and targets commercial
c production in the Balttic Basin sta arting
2016.16
 ConocoPhill
C ips has fa armed into three of Lane Enerrgy’s (subssidiary of 3 3Legs
Resources
R PLC) shale blocks
b in the western Ba altic Basin. Lane Energ gy has testedd low
gas rates (90
0 and 500 Mcfd) from tw wo stimulated d horizontal shale wells. ConocoPh hillips
ecently beca
re ame the ope erator of thes
se blocks, sh hifting focuss to the liquid
ds-rich window in
th
he north. Thhe company recently spu oland shale well, the vertical Strzeszewo
ud its first Po
LE-1, in an arrea with 3D seismic coverage.17
Lane’s Lebie en LE-2H well,

w a verttical well sstimulated wwith a singlle-stage fra acture
trreatment, pro oduced an average
a 27 Mcf from th e Upper Ord dovician durring a 5-dayy test.
The
T well was s re-entered in 2011 and d a 1-km latteral was drrilled into the
e Ordovician
n and
sttimulated with a large 13-stage fra ac treatmen t. This horrizontal well produced a at an
in
nitial 2.2 MM Mcfd, stabiliz
zing at aboout 500 Mcfd d on nitrogeen lift during a 17-day test,
making
m it the highest prodduction for a shale well in Poland to
o date.
Lane’s Warb blino LE-1H well encountered ho le instabilityy while drilling into th he U.
Cambrian
C shale. The well was re-d drilled with a 500-m late
eral and stim
mulated with
h a 7-
sttage gel frac
c, testing 18 to 90 Mcfd on
o lift assist .
 Marathon
M an
nd partner Nexen
N have acquired neew seismic aand drilled a
at least one sshale
well
w in the Ba 18
8
altic Basin. Marathon’s s most rece
ent remarks ((May 2012) on Poland n noted
“d
disappointme ent” with the
e reservoir quality.
q Currrently, Marathon is condducting injecctivity
te
ests to deterrmine whethe er to procee
ed with hydra
aulic stimulation.
June, 2013 VIII-18

 Talisman
T an
nd San Leo on Energy haveh drilled three verticcal shale wwells in the B Baltic
Basin,
B logging gas and some
s liquids
s shows thro roughout thee Cambrian, Ordovician, and
Silurian
S section. San Leeon reported d that it mayy drill its firstt horizontal sshale well d
during
2Q-2013, with a planned d 1,000+ m lateral
l comp pleted with a multi-stage e frac. How wever,
Talisman’s
T most
m recent remarks
r (Occtober 2012 2) noted “we e're not partiicularly enth
hused
by results wee've had to date. It's a diifficult thing. ” 19
 BNK
B eum has drilled five vertiical shale we
Petrole ells in the B
Baltic Basin (($12 million//well).
Porosity
P (3-4
4%) was low wer than ex xpected in o over-pressurred L. Paleo ozoic shale;; clay
co ontent was fairly
f high (3
30-40%). Th he companyy estimated ttotal GIP concentration of up
o 135 Bcf/mi2, including 86 Bcf/mi2 in the targett Ordovician
to n and L. Silu
urian shale zzones
(ttotal 110 m thick).
t The Lebork S-1 well flared g gas from sevveral interva als, but a fra
acture
sttimulation was unsucces ssful due to high stress aand inadequ uate pump ccapacity.
1.5 Lithuania
L
For the northeastern exte

ension of the
e Baltic Bassin into Lithu
uania, we esstimate a riskked 6
billion ba
arrels of sha
ale oil and 4 Tcf of ass ale gas in-pllace in the prospective area
sociated sha
(Figure VIII-9),
V with 0.3 billion barrels
b of sh
hale oil and 0.4 Tcf of a
associated sshale gas a
as the
risked, te
hale resourc
ces.
1.6 Russia
R (Kalliningrad Oblast)
O
For the north

heastern extension of th
he Baltic Bassin into Russsia’s Kalinin
ngrad Oblasst, we
estimate a risked 23 billion barre
els of shale oil
o and 20 Tccf of associa
ated shale ga
as in-place iin the
prospective area (Fig
gure VIII-9), with 1.2 billion barrels o
of shale oil a
and 2 Tcf of associated sshale
gas as th
he risked, tec
chnically rec
coverable sh
hale resource
es.
June, 2013 VIII-19

Figure VIII-9.
V Baltic Basin Map Sho
owing Thermaal Maturity Winndows and Prrospective Areea for Llandovvery
Shale, Lithu
uania and Kali ningrad
June, 2013 VIII-20

2. LUBLIN
L BA
ASIN
2.1 In
ntroduction
T 5,000-mi2 Lublin Bas

The sin may be considered the southea
astern extension of the B
Baltic
Basin, with
w which it shares gen
nerally similar shale strratigraphy a
and lithologyy, Figure VIII-10.
Howeverr, the Lublin
n Basin’s structural ge
eology is sig
gnificantly m
more complex, with se
eismic
sections showing nu
umerous clo
osely spaced he basin is mostly too deep
d faults. In addition, th
while sha
ale TOC app
pears to be relatively
r low
w.
Although
A the Lublin Basiin is experie
encing early--stage shale
e gas explorration, it app
pears
somewha
at less prosp
pective and was
w assesse
ed separate
ely from the B
Baltic Basin.. Several ve
ertical
shale we
ells have be
een drilled, while the first horizonttal well wass drilled in late 2012 and is
planned to be stimula
ated soon. PGNiG,
P evron, Maratthon, and other companies are activve.
Che
Figure VIII-11 illustrates the extent of faulting a

and sub-sallt tectonic d
decoupling o
of the
Lower Paleozoic
P in the Lublin Basin.20 Figure VIII- 12 shows h
hydrologicall flow within
n the
Devonian
n strata, inc
cluding close
ely spaced faults
f and ssteep dips.21 Major fault systems in the
basin inc
clude the no
orthwest-southeast trend
ding Kock, Izzbeca-Zamo
osc, Ursynow
w-Kazimierzz, and
Holy Cross faults. Clearly,
C the Lublin Basin is structurallly more com
mplex than th
he Baltic Bassin.
Several
S small convention
nal natural gas
g fields ha
ave been disscovered in the Lublin B
Basin,
such as the Ciecierrzyn-Mełgiew
w Field which produce s from Devvonian carbo
onate reservvoirs.
Source rocks
r include
e Silurian an
nd Ordovicia
an shales, b
but marine liimestones a
and clayston
nes of
the Devo
onian Bycha
awa Formation are con
nsidered mo nt.22 The L
ore significan Lublin Basin also
contains significant coal
c and coa
albed metha
ane depositss in Carbonifferous strata
a, which con
ntinue
to the southeast into the Lvov-Vo e.23
olhynia Basin of Ukraine
2.2 Reservoir
R Properties
The
T combine
ed Lower Siilurian, Ordo
ovician, and
d Cambrian section in the Lublin B
Basin
totals fro
om 330 to 1,100 feet thick. The orrganic-rich sshale interva
al for the Lo
ower Paleozoic is
estimated
d to average
e 415 ft thick
k, of which about
a d net pay. A good example is
55% iss considered
the Lopie
ennik IG-1 well,
w Figure VIII-13, sho gas-bearing Paleozoic sshale
owing aboutt 150 m of g
C of 0.2% to 1.4%.24
with TOC
June, 2013 VIII-21

Figu
ure VIII-10: Lub
blin and Podlaasie Basin Map Showing Deepth to Lowerr Silurian Llanddovery Shale..
Source: Moodified from Polissh Geological Institute, 2012
Figure VIII-11: Seismic Section in Lublin Basin Sho

owing Relativvely Complex Structure andd Numerous FFaults,
as Well ass Poor Image Quality
Q in Deeep Lower Paleozoic.
Source: Zyw
wiecki and Lewis, 2011
June, 2013 VIII-22

Figu
ure VIII-12: Hydrological Cro
oss-Section inn the Lublin B
Basin, Poland.
Source: Zawisza, 2006
Figure VIII-13: Well Log

L Showing Approximately
A y 150 m of Gaas-Bearing Shale
with
w TOC of 0.2 to 1.4% in the Lopiennik IG-1 Well, Lubblin Basin
Sourcee: Zywiecki and Lewis, 2011
June, 2013 VIII-23

However,
H TO
OC often is
s higher in core analyyses than ccalculated ffrom older logs,
averaging about 3% in the Lublin
n Basin. Th
he thermal m
maturity of th
he Paleozoicc is in the dryy gas
window to
t overmaturre, increasin
ng steadily with
w depth ass illustrated in the Polik IG-1 well, F
Figure
VIII-14. Depth to the shale ave
erages appro
oximately 11
1,000 ft. Po
orosity is esstimated at a
about
e pressure gradient in the Devonia
5%. The an section iis slightly ovver-pressure
ed, about 2-10%
c gradient.255 Gas impurrities such ass CO2 or N2 appear to be negligible..
above the hydrostatic
2.3 Resource
R Assessmen
A nt
T 2,390-mii2 prospectiv
The ve area map
pped in the L
Lublin Basin is entirely w
within the dryy gas
thermal maturity
m win ozoic shale (L. Silurian,, Ordovician
ndow. The Lower Paleo n, and Camb
brian)
has a moderate
m re
esource concentration of
o approxim Bcf/mi2.
mately 91 B Rissked, techn
nically
as is estimatted at 9 Tcf, out of risked
d, shale gass in-place of 46 Tcf.
Fiigure VIII-14: Thermal

T Maturrity In The Palleozoic Increaases Abruptly Below the Unnconformity
in the Pollik IG-1 Well, Lublin
L Basin, Reaching
R Gass-Prone and TThen Over-Matturity.
Source: Pooprawy, 2010
June, 2013 VIII-24

2.4 Exploration
E n Activity
PGNiG,
P Exxo
onMobil, Ch
hevron, Marrathon and other comp
panies have
e been purssuing
shale ga
as exploratio blin basin. In March 20
on in the Lub 012 PGNiG
G began drilling the Lub
bycza
Królewska well in th
he Tomaszów
w Lubelski license. The
e vertical we
ell is planned
d for 4,300-m
m TD
using a 2000-HP
2 Driillmec 2000 Walking Rig
g, currently P
Poland’s mo
ost advanced drilling rig, and
targets Lower
L Paleoz
zoic shales at 300 m.26
a depths of 2,300 to 4,3
In
n 2009 Exxo
onMobil lea
ased six lice
enses in the
e Lublin and
d Podlasie b
basins of ea
astern
Poland. The compan
ny drilled two vertical sh
hale gas testt wells (Krup
pe 1 and Siennica 1), loccating
one well in each ba
asin. Howe
ever, ExxonMobil termin
nated its Po
oland shale
e gas explorration
efforts in mid-2012 after
a failing to
o demonstra
ate “sustaine
ed commerciial hydrocarb es.”27
bon flow rate
In
n late 2012 ExxonMobil sold two off the license
es (Wodynie d Wolomin in the
e-Lukow and
Podlasie Basin) to PKN
P n holds 10 sshale gas liccenses totaling nearly 9
Orlen. PKN Orlen 9,000
km2 (including the tw
wo former Ex
xxonMobil blocks).
b In l ate Octoberr 2012, PKN
N reported drilling
the first horizontal
h we
ell in the Lub
blin Basin, which
w it planss to hydraulically stimula
ate.
In
n 2009 Che
evron acquired and currently operrates four shale gas exxploration b
blocks
totaling 4,433
4 km2 in the Lublin Basin
B of southeast Polan
nd. In Octob
ber 2011 Ch
hevron comp
pleted
a 12-mon
nth 2-D seis
smic acquisiition program
m across th e four licensses to help plan a multti-well
exploratio
on drilling campaign.
c The compa
any complete
ed its first w
wells in the
e Grabowiecc and
Frampol licenses durring Q1 2012
2; results ha
ave not been
n disclosed.
Marathon
M Oil also holds shale
s explorration blockss in the Lublin Basin. T
The companyy has
acquired seismic data but has not
n reported
d testing ressults. PGNiG
G also holds licenses in the
Lublin Basin and drrilled the ve
ertical Marko
owola-1 sh ale well in the in the Pionki-Kazim
mierz
license during
d 2010.. The well was
w fracture
e stimulated by Halliburrton and rep
portedly achieved
“mixed” results.
r
June, 2013 VIII-25

3. PODLASIE
P BASIN
3.1 In
ntroduction
Like the Lublin Basin, the 6,600-mi2 Podlasie D

Depression (Basin) may be considered a
stern extens
southeas sion of the Baltic Bas
sin, with wh ares generally similar sshale
hich it sha
stratigrap
phy and litho
ology. How
wever, where
eas the Pod
dlasie is stru
ucturally mo
ore complex than
the Baltic
c Basin, it is less comple
ex than the Lublin
L n and thus iss separately assessed. Eight
Basin
key older convention
nal exploration wells hav
ve been drillled in the basin, includiing the Wysszków
IG 1 borrehole (TD 2388
2 m) which penetratted organic--rich Silurian
n, Ordovician
n, and Cam
mbrian
eposits.28 Organic
shale de O matter measurements in old
der core we
ere low, butt some operrators
have noted that fresh
h shale core samples yie
eld higher va
alues.
3.2 Reservoir
R Properties
The
T combine
ed organic-rrich shale in
nterval withi n the Lowe
er Paleozoicc is estimate
ed to
average 540 ft thick
k, of which about
a 55% is
i considere C averages about 3%. The
ed net. TOC
thermal maturity
m of the Lower Pa
aleozoic sha
ale ranges frrom dry gass in the deep
per portion o
of the
basin, to wet gas and eventually
y oil at shallo
ower levels. Depth to sh
hale averages about 7,5
500 ft
0 ft. Porosity is estima
to 12,500 ated at abou
ut 5%. The basin is slig
ghtly over-pressured with an
estimated
d 0.50 psi/ftt gradient. Gas
G impuritie
es such as C
CO2 or N2 a e minimal in most
appear to be
of the basin.
3.3 Resource
R Assessmen
A nt
Dry ndow. The

D Gas Win e mapped prospective
p area within the dry ga
as window o
of the
stimated at 860 mi2. Lower
Podlasie Basin is es L Paleo
ozoic shale ((L. Silurian, Ordovician, and
Cambrian) has a moderate
m esource concentration of 122 Bccf/mi2.
re Rissked, techn
nically
as is estimatted at 5 Tcf, out of risked
d shale gas in-place of a
about 25 Tcff.
W Gas Wiindow. The

Wet e wet gas window
w is p rospective w 0 mi2.
within an arrea of 1,100
Risked te
echnically re
ecoverable shale resou
urces are esstimated at 4 Tcf of sh
hale gas and
d 0.2
billion ba
arrels of shale condensa
ate from risk
ked, in-place
e resources o
of 22 Tcf an
nd nearly 3 b
billion
barrels, respectively.
r .
June, 2013 VIII-26

O Window.. The oil window,

Oil w map
pped in the eastern Po
odlasie Basin, is prospe
ective
within an proximately 1,000 mi2. Risked, tech
n area of app hnically reco
overable sha
ale resource
es are
estimated
d at 0.4 billion barrels of shale oil and conde
ensate along
g with 0.7 T
Tcf of assocciated
shale gas
s, from an in
n-place riske
ed shale oil resource
r of n
nearly 9 billio
on barrels.
3.4 Exploration
E n Activity
Several
S operrators hold shale gas exploration licenses in
n the Podla
asie Depresssion.
Marathon
n drilled one
e vertical sha
ale exploratio
on well in the
e basin but h
has not relea
ased resultss.
June, 2013 VIII-27

4. FORE-SUDE
F ETIC MONOCLINE

ntroduction
Unconvention
U nal gas plays
s, mainly tight sandston e but potenttially includin
ng shale gass, are
being pursued in the
e Fore-Sudettic Monocline of southwe
estern Polan
nd, Figure V
VIII-15. Whille the
deposited Lo
marine-d ower Paleoz
zoic shales are too dee
ep to be pro
ospective in
n this region
n, the
overlying
g Carboniferrous non-ma
arine shales
s may be p resent at de
epths of 2 to 5 km. S
Shale
exploratio
on is less active here th
han in the Baltic
B Basin, but at leastt two compa
anies (San L
Leon,
PGNiG) have reporte
ed leasing and drilling.
The 0,000-mi2 Fo
T nearly 20 ore-Sudetic Monocline iis considere
ed a southerrn continuation of
the Mid-P
Polish Troug
gh, where Paleozoic
P an
nd younger sstrata shoal to shale-pro
ospective de
epths
of about 2 to 5 km.29 The Lowe
er Permian Rotliegend ssandstone h
has been de
eveloped forr tight
gas prod
duction in this province for several decades, Fiigure VIII-16
6. Figure V
VIII-17, a reg
gional
st-northeast cross-section, indicate
southwes es that the structural g
geology is rrelatively sim
mple,
although additional faults
f are like
ely to be pre
esent. Indee
ed, San Leo
on Energy ha
as noted tha
at the
ality seismic available in this region masks
poor qua m the trrue geologicc structure, th
hus the com
mpany
recently acquired
a fou otaling 650 kkm2 and overr 1,000 km o
ur 3D seismic surveys to of 2D seismic.
Figu
ure VIII-15: Forre-Sudetic Mo
onocline of Southwestern P oland, Showinng Shale Prosspective Area..
Source: ARI, 2013.
June, 2013 VIII-28

Figure VIII-16:
V Stratig
graphy of the Carboniferous
C s and Younger Formations in the Fore-Suudetic Monocline.
Source:
S San Leeon Energy, 20122
Figure VIII-17:
V Structu
ural Cross-Secction In The Fore-Sudetic
F M
Monocline Of S Southwest Pooland Baltic Baasin
Sh
howing Relativvely Simple Structure
S And Widely
W Spaceed Faults (verttical exaggeraation = 10x).
Source: Sann Leon Energy, November

N 2012
June, 2013 VIII-29

A thick non--marine, coal-bearing Carboniferou

C us sequencce is present, with mu
ultiple
targets of
o tight sand
dstone, deep
p coal seam
ms, and carrbonaceous shales. Th
he Carbonife
erous
underlies
s the Rotlieg
gend sandstone and sou
urced it with
h natural gass, which FX Energy rep
ported
averages
s about 80% bon dioxide..30 The overrall stratigraphic sequen
% methane and 20% carb nce in
the Carboniferous ap
ppears broad
dly similar to
o that of the REM shale--sandstone-coal sequen
nce in
per Basin of Australia, where
the Coop w initial shale gas p roduction ha
as been reported. San Leon
Energy, FX Energy, PGNiG and
d other comp
panies are a
actively explloring for sh
hale gas herre but
scant datta have been released.
San
S Leon En
nergy disclos
sed that it is evaluating tthe Carboniferous shale
e gas potenttial of
the Pre-S
Sudetic Mon ch reportedly is structurrally simple and over-prressured.31 Note
nocline, whic
h shales in the Pre-Su
that the organic-rich ocline were deposited in a non-m
udetic Mono marine
setting and
a are ass
sociated witth coal dep
posits, thus may be cla
ay-rich and ductile. L
Lower
Paleozoic marine-de
eposited roc
cks, similar to those prresent in the Baltic Basin, underlie
e the
erous in thiis region, but
Carbonife b are likely
y too deep to be prosspective and
d thus were
e not
assessed
d.
4.2 Reservoir
R Properties
San
S Leon Energy estim
mates the Carboniferouss shale in tthe Fore-Su
udetic Mono
ocline
contains 1% to 5% TOC,
T is in the dry gas thermal
t matturity window
w (Ro of 1.3
3% to 2.0%)), and
contains 20% to 60%
% silica with 2% to 8% total
t porositty. ARI estim
mated the o
organic-rich sshale
interval to
t be 330 ftt thick, with
h about half considered
d as net payy (165 ft). Depth averrages
om 8,000 to 16,000 ft. The basin iss reported to
12,000 ftt, ranging fro o be slightlyy over-presssured.
o nitrogen contaminattion (20%) are expeccted, based on the tyypical
Significant levels of
composittion of produ
uced gas from the overly end sandstone.
ying Rotliege
4.3 Resource
R Assessmen
A nt
The
T large butt poorly cons 70-mi2 prosp
strained 9,07 pective area
a mapped in the Fore-Su
udetic
Monoclin
ne based on
n depth appe
ears to be entirely
e withiin the dry gas thermal maturity win
ndow.
arboniferous shale is estimated to have moderate resource cconcentratio
The Ca on of
mately 67 Bcf/mi2. Riske
approxim y recoverab le resourcess are estimated at 21 Tccf, out
ed technically
of risked shale gas in
n-place of 10
07 Tcf.
June, 2013 VIII-30

VIII. Poland World Shale Gas and Shale Oil Resource Assesssment
EIA/ARI W
4.4 Exploration
E n Activity
The
T only sha
ale gas exp
ploration well announce
ed to date in the region is San Le
eon’s
vertical well,
w which tested
t the Carboniferou
C s shales. T
The 3,520-m
m deep Sicin
niy-2 well lo
ogged
continuous gas sho
ows across the 1-km th
hick Carbon
niferous secction. Two tight sandsstone
intervals totaling 185
5 m thick and
a three sh
hale zones w
were identiffied, both hiighly fracturred in
core. Th
he quartz co
ontent of the shale was described
d ass high. San
n Leon estim
mated total g
gas in
place at 450 Bcf/mi2, of which 280
2 Bcf/mi2 is in sandsstone and 170 Bcf/mi2 iin shale. A
At last
report, th
he company planned to frac
f the well.
REFERE
ENCES
1 Hadro, J., 2009. “Shale-G

Gas Potential inn Poland.” Geophysical Researrch Abstracts, vvol. 11, EGU20009-7241, EGU G
General
Assemblyy 2009.
2 Soesoo, A.
A and Hade, S., 2009. “U-Rich Graptolite
G Shales of Baltoscandiia.” Goldschmiddt Conference Abbstracts, p. A12445.
3 Nielsen, A.T.
A and Schovvsbo, N.H., 20110. “The Loweer Cambrian off Scandinavia: Depositional Ennvironment, Seqquence
Stratigrapphy and Palaeoggeography.” Earrth Science Reviiews, vol. 107, pp. 207-310.
4 Nowak, G.J.,
G 2007. “C Comparative Stuudies of Organic Matter Petroography of the Late Palaeozooic Black Shales from
Southwesstern Poland.” Innternational Journal of Coal Geoology, vol. 71, p.. 568-585.
5 Oszczepalski, S., 1999. “Origin
“ m Deposita, vol. 34, p.
of the Kuupferschiefer Poolymetallic Minerralization in Polaand.” Mineralium
599–613..
6 M J., and Koltuun, Y.V., 2006. “The Origin annd Habitat of Hyydrocarbons of tthe Polish and Ukrainian Partss of the
Kotarba, M.
Carpathiaan Province.” in J. Golonka andd F. J. Picha, eds., The Carpatthians and theirr Foreland: Geoology and Hydroocarbon
Resourcees. American Asssociation of Pettroleum Geologissts, Memoir 84, p. 395 – 442.
7 Golonka, J.,
J Krobicki, M., Omka, T.S., Waaakowska-Oliwaa, A., Kiessling, W
W., Bocharova, N.J., Edrich, M., Ford, D., Paukken, R.
and Wildharber, J., 20066. “Prediction of
o Source Rockss: Jurassic Casse Study.” 7th Innternational Conngress on the Jurassic
System, September 6-188, Kraków, Polaand. Abstract Volume,
V Sessioon 7: Organic G
Geochemistry – Jurassic Hydroocarbon
Potential..
8 Poprawa, P., 2010. “Shale Gas Potential of the Lower Paalaeozoic Compplex in the Baltic and Lublin-Podlasie Basins (Pooland).”
Przeglad Geologiczny, voolume 58, p. 2266–249 (in Polish)).
9 Polish Geoological Institutee, 2012. “Assesssment of Shale Gas
G and Shale O
Oil Resources oof the Lower Paleeozoic Baltic-Poodlosie-
Lublin Baasin in Poland.” March, Warsaw, Poland, 29 p.
10 U.S. Geoological Survey, 2012. “Potentiaal for Technicallyy Recoverable U
Unconventional Gas and Oil Reesources in the Polish-
Ukrainiann Foredeep, Polaand.” Fact Sheeet 2012-3102, Juuly, 2 p.
11 C., Cook, T.A., Charpentier, R.R., Kirschbaum,, M.A., Klett, T.R
Coleman, J.L., Milici, R.C R., Pollastro, R.M., and Schenkk, C.J.,
2011. “AAssessment of Undiscovered
U Oil
O and Gas Ressources of the Devonian Marceellus Shale of tthe Appalachiann Basin
Province,, 2011.” U.S. Geeological Surveyy Fact Sheet 20111–3092, 2 p.
12 USGS Marcellus Shale Assessment
A Teaam, 2011. “Infoormation Relevaant to the U.S. G
Geological Survvey Assessmentt of the
Middle Deevonian Shale of
o the Appalachian Basin Provinnce, 2011.” U.S
S. Geological Survey Open-File Report 2011–12298, 22
p. and Apppendix 2.
June, 2013 VIII-31

13 Corporatee Presentations and Analyst Caall Transcripts: Anadarko

A Petroleeum (February 220, 2013), Caboot Oil & Gas (Feebruary
21, 2013)), Chesapeake Energy
E (Februarry 21, 2013), Consol Energy (Feebruary 7, 2013), EQT Corporatiion (February 5, 2013),
National Fuel Gas (Febrruary 7, 2013), Range Resourcces (February 266, 2013), Southhwestern Energyy (February 21, 2013),
Talisman Energy (Februaary 13, 2013).
14 Poprawa, P., Sliaupa, S., Stephenson, R., and Lazauskieene, J., 1999. “LLate Vendian – Early Palaeozoic Tectonic Evoluution of
the Balticc Basin: Regionaal Tectonic Impliccations from Subbsidence Analyssis.” Tectonophyysics, vol. 314, pp. 219-239.
15 Wolkowiccz, K., Polonskaa, M., and Grootek, I., 2006. “Hydrocarbon G
Generating Poteential and their Migration Verssus the
Diagenetic Changes in Upper
U Jurassic and
a Lower Cretaceous Sedimen ts in the Polish Lowlands.” 7th International Coongress
on the Juurassic System, September 6-18, Kraków, Polaand. Abstract V
Volume, Sessionn 7: Organic Geeochemistry – Jurassic
Hydrocarrbon Potential.
16 PGNiG, News
N Release, November
N 15, 20012.
17 ConocoPhillips, Corporatee Presentation, February 7, 2013.
18 Kuchinskiy, V., Gentry, K.,
K and Hill, R., 2012.
2 “Source Rock
R Evaluationn Technique: A P
Probabilistic Appproach for Deterrmining
Hydrocarrbon Generationn Potential and In-Place Volume for Shale Plaays. American Association of Petroleum Geologists,
Annual Convention
C & Exhhibition, Long Beeach, California, April, 18 p.
19 Talisman Energy Inc., Q33 2012 Earnings Call, October 300, 2012.
20 Universityy of Utah, 20133. “Basin Analyysis of the Polissh-Ukrainian Siluurian Depositionnal Region with Focus on Shaale Gas
Controllinng Factors.” Unppublished brochuure, 13 p.
21 Narkiewiccz, K. and Narkieewicz, M., 2008. “The Mid-Frassnian Subsidencce Pulse in the LLublin Basin (SE E Poland): Sedim
mentary
Record, Conodont
C Biostraatigraphy and Regional Significaance.” Acta Geoologica Polonicaa, vol. 58, p. 287--301.
22 Zywiecki,, M.M., 2005. “Oil Charging and
a Gas Formattion Episodes inn the Devonian Carbonates off the Lublin Bassin (SE
Poland).” Mineralogical Society
S of Poland – Special Papers, vol. 26, 8 p..
23 Waksmunndzka, M.I., 2010. “Sequence Stratigraphy
S of Carboniferous
C Paaralic Deposits in the Lublin Bassin (SE Poland)..” Acta
Geologicaa Polonica, vol. 60,
6 p. 557–597.
24 Zywiecki, M.M. and Lewiss, M.P., 2011. “R Gas Potential in Poland.” American
Remarks from thhe Recent Recoggnition of Oil & G
Associatioon of Petroleum Geologists, Seaarch and Discovery Article #103 56, posted Septtember 19, 2011, adapted from ooral
presentattion at AAPG Annnual Conventionn and Exhibition, Houston, Texaas, USA, April 100-13.
25 Zawisza, L., 2006. “Hydrrodynamic Modeeling of the Hydrrocarbon Migrattion and Accumuulation in the Lublin Basin.” Socciety of
Petroleum
m Engineers, SP
PE 100296, 11 p.
26 PGNiG, News
N Release, March
M 26, 2012.
27 ExxonMobil, Q2 2012 Earrnings Call, July 26, 2012.
28 Koslowskki, W., 2008. “Litthostratigraphy and
a Regional Significance of thee Nowa Słupia G Group (Upper Siilurian) of the Łyysogóry
Region (H
Holy Cross Mounntains, Central Poland).”
P Acta Geologica
G Poloniica, vol. 58, p. 433-74.
29 Krzywiec,, P., 2006. “Triaassic-Jurassic Evolution of the Pomeranian
P —Basement Tectonics
Seggment of the Midd-Polish Trough—
and Subssidence Patternss.” Geological Quarterly,
Q vol. 50, p. 139–150.
30 FX Energy, Corporate Preesentation, Febrruary 6, 2013.
31 San Leonn Energy, Quarteerly Corporate Presentation, Q3 2012, 64 p.
June, 2013 VIII-32

IX. Russia EIA/ARI W
IX. RUSSIA
R A
SUMMA
ARY
Our
O shale ga
as and shalle oil resources assesssment for R
Russia addre
esses the U
Upper
Jurassic Bazhenov Shale in th
he West Siberian Basiin, Figure IX-1. This organically rich,
siliceous shale is the
e principle source
s rock for the convventional ga
as and oil prroduced from
m the
West Sib
berian Basin. We also examined
e oth
her shale ba
asins (e.g., T
Timan-Pecho
ora) but werre not
able to assemble suffficient, publicly available
e data for a quantitative resource asssessment.
Fig
gure IX-1. Pro
ospective Shaale Gas and Shhale Oil Basinns of Russia
Source: ARI,
A 2013
June, 2013 IX
X-1
For the Bazh

henov Shale
e, we estima
ate 1,243 billion barrelss of risked sshale oil in-p
place,
with 74.6
6 billion barrels as the risked, technically recove
erable shale e, Table IX-1. In
e oil resource
addition, we estima
ate 1,920 Tc
cf of risked
d shale gas in-place, w
with 285 Tccf as the rissked,
ble shale gas resource, Table IX-2.
Taable IX-1. Shale Oil Reservo

oir Properties aand Resourcees of Russia
West Siberian
Basin/Gross Area 2
Basic Data
(1,350,000 mi )
Shale Formation Bazhhenov Central B
Bazhenov North
Geologic Age U. Jurasssic - L. Cretaceous U. Juraassic - L. Cretaceouus
Depo
ositional Environm
ment Marine Marine
2
Prospecctive Area (mi ) 116,200 74,400 14,800 10,540
Physical Extent

Thickneess (ft)
Net 85 85 85 85
Interval 6,5500 - 12,000 6,500 - 13,000 8,500 - 15,000 10,,000 - 16,000
Depth (fft)
Average 8,200 9,800 12,000 13,500
Reservo
oir Pressure Highlly Overpress.
Properties
Reservoir
Overpress. Overpress. O
Overpress.
Averagee TOC (wt. %) 10.0% 5.0% 5.0% 5.0%
Thermaal Maturity (% Ro) 0.85% 0.85% 1.15% 1.45%
Clay Co
ontent Low Low Low Low
Gas Phase Assoc. Gas Assoc. Gas Wet Gas Dry Gas
Resource
2
mi )
GIP Concentration (Bcf/m 22.9 19.4 42.0 66.0
Risked GIP (Tcf) 1,196.0 378.9 163.0 182.5
Risked Recoverable (Tcf) 143.5 45.5 40.8 54.8
Source: ARI, 20013
Tab
ble IX-2. Shalee Gas Reservo
oir Properties and Resourcees of Russia
West Siberian
Basin/Grosss Area
Basic Data
2
(1,350,000 mi )
Shale Formmation Bazhenov Central Bazhenov North
Geologicc Age U Jurassic - L. Cre taceous
U. U. Jurrassic - L. Cretaceoous
Depositional En
nvironment Marine Marine
2
P
Prospective Area (mi
( ) 116,200 74,4400 14,8000
Physical Extent
Orgganically Rich 100 1000 100

T
Thickness (ft)
Nett 85 855 85
Interval 6,500 - 12,0000 6,500 - 13,000 6,500 - 133,000
D
Depth (ft)
Average 8,200 9,8800 12,0000
Hig hly Highly
R
Reservoir Pressure Highly Overpreess.
Properties
Reservoir
Overppress. Overpreess.
Average TOC (wt. %)
A % 10.0% 5.00% 5.0%
%
T
Thermal Maturity (%
( Ro) 0.85% 0.855% 1.15%%
C Content
Clay Low Loow Loww
O Phase
Oil Oil O
Oil Condensate
Resource
2
O Concentration
OIP n (MMbbl/mi ) 18.5 133.4 4.3
R
Risked OIP (B bbl)) 964.8 2611.5 16.88
R
Risked Recoverable (B bbl) 57.89 15.69 1.01
Sourrce: ARI, 2013
June, 2013 IX
X-2
1. WEST
W SIBE
ERIAN BAS
SIN

ntroduction
T 850,000--mi2 West Siberian

The S Bas
sin is the larrgest petrole n the world1. The
eum basin in
basin lies between the
t Ural Mo
ountains to the west an
nd the Yenissey River to
o the east, while
g north offsh
extending hore under the Kara Sea
a and reach ing south to the border w
with Kazakh
hstan,
Figure IX
X-1.
Conventional
C s production has taken p
oil and gas place in the basin since
e the 1960’s, with
reservoirrs found pre
edominately
y in Cretace
eous sandsttone formattions. Oil prroduction occcurs
mainly in
n the southe
ern and central regions of the basi n, with gas fields more
e prevalent in the
north. Th
he West Siberian Basiin contains tens of gia
ant and sup
per-giant fie
elds such ass the
Samotlorr oil field (28
8 billion barrrels of origin
nal oil reservves) in the ccentral Midd
dle Ob petro
oleum
region an
nd the 350-T
Tcf Urengoy gas field no
orth of the A
Arctic Circle. Although th
he West Sib
berian
Basin stiill delivers over
o 60% off Russia’s annual
a oil prroduction, itts output pe
eaked in the
e late
1980’s. Declining
D co
onventional production is stimulati ng interest in finding n
new oil and
d gas
productio onventional resources.
on from unco
The
T Upper Ju
urassic Bazh
henov Shale nsidered the main
e, a marine sshale rich in TOC, is con
source ro
ock for the Western
W Siberian Basin’s conventio nal oil reserrvoirs. The Bazhenov S
Shale,
ary shale addressed in this
the prima t resource
e assessmen
nt, has been
n selectively drilled, provviding
shows an
nd variable quantities
q off oil productio
on.
Other
O formattions that may
m h gas and oil potentia
contain shales with al are the L
Lower
Jurassic Tyumen and Lower Cretaceous
C Achimov fo
ormations, Figure IX-2
2. The Tyu
umen
on is not con
Formatio nsidered prospective in the
t northern
n areas of th
he basin whe
ere it is proje
ected
to be at depths grea
ater than 16,400 ft (5,00
00 m). The publicly available data for the Ach
himov
Formatio
on is not su
ufficient for a quantita
ative resourcce assessm
ment. As ssuch, these
e two
formation
ns were exclluded from our
o shale gas and shale oil assessm
ment.
June, 2013 IX
X-3
Figure IX-2: Stratigraphic

S Column of thee West Siberiaan Basin
Source: Modified from Ulmisheek, 2003
June, 2013 IX
X-4
The
T West Sib
berian Basin
n is an intra--cratonic sag
g basin conttaining over 4,000 m (13
3,000
ft) of Mes
sozoic and Cenozoic
C sediments. Ba
asement roccks of Paleozzoic age were deeply erroded
prior to the Triass
sic period, with subse
equent earlyy Triassic continental rifting prim
marily
responsible for the formation of
o the basin. Major Triiassic rifts a are oriented in a
and faults a
predomin
nantly north--south alignm
ment, influen
ncing the strructural align
nment of larg
ge anticliness and
synclines
s that forme
ed in the latte Mesozoic
c. The centtral tectonic element of the basin is the
Triassic Koltogor-Ure
engoy grabe
en, which ex
xtends 1800
0 km north-tto-south and
d is 10 to 8
80 km
wide.2
The
T majority
y of discove
ered conven and gas resserves are found in g
ntional oil a gentle
anticlinal uplifted structural trap
ps, located on regiona
al arches, F
Figure IX-3. Faults, w
where
present, have a disp
placement of
o only a few
w tens of m
meters and sseldom penetrate above
e the
Lower-Middle Jurass
sic Tyumen Formation.
F
Figure
F IX-3. Cross-Section Across
A Centraal West Siberiian Basin.
(See Figure
F 4 for locaation; vertical exaaggeration 100xx)
(Layer J3 iss the Bazhenov S
Shale)
Source: Ulmishek, USGS 20033.
June, 2013 IX
X-5
We
W have parrtitioned the Bazhenov Shale
S in the
e Western S
Siberian Basin into two a
areas
based on TOC and
d thermal maturity:
m Baz henov Centtral.,.
zhenov Nortth and Bazh Bazh
henov
2
North, with
w a prospe
ective area of 99,740 mi
m and an average TO
OC of 5%, contains oil, wet
densate and dry gas. Bazhenov
gas/cond B Ce 16,200 mi2 a
entral, with a prospectivve area of 11 and a
high average TOC off 10%, is the
ermally matu e oil, Figure IIX-4.3,4
ure for shale
Figure IX
X-4. West Sibeerian Basin, Prrospective Areeas for Shale Gas and Shale Oil
Source: ARI,
A 2013.
June, 2013 IX
X-6
1.2 Reservoir
R Properties
The
T Upper Ju
urassic Bazh
henov Shale
e is present a
across much
h of the Wesst Siberian B
Basin,
outcropp
ping at the basin
b edges and reachin
ng depths off over 16,40
00 ft (5,000 m) in the ce
entral
northern region. The
e shale’s gro
oss thickness typically ra
anges from 6
65 to 160 ft (20 to 50 m), but
can reach up to 200 ft (60 m) in localized
l are
eas.
The
T Bazheno
ov Shale was
w deposite
ed in a dee
ep marine, anoxic envvironment and is
compose
ed primarily of siliceous
s argillites, rich in plan pe II organicc matter.5
nktonic Typ TOC
contents are genera
ally highest in the centtral region o
of the Basin, typically exceeding 15%,
X-5.6 TOC values
Figure IX v decre
ease towards the periph
hery of the b
basin and to
o the north w
where
the TOC
C typically ra
anges from 2 to 7%. TOC
T averag
ges 5% in B
Bazhenov North and 10
0% in
ov Central.5
Bazheno
Figure IX-5.
I Reservoiir Properties of
o the Bazhenoov Shale from
m Maslikhov W
Well.
Source:
S Lopatin ett al., 2003.
June, 2013 IX
X-7
The
T literaturre describes
s the Bazh
henov as being overr-pressured, caused b
by oil
generatio
on and expu he shales passed throu
ulsion as th ugh the “oil window”. M
Measured sh
hut-in
bottom-h
hole pressure
es in the Sa
alym oil field region are rreported in ssome wells to be abnorrmally
bove normal hydrostatic
high, up to 70% ab c pressure.7 Temperatu
ure gradientts are also high.
Clay content is usually reported as less than
n 20%.
The
T Bazheno onsists of layyers of high--TOC shale interbedded
ov reservoir structure co d with
carbonatte/dolomite layers.8 The
e shales are
e the source
e of the oil, with the fracctured carbo
onate
layers prroviding additional reserv
voir capacity
y. This is so
omewhat ana
alogous to the Bakken S
Shale
play of North
N Dakotta, which co
omprises a carbonate rreservoir “sa
andwiched” between tw
wo oil
rich/saturated shales
s.
Bazhenov
B No
orth is prosp
pective for oil, wet gas/co and dry gas.. The 74,400-mi2
ondensate a
area prospective forr shale oil in
n Bazhenov North is de
efined by vitrrinite reflecta
ance (Ro) va
alues
between 0.7% and 1.0%, TOC content
c grea
ater than 2%
%, and reservvoir depth grreater than 3
3,300
2
ft. The 14,800-mi
1 area
a prospec
ctive for wett gas and co
ondensate in
n Bazhenovv North is de
efined
by Ro values betwee
en 1.0% and e 10,540-mi2 area prosp
d 1.3%. The pective for d
dry gas is de
efined
by Ro values greaterr than 1.3%, Figure IX-6
6A. The Bazzhenov Nortth prospectivve area is fu
urther
ned on the east
constrain e side off the basin, where the Bazhenov S
Shale chang
ges from a deep
marine shale to shalllow clastic deposit,
d Figure IX-6B.
Bazhenov
B ains a 116,,200-mi2 pro
Central conta area for oil, with a the
ospective a ermal
maturity (Ro) of 0.7 to 1.0%. The TOC content
c of tthe shale iss high in Ba
azhenov Ce
entral,
milarly, the Bazhenov
averaging 10%. Sim B Ce
entral prosp
pective area is limited on
n the east b
by the
marine shale to clasttic sediments facies cha
ange.
June, 2013 IX
X-8
Figure IX
X-6A. West Siberiaan Basin - Vitrinitee Reflectance Figure IX-6B. W
West Siberian Basinn - Lithofacies Maap
S
JJune, 2013 IX-9

1.3 Resource
R Assessmen
A nt
The
T shale oil
o in the Ba
azhenov No
orth prospecctive area has an esttimated reso
ource
concentrration of 13 arrels/mi2 plus associa
3 million ba ated gas in
n the oil w
window; reso
ource
concentrrations of 4 million
m els/mi2 and 42
barre 4 Bcf/mi2 in
n the wet gass/condensatte window; a
and a
e concentration of 66 Bcff/mi2 in the dry
resource d gas wind
dow. The sh
hale in the B
Bazhenov Ce
entral
prospective area ha
as an estim urce conce ntration of 18 million barrels/mi2 plus
mated resou
associate
ed gas in the
e oil window
w.
For the total Bazhenov

B sh
hale prospec
ctive area in
n the West S
Siberian Basin, we estim
mate a
hale oil in-pla
risked sh ace of 1,243
3 billion barre
els, with 74.6
6 billion barrrels as the risked, techn
nically
recoverable shale oil resource, Table
T IX-1. In addition, for this prosspective are
ea, we estim
mate a
risked sh
hale gas in-p 20 Tcf, with 285 Tcf as tthe risked, ttechnically re
place of 1,92 ecoverable sshale
gas resource, Table IX-2.
n its 2011 Annual

In A Repo
ort, Rosneftt estimated the compan
ny had 4.4 billion barre
els of
recoverable oil resou
urces from th v “suite” on iits license areas in Wesstern Siberia.9
he Bazhenov
1.4 Recent
R Activity
The
T majority of Russia’s current oil production
p (n
nearly two th
hirds) comess from large fields
in the West
W Siberia
an Basin, lo
ocated betwe
een the Ura
al Mountain
ns and the Central Sib
berian
Plateau, with the re
emaining oill production mainly from the Volga-U
n coming m Urals region
n, the
Timan-Pe
echora Basin, the north Caucasus Region,
R and the Sakhelin
n Basin.
The
T oldest fields have produced
p sin
nce the 194
40s and pro es are declining,
oduction rate
even with
h the new te
echnical focu
us on secon
ndary recove
ery and hydrro-fracturing
g. Exploratio
on for
conventio
onal oil and gas is in the
e more remo
ote East Sib
berian Basin and in the h
higher cost A
Arctic
region. As
A such, Ru
ussian oil co
ompanies are
e becoming interested iin the drilling
g and produ
uction
technique
es used in the U.S. to develop the
eir unconve
entional oil a
and gas ressources. Rossneft,
Russia’s national oil company, has
h signed agreements
a w
with ExxonM
Mobil and Sttatoil with the
e aim
of using horizontal drilling
d and large scale stimulation
s ttechniques tto unlock the vast shale
e gas
and shale
e oil resourc
ces of Russia
a.
June, 2013 IX-10

To
T date, Rosneft and Exx
xon Mobil ha
ave announ ced plans to
o begin drilling the Bazh
henov
Shale in 2013, after completion of
o their geolo
ogic study. Gazprom N
Neft and She
ell, as part off their
beria JV, pro
West Sib oposed to start drilling th
he Bazhenovv Shale in e
early 2014 ne
ear the Salyym oil
field, whiich has a his
story of Bazhenov Shale
e oil producttion. Lukoil has announ
nced plans to
o test
the Bazh
henov reserv
voir in two arrea of West Siberia.
S 10
Development
D t of the Baz
zhenov Sha
ale is compllicated by R
Russia’s currrent tax reg
gime,
which is geared towa
ards conven
ntional reserv
voirs. The R
Russian govvernment is ccurrently wo
orking
oposal to change the mineral exttraction tax (MET) for “tight oil” rreservoirs w
on a pro with a
permeab mD).11 It is possible th
bility of less than 2 millidarcies (m hat shale ga
as and shale oil
reservoirrs would be incorporated
i d into the pro
oposed chan
nge in the M
MET.
June, 2013 IX-11

2. TIMAN-PEC
T CHORA BA
ASIN
The
T Timan-P
Pechora Bas
sin covers an onshore a
area of abou mi2 on the A
ut 122,000 m Arctic
Circle off northern Russia,
R Figure IX-1. Th
he principle source rock in this ba
asin is the U
Upper
n (Frasnian) organic-rich
Devonian h shale in the Formation.12
e Domanik F
These
T source
e rocks, com
mposed of thin-bedded
t , dark silice
eous shales, limestoness and
marls, we
ere deposite p water marine setting. The source
ed in a deep e rocks conttain Type I a
and II
kerogen with total organic
o content (TOC) ranging
r m 1% to 15%, typically averaging 5%13.
from
ource rocks are present,, with adequate thicknesss and maturity, over mu
These so uch of the Tiiman-
Pechora Basin exce
ept for the southwestern
s n margin. W
With therma
al maturity o
of 0.6% to 1
1.0%,
these source rocks are
a primarily
y in the oil window.
w The
e mineralogyy of the sha
ale appears to be
<10%) clay.14
e, with low (<
favorable 1
While
W the gro
oss thickness of the Dom
manik intervval can range from 100 m to 300 m (330
to 1,000 ft), publicly available in
nformation is
s lacking on its net orga
anic-rich inte
erval, its porosity
ssure. The Domanik
and pres D Forrmation has been correl ated with the
e Duvernay Formation/S
Shale
in Weste y Basin.13
ern Canada Sedimentary
S
At
A current tim
me, the pub
blicly availab
ble geologicc and reserrvoir data a
are insufficie
ent to
prepare a quantitativ
ve shale oil and gas re
esource asssessment fo
or the Doma
anik Shale in the
Timan-Pe
echora Basiin. Other so n, but have been
ource rocks and shaless also exist in this basin
excluded
d from the assessment. The Late Jurassic
J to E
Early Cretacceous (Kimm
meridgian) shales
in this ba
asin have hig
gh TOC but are reported
d to be therm
mally immatu
ure. The Silurian-Ordovvician
shales in
n this basin appear
a to ha C of 0.5% to 1.5%.12
ave low TOC
June, 2013 IX-12

REFERE
ENCES
1 Ulmishek, G.F., 2003. “Petroluem Geology and Resouurces of the Weest Siberian Baasin, Russia.” U
U.S. Geological Survey
Bulletin 2201-G, U.S. Geological Survey, Reston, Virginiaa.
2 Littke, R., Cramer, B., Gerrling,P., Lopatin,, N.V., Poelchauu, H.S., Schaeferr, R.G., and Weelte, D.H., 1999.. “Gas Generatiion and
Accumulaation in the Westt Siberian Basin.” AAPG Bulletinn, vol. 83, no. 100, p. 1642-1665.
3 Peters, K.E., Ramos, L.S
S., Zumberge, J.E., Valin, Z.C.,, Scotese, C.R.,, and Gautier, D D.L., 2007. “Circum-Arctic Pettroleum
Systems Identified Using Decision-tree Chemometrics.”
C AAPG
A Bulletin, V
V. 91, No. 6 (Junne 2007), pp. 8777-913.
4 Lopatin, N.V.,
N Zubairaev, S.L., Kos, I.M
M., Emets, T.P., Romanov, E.A A. And Malchikhhina, O.V., 20033. “Unconventioonal Oil
Accumulaations in the Uppper Jurassic Bazhenov
B Blackk Shale Formatiion, West Siberrian Basin: A S
Self-Sourced Reeservoir
System.” Journal of Petrooleum Geology, vol. 26, p. 225-2244.
5 Gavshin and
a Zakharov, 1996.
1 “Geochem mistry of the Uppper Jurassic-Low mation, West Siberia -
wer Cretaceouss Bazhenov Form
Abstract.”” Economic Geoology, vol. 91, p. 122-133
6 Grace, J.D., and Walch, D.B., 1996. “The
“ m of West Siberia.” AAPG Buulletin -
Bazhenov--Noecomian Peetroleum System
Abstract, vol. 5.
7 Limbergerr, Y. et al., 20000. “SW Siberia’ss Jurassic, Bazhhenov May Conttain Much Largeer Oil Reserves.” Oil and Gas JJournal,
May 20, vol.
v 98, Issue 21.
8 Nemova, V.D.,
V 2012. “Bazhenov Formatioon: Structure, Prroperties and Meethods of Laboraatory Research.” Society of Pettroleum
Engineerss Moscow sectioon meeting, Novv 13, 2012. Retrieeved from http:///www.spe-mosccow.org/meetingss/ 01/09/13.
9 Rosneft Oil Company, 20111. Annual Repoort.
10 http://www
w.lukoil.com/
11 Rodova, N., 2012. “Will Russia Replicate US Success in Tight Oil Deveelopment?” Plattts Online, Auguust 23, 2012. Reetrieved
from http::/www.platts.com
m/newsfeature/2012/oi/russianoil/index 01/10/133.
12 The Timan-Pechora Basin Province of Northwesst Arctic Russiaa: Domanik–Paleeozoic Total Pettroleum
Lindquist, S.J., 1999. “T
System.” U.S. Geologicaal Survey Open-F
File Report 99–550–G, 40 p.
13 Abrams, M.A.
M et al. 1999.. “Oil Families and
a Their Potenttial Sources in thhe Northeastern Timan Pechora Basin, Russia.”” AAPG
Bulletin, vol.
v 83, no. 4, Appril, p. 553-577.
14 Fossum, B.J. et al., 20001. “New Frontiers for Hydroccarbon Producti on in the Timan-Pechora Basiin, Russia.” Pettroleum
Provincess of the Twenty-First Century: AAPG
A Memoir 744, Chapter 13, p . 259-279.
June, 2013 IX-13

X. Eastern Europe
E (Bulgariaa, Romania, Ukrraine) EIA/ARI W
X. EASTER
E RN EUR
ROPE (B
BULGAR
RIA, ROMA
ANIA, UK
KRAINE)
SUMMA
ARY
Eastern
E Euro
ope (ex. Pola
and, assesse
ed separate
ely) has significant prosp
pective shale
e gas
and oil resources in
i three se
edimentary basins:
b the Dniepr-Don
nets Basin, the Carpa
athian
d Basin, and
Foreland d the Moes
sian Platform
m, Figure X
X-1. Shale exploration
n is underway in
Ukraine and
a Romania, while Bulgaria curren
ntly has a mo
oratorium on
n shale deve
elopment.
Figure X-11: Prospectivee Shale Basinss of Eastern E

Europe
Source: ARI, 2013.
June, 2013 X-1

X
X. Eastern Europe
The
T total risk
ked, technica
ally recovera
able shale re
esource pottential for the three basins is
d at 195 Tcff of shale gas and 1.6 billion barrels of shale oil and conden
estimated nsate, Tables X-1
and X-2. Our new, larger interpretation of th
he shale ressource is ba
ased on rece
ent shale lea
asing,
drilling, and
a seismic activities
a tha
at were stimu
ulated in parrt by the 201
11 EIA/ARI sstudy.
Table X-1:
X Shale Gaas Reservoir Properties
P andd Resources, E
Eastern Europpe.
Carpathian
n Foreland Dniepr-Donets Moeesian Platform
Basin/Gross Areea 2 2
Basic Data
2
(70,000 mi ) (23,200 mii ) (445,000 mi )
Shale Formationn L. Silurian L. Carboniferous L. Siluriaan Etroopole
Geologic Age L. Silurian L. Carboniferrous L. Siluriaan L. Juurassic
D
nment Marrine Marine Marine Maarine
2
Prosspective Area (mi ) 16,0080 1,4660 2,680 6,010 840 760 7,9940
Physical Extent
Organicaally Rich 1,0000 7000 700 700 600 600 650

Thicckness (ft)
Net 4000 3500 350 350 450 450 260
Interval 3,300 - 16,400 3,300 - 16,400
1 3,300 - 16,4400 3,300 - 16,400 6,600 - 16,400 13,0000 - 16,400 5,000 - 16,400
Depth (ft)
Average 10,0000 11,0000 12,000 13,000 11,000 14,000 10,,000
Mod. Mod. Higghly
Reseervoir Pressure Norrmal Norm
mal Normal Normal
Properties
Reservoir
Overpresss. Overpress. Overpress.

Averrage TOC (wt. %) 2.00% 4.5%% 4.5% 4.5% 3.0% 3.0% 3.0%
Therrmal Maturity (% Ro)) 2.50% 0.900% 1.15% 2.00% 1.15% 2.00% 1.115%
Clayy Content Meddium Low w Low Low Medium Medium Meddium
Gas Phase Dry Gas Assoc . Gas Wet Gas Dry Gas Wet Gas Dry Gas Wett Gas
Resource
2
Riskked GIP (Tcf) 3622.5 14.4 63.5 234.6 22.5 25.8 1448.2
Riskked Recoverable (Tcff) 722.5 1.44 15.9 58.6 4.5 5.2 377.1
Source: ARI 2013.
Table X-2: Shale Oil Reservoir Prroperties and Resources, E

Eastern Europe.
Dniepr-Doneets orm
Moesian Platfo
Basin/Gross Area
A 2 2
Basic Data
(23,200 mi ) (45,000 mi )
Shale Formation L. Carboniferoous L. Silurian E
Etropole
Geologic Age L. Carboniferoous L Silurian
L. L. Jurassic
Deepositional Enviro
onment Marine Marine M
Marine
2
Prosppective Area (mi ) 1,460 2,680 840 7,940
Physical Extent
Organiically Rich 700 700 600 650

Thickkness (ft)
Net 350 350 450 260
Intervaal 3,3000 - 16,400 3,3300 - 16,4006,600 - 16,400 5,0000 - 16,400
Depthh (ft)
Averag ge 11,000 12,000 11,000 10,000
Highly
Reserrvoir Pressure N
Normal Mod . Overpress. Normal
Properties
Reservoir
Ovverpress.
Averaage TOC (wt. %) 4.5% 4.5% 3.0% 3.0%
Thermmal Maturity (% Ro)
R 0.90% 1.15% 1.15% 1.15%
Clay Content
C Low Low Medium M
Medium
Oil Phase Oil Coondensate Coondensate Co ndensate
Resource
2
OIP Concentration
C (MM
Mbbl/mi ) 45.3 18.1 8.9 5.0
Riskeed OIP (B bbl) 13.2 9.7 1.6 7.9
Riskeed Recoverable (B
B bbl) 0.66 0.48 0.08 0.40
Source: ARI 2013.
June, 2013 X-2

X
X. Eastern Europe
The
T main sha
ale targets in Eastern Europe
E are m
marine-depo
osited black shales within the
Lower Carboniferous R of 76 Tcf and 1.2 billlion barrels)); the
s of the Dniepr-Donets Basin (TRR
Silurian of
o the Carpa
athian Forela 73 Tcf); and the Silurian and Jurasssic Etropole sshale
and Basin (7
deposits of the Moes
sian Platform
m (47 Tcf an
nd 0.5 billion
n barrels). B
By country, tthe estimate
es are
Ukraine (128 Tcf and
d 1.2 billion barrels); Ro
omania (51 T
Tcf and 0.3 billion barre
els); and Bullgaria
(17 Tcf and
a 0.2 billio
on barrels). Compared
d with North America, th
he shale ge
eology of Ea
astern
Europe is
s more comp
plex, althoug
gh faulting appears
a less prevalent th
han in other parts of Eurrope.
Shale
S resourrce assessm
ments are re
eported to b
be underwayy in Ukraine
e, Romania, and
Bulgaria but no official assessments have been
b publish ed yet. To date only on
ne shale-foccused
exploratio
on core we n drilled in the region (Bulgaria); no producction testing
ell has been g has
occurred. In Ukrain
ne, Shell rec
cently signe
ed a Producction Sharing
g Agreemen
nt in the Dn
niepr-
Donets Basin,
B comm
mitting at lea
ast $200 million for exp
ploration, w
while Chevron reportedlyy has
been neg
gotiating for a block in th
he Ukraine portion
p of the
e Carpathian
n Foreland B
Basin. Chevvron’s
previously awarded shale
s blocks
s in Romania
a and Bulgarria have bee
en put on hold.
INTROD
DUCTION
Since
S EIA/AR
RI’s initial shale
s assessment first defined the
e potential in 2011, se
everal
Eastern European countries hav
ve begun to
o investigate
e their shale gas/ and shale oil reso
ource
potential. International oil and gas compan
nies, includi ng Chevron
n and Shell, have negottiated
shale exploration lice
enses in Bulgaria, Roma
ania, and Po
oland. The countries off Eastern Eu
urope
ng various approaches
are takin s to shale exploration
n. Ukraine currently welcomes sshale
investme
ent. On the other hand,, Bulgaria an
nd Romania
a have place
ed shale exp
ploration on hold,
after initia
ally proceed
ding with sha
ale leasing.
Ukraine.
U The Ukraine State Service al Resources (Gosgeonedra)
e of Geologyy and Minera
has anno urces in the country of 7 trillion m3 ((Tm3) or 247
ounced shale gas resou 7 Tcf.1 How
wever,
the basis
s for this estimate
e has
s not been released a
and the figu
ure includes some tightt gas
resource
es. The new
wly created Geological
G Research
R an
nd Productio
on Center in Poltava pla
ans to
coordinate shale ga
as studies in Ukraine, while mon
nitoring watter quality iin drilling a
areas.
s current Pro
Ukraine’s oduction Sha
aring Agreem
ment (PSA) involves a 5
5-year exploration period
d and
up to 45 years for de
evelopment.. Tender fees are mode
est: $60,000
0 for the ten
nder and $10
0,000
eologic inforrmation pack
for the ge kage.
June, 2013 X-3

X
X. Eastern Europe
On
O February 23, 2012 the
e Ukraine go
overnment a
announced a tender for sshale explorration
and dev
velopment in
n the Oleska and Yu
uzovska blo cks of wesstern and e
eastern Ukrraine,
respectiv
vely. Shell, ExxonMobill, Chevron, ENI, and TN
NK-BP initia
ally responde
ed to the te
ender.
In Janua
ary 2013, Ukraine awarrded the firs
st shale gass PSA, sign
ning with Sh
hell at the W
World
Economic Forum in Davos,
D Switzerland. Sh
hell’s 50-yea
ar PSA perm
mit at Yuzovsska in the ea
astern
Donets Basin
Dniepr-D n covers an area
a of 7,886 km2 and a
assigns oil an
nd gas rightss to all strata
a to a
depth of 10 km, including tight and
a basin-centered gass. The conttract allows for 70% invvestor
% governme
recovery and a 16.5% ent revenue share.
Chevron
C has been in neg
gotiations with ernment for a PSA at th
w the gove he Oleska fie
eld in
western Ukraine. Th
his block is along strike with Poland
d’s Lublin ba
asin, where Chevron alrready
holds sha
ale licenses.. Duration and
a terms lik
kely would be
e similar to tthose grante
ed to Shell.
Bulgaria.
B While
W the country
c lack
ks a shale--specific invvestment re
egime, Bulga
aria’s
conventio
onal oil and
d gas production terms are attractiive. Producction license
es extend fo
or 35
years, wiith royalties ranging from
m 2.5% to 30
0% on a slid
ding scale, w
with a 10% ccorporate inccome
tax. The
e Economy and Energy
y Minister has
h suggestted that Bulgaria’s shale gas resou
urces
could be o 1.0 Tm3 (11
e in the range of 0.3 to ( Tcf), but no supporting study has been
to 35 T
e Gas Research Group,, a newly forrmed consortium of Soffia Universityy and
released. The Shale
Bulgaria’s Institutes of Geology
y and Organic Chemisstry, is cond
ducting long
g-term studie
es of
organic-rrich shale de ulgaria.2
eposits in Bu
However,
H durring the pastt year public
c opposition tto shale gass developme
ent has incre
eased
dramatically in Bulga
aria. This opposition
o has
h been led
d by environmental org
ganizers, witth no
effective counter-balancing info
ormation campaign offe e petroleum industry or the
ered by the
government, such as
s exists in Poland.
P In January
J 201 2 the goverrnment bann
ned all shale
e gas
on and prod
exploratio duction, whe
ether or not it involves h
hydraulic fraccturing. The
e performan
nce of
the shale
e industry in Poland and
d the UK is expected
e to influence th
he future pollitical accepttance
and gove ulgaria.3
ernment policies in Romania and Bu
Romania.
R Romania also recently exploration and producction,
y banned sshale gas e
although some local observers believe its ban
b be easier to reverse tha
would b an Bulgaria’ss. In
May 2012 the newly
y elected Romanian gov
vernment beg
gan an inforrmal (i.e., no
ot legislated) ban
e gas explo
on shale oration activities, pendin
ng the outccome of Eurropean-leve
el studies on
n the
afety, and environmenta
health, sa development.
al aspects off shale gas d
June, 2013 X-4

X
X. Eastern Europe
Romania
R lack
ks specific regulations
r for
f shale ga
as developm
ment, thus shale applica
ations
fall under the country
y’s conventional petrole
eum terms. In 2011 the National Ag
gency for Miineral
es, which re
Resource egulates petrroleum operrations in Ro
omania, initia
ated a studyy of the country’s
shale ga
as deposits, in cooperattion with the esearch insttitute GeoEccoMar and three
e national re
universitiies (Buchare
est, Iasi and Cluj). No fu
urther detailss are availab
ble.
More
M than a dozen com
mpanies hav
ve expresse
ed interest in shale ga
as exploratio
on in
Romania
a. Beginning
g in March 2012
2 Chevro
on was awa rded four sh
hale gas exp
ploration lice
enses
totaling 9,000
9 km2, three blocks located in Dobruja
D and
d one in the Moldova re
egion. Hung
gary’s
MOL wa
as awarded three shale
e gas perm
mits in north
hwestern Ro
omania (Voiivozi, Adea,, and
Curtici). Sterling Res
sources and
d partner Tra
ansAtlantic P
Petroleum jo he 5,800-km2 Sud
ointly hold th
Craiova license
l of so
outhwest Ro
omania. Finally, state-o
owned energ
gy firm Romg
gaz reported
d that
it discove
ered shale gas
g resource
es in 5 out of
o 20 of its e
exploration w
wells in Transylvania, n
noting
that it had applied hy
ydraulic fracturing technology in Rom
mania as ea
arly as the m
mid-1990’s. All of
these pro
ojects are on
n hold due to
o Romania’s
s shale ban.
GEOLO
OGIC OVER
RVIEW
Eastern
E Euro eas with shale gas an
ope has three distinct shale-prosspective are nd oil
potential in Paleozoic and Mesozoice marine-deposited black shale
es. Within th
he Paleozoicc, the
erous and Silurian
Carbonife S black
k shales are most prospe
ective, while
e the mid-Jurassic shale
es are
most pro
ospective forr oil and gas within the Mesozoic.
M O
Other organicc-rich shaless exist locallly but
these ten
nd to be less
s widespread
d and/or are thermally le
ess mature, a
and thus we
ere not assesssed.
 Carpathian
C Foreland Basin.
B The moderatelyy complex L Lviv-Volyn BBasin of we
estern
Ukraine
U milar to the Lublin Basin
is sim n in southea ast Poland. However, tthe Silurian black
shale belt becomes strructurally sim mpler as it trends tow wards the ssoutheast accross
so
outhwesternn Ukraine an nd northern Romania un ntil it reache
es the Black Sea. This deep
Paleozoic
P belt north of the Carpathian Foldbelt iss called the CCarpathian F
Foreland Ba
asin.
 Dniepr-Done
D ets Basin. This well-de efined Late Paleozoic b basin in easttern Ukraine
e and
so
outhern Bela
arus contain
ns prospectiv
ve organic-ri ch L. Carboniferous black shales.
 Moesian
M Platform. Silurrian and Jurrassic black shales are p
present acro
oss Romania a and
Bulgaria.
B Noote that the Moesian Platform
P sha
ale plays aree less well defined than the
previous two plays and may
m be considerably larg essed here.
ger than asse
June, 2013 X-5

X
X. Eastern Europe
Other
O basins in Eastern Europe contain organicc-rich source
e rock shales but these were
deemed to be less
s prospectiv
ve. The la
arge Panno
onian-Transyylvanian ba
asin of Hun
ngary,
a, Serbia and
Romania d Montenegro, Slovenia
a, and Bosniia and Herzo
ogovina hass Paleozoic sshale
ppears too deep for shale development. The C
which ap Balkan, and related fold belts
Carpathian, B
appear much
m too stru
ucturally com
mplex to be prospective..
1. CARPATHIA
C AN FOREL
LAND BASIN (UKRAI NE-ROMA
ANIA-MOLD
DOVA)

ntroduction
Prosp
pective marin
ne black sha
ales of Siluriian age exte
end continuo
ously within a 50-
to 200- km
k wide Pale
eozoic belt, from Poland
d all the wayy to the Blacck Sea. In w
western Ukrraine,
Silurian deposits of southeast Poland’s Lu
ublin Basin continue in
nto the adjo
oining Lviv-V
Volyn
nventional oiil and gas fie
Basin, where 62 con elds have b een develop
ped. Much of the Lviv-V
Volyn
Basin ap
ppears to be too deep an
nd faulted for shale deve
elopment.
However,
H e Silurian belt becomes wider and s tructurally simpler as it continues fu
the urther
to the southeast ac
cross weste
ern Ukraine and northe
ern Romania
a, Figure X
X-2. After ssome
tectonic disturbance, the Silurian belt re-en
nters southe rn Ukraine a
and eastern
n Romania in the
Scythian Platform be
efore heading out into the Black Sea
a. It then briefly re-emerrges onto lan
nd on
the Crimean Peninsu
ula near Od
dessa before
e continuing offshore. T
The North D
Dobrogea Orrogen
es this belt from the Silurrian of the Moesian
separate M Platfform to the ssouth4, which was separrately
assessed
d. We refer to the Silurian belt as th
he Carpathia
an Foreland Basin, but o
other researcchers
have nam viv-Moldava Slope.5
med it the Lv
The
T Carpathian Foreland
d Basin has
s good shale
e gas development pottential in Sillurian
black sha
ales. As the
e foreland basin
b to the Carpathian thrust belt, this shale b
belt dips gen
ntly to
the southwest and is characterized by mo
ostly simple
e structure w
with few faults, Figure X-3.
Further to
t the south
h, the struc
cturally comp
plex Carpatthian region
n also conta
ains multiple
e rich
marine source rocks. These inc
clude the 500-m thick Ju
urassic Kokh
hanivka Form
mation with up to
C, the 200-m
12% TOC m thick L. Crretaceous Spas and Shyypot formations with 2-7
7% TOC, an
nd the
Oligo-Mio er Menilite Formation witth up to 20%
ocene Lowe % TOC. How
wever, the C
Carpathian re
egion
is intense
ely faulted with
w complex
x nappe tecto e X-4,6,7 and was not asssessed.
onics, Figure
June, 2013 X-6

X
X. Eastern Europe
Figuree X-2: Carpath

hian Foreland Basin Showinng Shale-Prosspective Areass.
Source: ARI 2013
Figuree X-3: Cross-S

Section of Lvivv Slope Portio
on of the Carppathian Foreland Basin in W
Western Ukrainne
Source:
S Sachsennhofer et al., 20112
June, 2013 X-7

X
X. Eastern Europe
Figure X-4: Cross-Seection of a Nap

ppe Structuree in the Carpatthian Thrust B
Belt
Source: Koltun et al., 1998
The
T Silurian is the main petroleum source
s rock and shale g
gas exploration targets in the
Carpathia
an Foreland
d Basin, Figu
ure X-5. Co
ompared with he reservoir characteristics of
h Poland, th
n western Ukraine are less certain.. About 400 to 1,000 m of deep-w
the Silurian shale in water
Silurian shale
s is pre
esent, transiitioning easttward into t hinner, shalllow-water ccarbonates. The
Ludlow member
m of th
he Silurian is
s considered
d the most p
prospective interval. Th
he Ludlow ra
anges
from 400
0 to 600 m th
hick and occurs at depths of 2 to 3 kkm in western Ukraine.
Silurian
S shale
e TOC may be lower in Ukraine than
n in Poland,, at least bassed on the ssingle
well data
a point availa
able (IS-1). Most TOC measuremen
m nts at a depth range of 1,400 to 1,5
592 m
in this we
ell were less
s than 1%. However, th
he original T
TOC is estim
mated at 3%
% prior to the
ermal
alteration
n. Given th
he depositio
onal environmental of th
he Silurian, it is likely that higher TOC
exists in
n places. Thermal
T ma
aturity mapp
ping, calcul ated from conodant a
alternation in
ndex,
indicates
s the Silurian
n is entirely in the dry gas window ((Ro of 1.3% to 3.5%). S
Several (posssibly
spurious) over-mature values off 5% Ro als
so were mea
asured. Ma
aturation is believed to have
occurred prior to the
t Mesozo
oic. As Sac n (2012) noted: “addittional
chsenhofer and Koltun
investiga
ations are needed to in
nvestigate la
ateral and vvertical varia
ations of TO
OC contentss and
refine the
e maturity pa
atterns in Lo
ower Paleozo
oic rocks.”
June, 2013 X-8

X
X. Eastern Europe
Figure X-5: Stratigraphy of Carpatthian Forelandd Basin Show ing Thick Blacck Shales of S
Silurian and M
Mid-
Juraassic-Age (leftt). L. Cretaceo
ous and Paleo
ogene Sourcee Rocks Occurr in the Carpatthians (right).
Source: Sacchsenhofer et al., 2012
The
T Kovel-1 petroleum well
w is a ke
ey stratigrap hic test drillled during the late 198
80s in
western Volynia, northwestern Ukraine.
U Th
he well is lo g the transittion between the
ocated along
structurally complex Lublin-Lviv basins on th
he west and the less de
eformed Volyynia region o
of the
T Kovel-1 well cored Ordovician at a depth o
Slope. The of about 250
0 m; Silurian
n apparentlyy had
been ero
oded in this uplifted
u locattion.8
1.2 Reservoir
R Properties
Based
B on ge
eologic contrrol from reg
gional cross--sections, th
he total estim
mated shale
e gas
prospective area in the
t Carpathian Foreland
d Basin is esstimated to b
be approxim 0 mi2,
mately 16,080
of which 11,520 mi2 is in Ukraine and 4,560
0 mi2 in Rom
mania. The target organ
nic-rich portiion of
the 500-m
m thick Ludllow Memberr of the Silurrian is estim ated to averrage 1,000 fft thick grosss and
10,000 ftt deep within
n the prospe
ective region
n, and have 4% porosityy. TOC averrages a rela
atively
June, 2013 X-9

X
X. Eastern Europe
low 2.0%
% and is in th
he dry gas window
w (Ro average 2.5%
%). The presssure gradie
ent is assum
med to
be hydrostatic (0.43 psi/ft).
1.3 Resource
R Assessmen
A nt
Risked,
R techn
nically recov
verable reso
ources from
m Silurian bla
ack shale in
n the Carpa
athian
Foreland
d Basin are estimated
e to
o be 73 Tcf (52
( Tcf in U omania), out of a
Ukraine and 21 Tcf in Ro
risked sh
hale gas in--place of 36
63 Tcf, Table X-1. The
e play has a moderate
ely high reso
ource
concentrration of abo mi2, reflectin
out 113 Bcf/m ng the signifficant thickne
ess of the o
organic-rich sshale
that is prresent.
Ukraine’s
U Sta
ate Commiss
sion on Mine
eral Resourcces has estiimated that the Oleska sshale
gas licen
nse area in the
t Lviv-Voly
yn Basin ha on m3 (28 to
as about 0.8 to 1.5 trillio o 53 Tcf) of sshale
gas reso
ources. Wh
hether this estimate re
eflects in-pla
ace or reco
overable ressources wass not
specified
d.
An
A independe
ent assessm
ment of Silurrian shale ga manian portion of
as resourcess in the Rom
the Carpathian Forelland Basin arrived
a at a Mean
M Estima
ate of 5.6 Tccf technicallyy recoverablle out
of 279 Tcf
T of gas in-place. This
T estimate utilized EIA/ARI’s 2
2011 metho
odology, butt key
assumptions (thickne y, risk) were not specifie
ess, porosity Ukraine evalluated.9
ed, nor was U
1.4 Recent
R Activity
Chevron
C repo
ortedly is in negotiations
n s with the go
overnment to
o develop a sshale gas prroject
in the Oleska block of western Ukraine. The
T governm
ment recenttly removed its self-imp
posed
13 for comp
deadline of May 201 pleting this deal.
d Chevrron also inittially acquire 7-km2
ed the 6,257
hale gas permit in north
Barlad sh heastern Rom
mania close
e to Moldova
a, but the sta
atus of this block
is unclea
ar following the shale ban
n in Romania.
In
n 2012 ENI acquired ha
alf of LLC WestGasInve
W est, which ccontrols nine
e unconventtional
gas licen g 3,800-km2 in the Lviv Basin of we
nses totaling estern Ukrain
ne, which m
may include sshale
gas pote
ential. The company
c and its partnerrs, including
g UK-based Cadogan Pe
etroleum, plan to
bout $55 million explorin
spend ab ng for shale gas
g in the Lvviv basin from 2012 thro
ough 2015.
June, 2013 X--10

X. Eastern Europe
2. DNIEPR-DO
D ONETS BAS
SIN (EAST
T UKRAINE
E)
2.1 In
ntroduction
The Dniepr-Done
D ets Basin (D
DDB) in easttern Ukraine
e is a Mid-tto Late-Devo
onian
failed riftt basin on the Eastern
n European Craton, Fig
gure X-6. The basin contains a thick
sequence
e of Lowerr Carboniferrous black shale
s which
h may be p
prospective for oil and
d gas
developm
ment. Econ
nomically im
mportant Ca
arboniferous coal depossits and tig
ght sands o
of the
Moscovia hese shales,,10 but this co
an overlie th oaly sequen
nce does not appear to be a prospe
ective
shale tarrget.
The
T DDB accounts
a or most of Ukraine’s onshore p
fo petroleum rreserves an
nd is
comparatively well understood, with
w several thousand o
oil and gas w
wells, some o
of which rea
ached
depths of
o over 5 km
m. Lower Ca
arboniferous
s black shale
es and coal seams are the main so
ource
rocks, while overlyin
ng clastic Ca s sandstoness provide co
arboniferous onventional reservoirs w
within
mainly sttructural trap
ps. To the northwest
n the
e DDB conti nues into the Pripyat Trrough of southern
Belarus, which appe
ears to be too shallow and low in
n TOC for sshale develo
opment. To
o the
southeas
st the basin continues
c into the Donbas Foldbelt of southwesstern Russia.
Roughly
R mmetrical, the DDB is about
sym a 700 kkm long, 40 to 70 km w
wide, and trrends
st-southeast.11 It comprises a series of half g
northwes grabens bou
unded by larrge-displace
ement
faults (h=
= 100 m to 2 km). The
e individual blocks
b quite sizeable (50-100 kkm by 20-40 km),
are q
although numerous smaller
s faultts are locally
y present. T
The basin co
ontains as m
much as 15 kkm of
n and youn
Devonian nger sedime
entary rocks
s, which inccludes 1 to 2 km of m
mostly Devo
onian
(Frasnian
n) salt depos
sited under restricted
r rift
ft conditions.. Figure X-7
7 is a structu
ural cross-se
ection
showing depth to the ws in the bassin.12
e L. Carbonifferous (L. Visian) black sshale as well as salt flow
L. Carboniferrous black shale

s es the Devo nian salt intterval. This black shale
overlie e and
the overlying coal se
eams source
ed most of th
he conventio
onal oil and gas fields in
n the basin. The
arboniferous section ranges up to 11
entire Ca 1 km thick in
n the DDB a
and is up to 15 km deep near
its base along the basin axis. In the no
orthwest porrtion of the
e DDB the Carboniferous is
continenttal in origin, but transitio
ons into partly shallow m
marine depossitional cycle
es, each of w
which
is typically 50 m thick
k and contains an organ
nic-rich shallo
ow marine sshale layer.
June, 2013 X--11

X. Eastern Europe
Fig
gure X-6: Dnieepr-Donets Baasin Showing Shale-Prospeective Areas
Source: ARI, 2013
Figure X-7: Cross-Secction of Dneiprr-Donets Basin Showing Deepth to the L. Carboniferouss (L. Visian) B
Black
Shale
Source: Stoovba et al., 1996
June, 2013 X--12

X. Eastern Europe
Several
S black
k shale targe Carboniferous sequence, Figure 8.13 The
ets occur witthin the L. C
Upper Visean Rudov
v Beds are considered the best qu
uality source
e rock and sshale gas ta
arget.
These black shales are up to 70 m thick, but more typically 30-40 m, and particularlyy well
develope
ed in the Sre
ebnen and Zhdanivske
Z depressions
d s where theyy are quite d
deep and dryy gas
prone. The
T Rudov Beds
B are rich
h in siliceous
s radiolaria, making them
m potentiallyy brittle, whille the
lower part of the form
mation is hig
gh in calcite as well as cclay. The o
organic-rich m
middle sectiion of
ov Beds has 3.0% to 10.7%
the Rudo 1 TOC (average 5
5%), mostly Type III wiith some Tyype II
kerogen. Additionall slightly lea
aner (TOC of
o 3.0% to 3
3.5%) but sstill quite pro
ospective so
ource
cur in the Up
rocks occ pper Visean above the Rudov
R Bedss, while the llower Serpukhovian con
ntains
ales with up to 5% TOC.
black sha
Figure X-8: Stratigraphy of Dnieprr-Donets Basin

n. Black shalees Occur in L. Carboniferouus Rudov andd U.
Visean.
Source: moddified from Sachhsenhofer et al., 2010
Thermal
T matu
urity of the Rudov
R Beds
s and the ovverlying Upper Visean iss mainly in th
he oil
window (R
( o 0.8-1.0%
%) in the cen orthwestern DDB, increa
ntral and no asing to dry gas maturitty (Ro
1.3-3.0%
%) in the southeast. For example, th
he Rud-2 pe
etroleum welll in the Dnie
epr-Donets B
Basin
penetrate
ed a nearly 1-km thick Carboniferou
C us Upper Viisean shale interval at a depth of 4 to 5
km, Figu
ure X-9. TO
OC of up to 4% in this in
nterval is wiithin the oil thermal matturity window
w (Ro
0.8-1.0%
%). The oil window
w in th
his basin ap
ppears to be
e normally to
o under-presssured, while the
June, 2013 X--13

X. Eastern Europe
dry gas window

w is lik
kely to be ov
ver-pressured due to ong
going gas ge
eneration, a
although presssure
data control is poor.14
Figure X-9:
X Rud-2 Welll in the Dniepr-Donets Basiin, Showing thhe Carboniferrous Upper Vissean Shale (C
C1v2)
with TOC
C up to 4% in the
t Oil Window w (Ro 0.8 to 1.0%).
Source: Sacchsenhofer et al., 2012
The
T southwest flank of th onets Basin is characterized by a structurally simple
he Dneipr-Do
dip slope
e, where thick L. Carbo
oniferous bla owards the basin
ack shale tiltts gently to the NNE to
axis. The L. Carbon
niferous is att ideal depth
h for shale d
development (1-5 km) o
over a broad
d belt.
The northeast flank of the DDB has thinnerr L. Carbonifferous that iis structurally more com
mplex.
Lacking a detailed de
epth map on
n the Carbon
niferous, we
e constrained
d the depth--prospective area
using ba
asement con
ntours and multiple
m pub od control on the
blished crosss-sections, yyielding goo
prospective area. Note
N that sa
alt intrusions up to 15 km thick m
may negative
ely impact sshale
potential along variou
us parts of th
he slope.
2.2 Reservoir
R Properties
Lower Carb
boniferous black shale
es (Rudov Beds, Lo
ower Visea
an, and L
Lower
2
Serpukho
ovian) are prospective within
w a 10,1
150-mi deptth-controlled
d belt that su
urrounds the
e axis
of the Dn
neipr-Donets
s Basin. The
ese shales are
a estimated
d to total about 1 km in tthickness bu
ut are
relatively
y deep (3-5 km). They
y largely co
onsist of siliiceous or ccalcareous liithologies rich in
June, 2013 X--14

X. Eastern Europe
radiolaria
an and thus are expecte
ed to be britttle with high porosity (6%
%). Gas reccovery ratess also
should be favorable (30%) due to
t the inferre
ed frackabilitty of the sha
ale. TOC ap
ppears favorrable,
%. Thermall maturity ra
averaging about 4.5% anges from o
oil to dry gass. On the negative side
e, salt
s may sterilize some of the
intrusions t mapped prospective
e area (10%).
2.3 Resource
R Assessmen
A nt
Dry
D Gas Wiindow. The
e mapped prospective
p he dry shale
area for th e gas windo
ow in
southeas
stern Dnieprr-Donets Ba mated at 6 ,010 mi2.
asin is estim Lower Carb
boniferous sshale
(comprising the Rudo
ov Beds and
d portions off the overlyin
ng Upper Viisean) has a highly favo
orable
resource
e concentration of approx 5 Bcf/mi2. R
ximately 195 Risked, techn
nically recovverable shale
e gas
resource
es are estima
ated to be 59
9 Tcf, out of a risked sha
ale gas in-place of 235 T
Tcf.
Wet
W Gas Win
ndow. The wet gas pro
ospective are
ea of the DD
DB extends over about 2
2,680
2
mi . Ris
sked, technic
cally recove
erable resources are esstimated at 1
16 Tcf of sh
hale gas and 0.5
billion ba
arrels of con
ndensate from in-place shale
s gas a nd shale oil resources o nd 10
of 63 Tcf an
billion ba
arrels.
O Window. The smalle

Oil er oil window
w in the nortthwestern Dniepr-Donetts Basin covvers a
prospective area of about
a 1,460 mi2. Risked
d technicallyy recoverable
e resources are estimatted to
be aboutt 0.7 billion barrels
b of sha
ale oil and condensate
c a
and 1 Tcf off associated shale gas, o
out of
risked in--place shale
e oil resource
es of 13 billio
on barrels.
Ukraine’s
U Sta
ate Commis
ssion on Min
neral Resou
urces has e
estimated that the Yuzo
ovska
shale gas
s license in the
t eastern Dniepr-Done as 2-3 Tm3 (71-107 Tcf) of shale gass and
ets Basin ha
tight gas resources. Whether th
his estimate
e reflects in- place or reccoverable re
esources wa
as not
specified
d.
2.4 Recent
R Activity
In
n early 2013
3 Shell was awarded
a Ukrraine’s first fformal shale
e gas exploration license
e, the
m2 Yuzovska
7,800-km a PSA locate
ed on the so
outh flank off the Dnieprr-Donets Basin. Shell’ss first-
stage inv
vestment commitment is
s $200 millio
on. Previoussly in 2011, ENI acquire
ed from Cad
dogan
Petroleum
m portions of
o the Zagory
yanska and Pokroskoe conventiona
al licenses in
n the DDB, w
which
may inclu
ude shale po
otential.
June, 2013 X--15

X. Eastern Europe
3. MOESIAN
M PLATFORM
P M (ROMANIA, BULGA
ARIA)

ntroduction
The
T Moesian
n Platform is a compa
aratively sim
mple (for E
Europe) fore
eland basin that
stretches
s across sou orth-central Bulgaria, Fiigure X-10. The Platform is
uthern Romania and no
overthrus
sted by the Balkan
B thrus
st system to the south, w arpathian thrust system fforms
while the Ca
the north
hern boundary; both are Cenozoic fe
eatures relatted to Alpine
e tectonics. To the easst, the
Moesian Platform is Foreland Bassin and on the north by the
s separated from the Carpathian F
obrogea Oro
North Do ogen. The adjacent Getic
G Basin of Romania
a, the forela
and of the S
South
Carpathia
ans, contain
ns similar source rocks but
b is more d
deformed byy Tertiary tecctonic eventss and
considere
ed less pros
spective.
Figurre X-10: Moesian Platform Region

R Showinng Shale-Prosspective Areass.
Source: ARI 2013
June, 2013 X--16

X. Eastern Europe
Up
U to 12 km
m of mostly flat-lying,
f ca
arbonate-rich
h Paleozoicc and Mesozzoic sedime
entary
rocks are
e present on
n the Moesia
an Platform, Figure X-11 . The relativvely few con
nventional oil and
gas fields that have been discov
vered in this
s region pro
oduce mainlyy from mid-T
Triassic dolo
omite
and occa
asionally from assic sandsttone. 15,16
m basal Jura
The
T Moesian
n Platform contains multiple
m orga
anic-rich so
ource rock shales thatt are
prospective for shale
e gas development, Fig
gure X-12. These inclu
ude the Ordovician to U
Upper
erous Tanda
Carbonife arei, Vlasin, and Calaras
si formationss, including Silurian sha
ales; the Jurrassic
Etropole Shale; the Bathonian (Dogger)
( shales (Bals F
Formation); and Mid-Mio
ocene marlss and
Badenian to
shales (B o Sarmatian)). The main
n targets fo r shale gas exploration
n are the Sillurian
shale and
d Jurassic Etropole
E Sha
ale.
The
T Silurian shale in the
e Moesian Platform
P is b roadly simila
ar to that ta
argeted in Po
oland
and the Carpathian Foreland Basin
B further to the norrth. Region
nal cross-se
ections show
w the
Silurian ranges
r from 2 to over 5 km deep across
a the M
Moesian Plattform. At th
he South Cra
aiova
Block in southwest Romania, th
he Silurian Llandovery
L Shale is at least 160 m thick, 4,050 to
4,200 m deep, and has about 3% TOC, Figures
F 3 and X-14..17 At the B
X-13 Bulgarian Arrch in
eastern Bulgaria,
B thic
ck (650-m), organic-rich Silurian sha
ales reported
dly are at prrospective de
epths
a were not sufficient to map
of 1 to 5 km, but data m this port
rtion of the p
play.
The
T other ma
ain target in the
t Moesian
n Platform is the Jurassicc Etropole S
Shale, consid
dered
the main petroleum source
s rock in northwes
st Bulgaria, F
Figure X-15. In particula
ar its organicc-rich
lower portion, the Sttefanetz Member, conta
ains thick, ca
arbonate-ricch (40-50%) black shale
e with
interbeds
s of marl an
nd limestone
e that was deposited in a marine environment, not dissimilar to
the Uppe
er Jurassic Haynesville
H Shale.
S 18 TO om 1.0% to 4.6%,19 with
OC ranges fro h Type II kerrogen
nating.20 The
predomin e Etropole Shale
S generrally ranges from 2.5 to ep21 and is over-
o >5 km dee
pressure
ed in much of
o the regio
on, with an elevated
e pre
essure grad
dient of 0.78
8 psi/ft. The
ermal
maturity falls in the oil
o window in
n the north, increasing tto wet and d
dry gas in th
he south nea
ar the
5%).22
hrust belt (Ro 1.0% to 1.5
Balkan th
Oil
O and gas has
h been prroduced from
m conventio nal silty, san
ndy, and ca
arbonate inte
ervals
within the
e Etropole Formation,
F su
uch as the Peshtene
P h reportedly flowed gas at an
R--5 well which
ated rate of 530,000 ft3/d.
unstimula / In additio
on, oil produ
uced from th
he Jurassic D
Dolni Lukoviit and
Mid-Trias
ssic Dolni Da
abnik fields has been ch
hemically linkked back to the Etropole
e Shale.
June, 2013 X--17

X. Eastern Europe
Figurre X-11: Regional Cross-Secctions in of the Moesian Plaatform In Rommania Showingg Jurassic and
Paleozoic Shale at Mostly
M Moderaate Depth withh Relatively Simple Structure.
Source: Veliciu and Popesccu, 2012
ure X-12: Strattigraphic Colu

Figu umn Showing L. Silurian Llaandovery Shales in Southw
west Romania.
Sourcce: Sterling Resoources, 2013
June, 2013 X--18

X. Eastern Europe
Figure X-13: Well Logs Showing Paleozoic

P Secttion Includingg L. Silurian Lllandovery Shaales at the Souuth
Craio
ova Block (EIII-7) in Southwwest Romania..
Source: Steerling Resources, 2013
Figure X-14: SW-NE Trending Seissmic Line Sho owing Paleozooic Section Inccluding L. Siluurian Llandoveery
Shales at the South Craiova
C Blockk in Southwesst Romania. S
Structure is Reelatively Simple But Faults aare
Present.
Souurce: Sterling Reesources, 2013
June, 2013 X--19

X. Eastern Europe
Fig
gure X-15: Well log across the
t Jurassic E
Etropole Shalee in Bulgaria
Source: TraansAtlantic Petrooleum Ltd, Februuary 2011
At
A the Sud Craiova license in southwest Romania, operated b
by Sterling and
TransAtla
antic, the Ettropole Shale ranges from 115 to o
over 700 m thick and 3
3,700 to 4,500 m
deep acrross the blo
ock, Figure X-16.
X At th
he Lovech b
block in nortthwest Bulga
aria the Etro
opole
Shale is about 3,800
0 m deep, Figure X-17. Structure is fairly simple
e in this regiion, with flat lying
dips cut by
b several fa
aults. Otherr portions of the Moesian
n Platform la
acking data ccontrol also were
assumed
d to have rela
atively simila
ar structure.
The
T eastern continuation
n of the Jurrassic Etrop
pole Shale is unclear a
and could no
ot be
rigorously mapped. Two time--structure trransects sug
ggest the E
Etropole ma
ay be prese
ent in
eastern onshore
o Bulg
garia at two--way seismic times of 0 .5 to 3.0 secconds, deep
pening to the
e east
into the Black
B Sea, Figure
F X-18. The Centra
al Dobrogea
a Green Sch
hist Zone, co
omprising up
plifted
blocks off Proterozoic
c basement blocks north
h of the Pala
azu Fault, has only a th
hin or no Jurrassic
sequence
e. On the other hand, the North Bu
ulgarian Arch
h -- where C
Chevron initia
ally was awa
arded
a shale gas ary sequencces.23
g license – holds preserved Jurassic to Tertia ry sedimenta
June, 2013 X--20

X. Eastern Europe
Figure X-16:
X Regionaal Seismic Secction Showing
g Jurassic andd L. Silurian Llandovery Shaales at the Soouth
Craiovva Block in Southwest Romaania. The Stru
uctural Dip is Relatively Geentle but Numeerous Faults aare
Present.
Source: Steerling Resources, 2013
Figu
ure X-17: Jurasssic Etropole Shale is abou
ut 3,800 m Deeep with 1.0% tto 1.3% Ro at TransAtlanticc
Petroleeum’s Lovech Block in Nortthwest Bulgarria.
Source: TraansAtlantic Petrooleum, 2011
June, 2013 X--21

X. Eastern Europe
Figure X-18:
X Regional Cross-Sectio
on Showing Thhick Jurassic Lias and Dogger Shale Depposits in Northhern
Bulgaria Which
W Thin Markedly to the N
North into Romania.
Source: Tarri et al., 2011
3.2 Reservoir
R Properties
L.
L Silurian Shale.
S The mapped
m spective are a for black sshales in the
pros e L. Silurian ttotals
1,600 mii2, all of which is locate
ed in Roman
nia. No pro spective are
ea was iden
ntified in Bullgaria
due to da
ata limitation
ns, although there could be prospecctive Silurian
n areas in no
ortheast Bulg
garia.
Depth ra
anges from 2 to 5 km. Organic-rich
O h thickness a
averages ab
bout 600 ft ((gross). The
ermal
maturity ranges from
m wet to dry gas.
g TOC is
s estimated a
at 3%, porossity at aboutt 4%.
Jurassic
J Etrropole Sha
ale. Black shales in the Mid-Ju
urassic Etro
opole Shale
e are
n estimated 7,940-mi2 area
prospective within an a of the M
Moesian Pla
atform, in no
orthwest Bullgaria
and soutthwest Roma
ania. The most
m about 250 m thick
organic-rich shales are estimatted to total a
(gross) at
a moderate depth of abo
out 10,000 ft. erately high (5%).
f Porosity is assumed to be mode
Gas reco
overy rates also
a could be
e favorable based on th e inferred brittle litholog
gy. TOC app
pears
moderate
e, averaging
g about 3% in the more prospective
e intervals. Thermal ma
aturity is we
et gas
(Ro 1.0%
% to 1.3%). The
T pressure
e gradient is
s estimated a
at 0.7 psi/ft.
3.3 Resource
R Assessmen
A nt
Risked,
R technically reco
overable sha
ale resource
es in the M
Moesian Pla
atform regio
on of
Romania
a and Bulgarria are estim
mated to be 47 Tcf of sh
hale gas an
nd 0.5 billion
n barrels of sshale
condensa
ate, out of a risked sha
ale gas and shale oil in--place of 19
96 Tcf and 1
10 billion ba
arrels,
respectiv
vely. Romania’s share is approximately 30 Tcff and 0.3 biillion barrelss while Bulga
aria’s
share is estimated
e att 16 Tcf and 0.2 billion barrels.
b
June, 2013 X--22

X. Eastern Europe
Silurian
S Llan
ndovery Sha
ale. Risked, technically recoverable
e shale gas resources in
n the
Silurian shale
s of the Moesian Pla
atform of Romania and B
Bulgaria are estimated tto be 10 Tcf,, out
of a riske
ed shale gas
s in-place of 48 Tcf.
Jurassic
J Etrropole Sha
ale. Risked, technica lly recovera
able shale resource in
n the
Jurassic Etropole Sh he Moesian Platform of Romania and Bulgaria are estimatted to
hale within th
cf out of a ris
be 37 Tc sked shale gas in-place of
o 148 Tcf, w
while shale o
oil/condensa
ate resource
es are
estimated
d at 0.4 billio
on barrels off condensate
e out of 7.9 b
billion barrells of risked o
oil in-place.
Separately,
S in
n northeaste
ern Bulgaria, the govern estimated the 4,400-mi2 Novi
nment has e
ock has 0.3 to 1.0 Tm3 (11 to 35 Tcf) of shale gas resourcce potential in the Devo
Pazar blo onian-
Silurian silty
s shale. The
T Devonia
an-Silurian was
w reported
d in the stud
dy to be up to
o 2 km thickk, 800
to 2,800 m deep, an
nd have 3.5%
% sapropelic
c organic ma
atter with TA o 5.24 Howevver, it
AI from 2 to
was not possible
p to map
m this play
y due to lack
k of data.
A the 1,500--mi2 Sud Cra

At aiova license
e in southwe
est Romania
a, Sterling a
and TransAttlantic
have es
stimated tha
at the Silurrian shale has gross recoverable
e prospectivve resource
es of
approxim
mately 3 Tc
cf (Best Es
stimate). Inc
cluding the Jurassic E
Etropole, TransAtlanticc has
estimated
d its blocks
s hold a to T 3 (11 Tccf) of unriskked, recove
otal of 0.3 Tm erable shale
e gas
prospective resource
es (gross; Be e).25
est Estimate
In
ndependent researchers
s in Roman
nia recentlyy estimated the techniccally recove
erable
resource
es in the Silu
urian shale of
o the southe
ern Romania an Platform to be
an portion off the Moesia
26 Tcf, out
o of 1,295 Tcf
T of OGIP (Mean Estim
mate). The Jurassic wa
as not assesssed, nor wa
as the
Silurian potential
p in Bulgaria.
B 26
3.4 Recent
R Activity
Several
S comp
panies have
e pursued sh
hale gas lea
asing in Bulg
garia but only one shale
e test
well has been drilled. In June 20
011, Chevro
on received a 5-year sha
ale gas explo
oration perm
mit for
0-km2 Novi Pazar block of northea
the 4,400 astern Bulga
aria. Howe
ever, since tthe shale ba
an of
January 2012 Chev
vron can on
nly pursue conventional
c l targets in the block w
without hydraulic
fracturing
g.
June, 2013 X--23

X. Eastern Europe
US-based
U TrransAtlantic Petroleum, through itss subsidiaryy Direct Pettroleum Bulg
garia,
holds a shale
s gas exploration
e liicense at the 2,300-km2 Lovech blo
ock, located
d in the sou
uthern
Moesian Platform no
orth of the Balkan
B forelands in norrthwest Bulg
garia. TranssAtlantic reccently
2
o awarded the adjacent 648-km
was also 6 Koy
ynare block.
In
n Novemberr 2011 Tran
nsAtlantic an
nd Canada--based partner LNG Energy drilled
d the
3,190-m deep Golja
amo Peshten
ne R-11 exp
ploration we
ell at Lovech to core a
and test the Mid-
Jurassic Etropole Sh
hale. The R-11
R well wa
as drilled in
n 56 days an
nd cost $7.5
5 million. Itt was
located near
n the Pes
shtene R-5 well,
w which had 530,000 ft3/d
h flowed 5 d from a conventional intterval
in the Ju
urassic Etrop
pole. The R-11
R well pe
enetrated 35
54 m of Etro
opole argillite with nume
erous
gas show
ws (C1-C3) and cored 289
2 m of th nd Ozirovo fformations. LNG
he Jurassic Etropole an
described
d rock prope
erties as sim
milar to thos
se of producctive US sha
ale plays. T
The well wa
as not
fracture stimulated as
a Bulgaria has a ban in place. T
TransAtlantic plans to ttest the Etro
opole
Shale els
sewhere on the Lovech block where
e it is about 3 ep.27
3,800-m dee
Canada’s
C Pa
ark Place Energy received an exp
ploration permit in nortthwest Bulga
aria’s
Dobruja province (blocks Vranin
no 1 to 11). In June 20 11 Chevron
n won a tend
der to explorre for
shale ga
as at the No
ovi Pazar fie
eld, also loc
cated in Do was cancelled in
obruja, but tthe permit w
January 2012 when
n the shale
e gas ban came
c into effect. Bullgaria’s statte gas com
mpany
Bulgarga
az has not disclosed any
y shale-relate
ed activity.
REFERE
ENCES
1 Rudko, G.. and Lovyniukov, V.I., 2013. “S

State Classificattion of Mineral R
Resources and Reserves of Ukraine as an Evaaluation
Instrumennt of Investmentt Proposals on Energy Resources.” Black S Sea and Caspiaan Sea Energy Conference, LLondon,
February 14, 32 p.
2 Shale Gas Research Grooup, 2011. “Hyydrocarbon Poteential and Prosppects of NE Buulgaria and Offsshore Black Seaa – An
Overview..” Sofia, Bulgaria, 26 January, 41
4 p.
3 Daborowski, T. and Groszzkowski, J., 20122. “Shale Gas inn Bulgaria, the C
Czech Republic and Romania: P
Political Contextt, Legal
Status, annd Outlook.” Centre for Eastern Studies, Warsaww, Poland, 30 p..
4 Seghedi, A., 2012. “Palaaeozoic Formattions from Dobroogea and Pre-D
Dobrogea – An Overview.” Tuurkish Journal of Earth
Sciences, vol. 21, p. 669-721.
5 Sachsenhoofer, R.F. and Koltun,
K Y.V., 2012. “Black Shalees in Ukraine – A Review.” Mariine and Petroleuum Geology, vol. 31, p.
125-136.
6 Koltun, Y.,, Espitalie, J., Kootarba, M., Roure, F., Ellouz, N., and Kosakowsski, P., 1998. “P
Petroleum Geneeration in the Ukkrainian
External Carpathians
C and the Adjacent Fooreland.” Journaal of Petroleum G
Geology, vol. 21, p. 265-288.
7 Ionescu, L., Ionescu, B., Marinescu, D.,
D Nedelcu, M.I., Balint, I., Livvanov, O., Pom marjanschi, D., aand Pomarjanschi, O.
“Hydrocarrbons Prospectinng Using Integraated Geophysicaal Methods (Maggnetotelluric Souundings, Gravityy and Magnetics) in the
June, 2013 X--24

X. Eastern Europe
External Flysch
F Zone (Eastern Carpathiians, Northern Moldavia).”
M AA
APG Search and Discovery Artticle 90109 (Abbstract),
American Association of Petroleum
P Geoloogists, Europeann Region Annuall Conference, Kiiev, Ukraine, Occtober 17-19.
8 Saadre, T., Einasto, R., Nolvak, J., and Sttouge, S., 2004. “Ordovician Sttratigraphy of thee Kovel-1 Well ((Volkhov-Haljala) in the
Volynia Region, Northwesstern Ukraine.” Bulletin
B of the Geological Societty of Denmark, vvol. 51, p. 47-69..
9 Veliciu, S.. and Popescu, B., 2012. “Are the Paleozoic Plays
P the Futuree of Unconventiional Gas in Roomania? An Atteempt of
Assessingg the Resource.”” Petroleum Club, 26 p.
10 Izart, A., Briand,
B C., Vasleet, D., Vachard, D., Coquel, R., and Maslo, A., 11996. “Stratigraaphy and Sequence Stratigraphyy of the
Moscovian in the Donets Basin.” Tectonoophysics, vol. 2668, p. 189-209.
11 Stephensson, R.A. et al., 1993. “Contineental Rift Develoopment in Precaambrian and Phanerozoic Europpe: EUROPROB
BE and
the Dnieper-Donets Rift and Polish Trough Basins.” Sedimentary Geologgy, vol. 86, p. 1559-175.
12 Stovba, S.,
S Stephenson, R.A., and Kivshik, M., 1996. “S Structural Featurees and Evolutionn of the Dniepr-D
Donets Basin, U
Ukraine,
from Regional Seismic Reeflection Profiless.” Tectonophysics, vol. 268, p. 127-147.
13 Sachsenhhofer, R.F., Shymanovskyy, V.A A., Bechtel, A., Gratzer,
G Reischenbacher, D., 2010. “Paleozoic
R., Horrsfield, B., and R
Source Roocks in the Dniepr-Donets Basinn, Ukraine.” Petrroleum Geosciennce, vol. 16, p. 3377-399.
14 Law, B.E., Ulmishek, G.F F., Clayton, J.L.,, Kabyshev, B.P
P., Pashova, N.TT., and Krivosheeya, V.A., 1998. “Basin-Centereed Gas
Evaluatedd in Dnieper-Donnets Basin, Donbbas Foldbelt, Ukraine.” Oil and G
Gas Journal, Noovember.
15 Barbuliceeanu, N., Oterdoom, H., and Tulucan,
T A., 20110. “Identificatiion of Petroleum
m Systems in a Complex Geoological
Frameworrk, Moesian Plaatform and the Getic Basin, Romania.”
R AAP PG Search andd Discovery Artticle 90109 (Abbstract),
P Geoloogists, Europeann Region Annuall Conference, Kiiev, Ukraine, Occtober 17-19.
16 Tari, G., Ciudin, D., Kosstner, A., Raileaanu, A., Tulucann, A., Vacaresccu, G., and Vanngelov, D., 20111. “Play Types of the
Moesian Platform
P of Rommania and Bulgaaria.” AAPG Seearch and Discoovery Article #10311, Adapted from AAPG European
Region Annnual Conferencce, Kiev, Ukrainee, October 17-199, 2010.
17 Sterling Resources,
R mania – Craiova: UCG Silurian S
20122. “Onshore Rom Shale Gas.” Posster.
18 TransAtlaantic Petroleum Ltd,
L 2011. SEC Form 8-K, February 4, 2011, 266 p.
19 Shale Gas Research Group, 2011.
20 TransAtlaantic Petroleum Ltd,
L 2011. SEC Form 8-K, February 4, 2011, 266 p.
21 Zilinski, R.E.,
R Nelson, D.R R., Ulmishek, G.F., Tonev, K., Vladov,
V J., and E by, D.E., 2010. “Unconventionaal Plays in the E
Etropole
Petroleum m System, Southern Moesian Plate,
P Bulgaria.”” AAPG Searcch and Discoverry Article 901099 (Abstract), Am merican
Associatioon of Petroleum Geologists, Euroopean Region Annual
A Conferen ce, Kiev, Ukrainne, October 17-19.
22 LNG Energy Ltd, Preliminnary Short Form Prospectus, Auggust 29, 2011, 116 p.
23 ms in the Westerrn Black Sea.” TTurkish Journal of Earth Sciencees, vol.
Georgiev, G., 2012. “Geology and Hydroocarbon System
21, p. 7233-754.
24 Shale Gas Research Group, 2011.
25 TransAtlaantic Petroleum Ltd.,
L 2012. Corpporate Presentattion, January, 311 p.
26 Veliciu annd Popescu, 2012.
27 TransAtlaantic Petroleum Ltd.,
L 2011. “A-Lovech License, Bulgaria.” Auguust, 8 p.
June, 2013 X--25

XI. United Kingdom
K EIA/ARI W
World Shale Gass and Shale Oil Resource Assesssment
XI. UNITED
U D KINGD
DOM
SUMMA
ARY
The
T United Kingdom
K ha
as substantia
al volumes of prospecttive shale gas and sha
ale oil
resource
es within Ca
arboniferous-- and Jurassic-age sha
ale formation
ns distribute
ed broadly in the
northern,, central and
d southern portions of the country.
Figure XI-1 : Shale Basins

B in the U
United Kingdoom
Source: ARI 2013.
June, 2013 XI-1

XI. United Kingdom
K EIA/ARI W
The
T risked, te
echnically re
ecoverable shale
s resourrces of the U
U.K. are esttimated at 26 Tcf
of shale gas and 0.7
7 billion barre
els of shale oil and cond
densate in tw
wo assessed
d regions, Ta
ables
XI-1 and XI-2. This is based on
n the much la
arger unriskked estimate
es of 623 Tccf of shale ga
as in-
place (13
34 Tcf, risked) and 54 Bbbl of shale oil in-pl ace (17 billlion barrels, risked). T
These
estimates
s reflect on
nly the higher-TOC po
ortions of tthe Carboniferous and
d Jurassic sshale
intervals..
Table XI-1. Shale Gas Reservoir

R Properties and Reesources of thhe United Kingdom
North UK So outh UK
Basin/Gross Area Carboniferous Shale Region
C Jurassicc Shale Region
Basic Data
2 2
(10,200 mi ) (3,,470 mi )
Shale Formation Carboniferous Sh
hale Lias Shale
Geollogic Age Carboniferous L. Jurassic
Deposition
nal Environment Marine Marine
2
Prospective Area
A (mi ) 5,100 1,735
Physical Extent

Thickness (ft)
Net 410 149
Interval 5,000 - 13,0000 4,000 - 6,000
Depth (ft)
Average 8,500 5,000
Reservoir Presssure Normal N
Normal
Properties
Reservoir

Thermal Maturity (% Ro) 1.30% 0.85%
Clay Content Medium M
Medium
Gas Phase Dry Gas Assoc. Gas
Resource
2
GIP Concentraation (Bcf/mi ) 117.3 14.5
Risked GIP (T
Tcf) 125.6 8.0
Risked Recoveerable (Tcf) 25.1 0.6
Soource: ARI, 2013
Table XI-22. Shale Oil Reservoir

R Prop
perties and Reesources of thhe United Kinggdom
South UK
Basin/Grosss Area Ju
urassic Shale Region
Basic Data
2
(3,470 mi )
Shale Formmation Lias Shale
Geologicc Age L. Jurassic
Depositional En
nvironment Marine
2
Prospective Area (mi
( ) 1,735
Physical Extent
Orgganically Rich 165

Thickness (ft)
Nett 149
Inteerval 4,000 - 6,000
Depth (ft)
Aveerage 5,000
Reservoir Pressuree Normal
Properties
Reservoir
Average TOC (wt. %)

% 3.0%
Thermal Maturity (%
( Ro) 0.85%
Clay Content Medium
Oil Phase Oil
Resource
2
n (MMbbl/mi )
OIP Concentration 30.9
Risked OIP (B bbl)) 17.1
Risked Recoverablle (B bbl) 0.69
Source: ARI,
A 2013
June, 2013 XI-2

XI. United Kingdom
K EIA/ARI W
In
nitial explora
ation drilling has confirme
ed the prese
ence of thickk, gas-bearin
ng shale dep
posits
in the Bowland Sub
b-basin in th
he west portion of the Pennine B
Basin of norrthwest Eng
gland.
Howeverr, production
n testing has
s not yet occ
curred and tthe other shale regions remain undrilled.
EIA/ARI’s
s current es
stimate of the e gas resou rces is abou
e UK’s shale ut 10% higher than our initial
2011 ass
sessment, while
w ale oil potential has bee n added.
new sha
Compared
C with
w North America,
A the
e shale geo
ology of the onsiderably more
e UK is co
complex,, while drilliing and com
mpletion costs for shalle wells are
e substantia
ally higher. The
Pennine Basin, one of the coun
ntry’s most prospective
p a
areas, has b
been tested with five ve
ertical
he Carbonife
wells which cored th erous Bowland Shale. O
Other prospective areass include the
e rest
of the North
N UK Ca
arboniferous
s Shale reg e liquids-ricch Jurassic Shale regio
gion and the on of
southern England in the Wessex
x and Weald basins, Figu
ure XI-1.
Shale
S testing
g is still at an
a early phase in the UK – flow ttesting and horizontal sshale
drilling have
h not even been atttempted. In a temporrary setbackk, the first sshale well tto be
hydraulic
cally stimula
ated triggere
ed a series of minor e
earthquakess related to
o a nearby fault.
Following
g an 18-mon
nth moratoriium, the gov
vernment co
oncluded tha
at the enviro
onmental rissks of
shale ex
xploration are
a small and manage
eable. Sha
ale drilling w
was allowe
ed to resum
me in
Decembe
er 2012, albeit with sttricter monitoring contrrols. Curre
ent shale o
operators include
Cuadrilla
a Resources, IGAS, Dartt Energy, and others.
INTROD
DUCTION
Within
W Europ ed Kingdom stands nexxt after Poland in pursuing its shale
pe, the Unite e gas
and shale oil poten
ntial. Howe
ever, with a small exissting onshorre conventio
onal oil and
d gas
industry, the UK has
s limited domestic serv
vice sector ccapability forr shale explloration. Na
atural
gas prices are high
h (~$9/MMB
Btu) in the UK compa
ared with N
North Americca, but geo
ologic
ns are much
condition h more comp
plex. Faults
s are numerrous, geolog
gic data control is weakk, and
shale we
ells are more
e costly to drill.
d While the UK’s sh
hale resourcce base app
pears substa
antial,
commerc
cial levels off shale produ
uction are ye
et to be esta
ablished.
Political
P oppo
osition to sh
hale develop
pment is gre
eater in the UK than in Poland butt less
than in France
F or Germany.
G Hydraulic
H fracturing got off to an ab
bysmal startt. The UK’ss first
shale pro
oduction tes
st well trigge
ered small lo
ocal earthqu akes during
g fracture stimulation and the
vertical wellbore
w was
s deformed. This is perrhaps unsurp
prising given
n the highly faulted natu
ure of
shale deposits in the
e UK (and ge
enerally in Europe).
E The
e government banned o
onshore hydraulic
g for a period
fracturing d of eighteen
n months to better evalu
uate the riskss.
June, 2013 XI-3

XI. United Kingdom
K EIA/ARI W
In
n January 20
012 the British Geologic
cal Survey n oted that the
e risks of sh
hale develop
pment
to groundwater and earthquake
es had been
n exaggeratted. Minor earthquakes caused by the
Preese Hall-1
H well were
w “comp
parable in size
s to the ffrequent min
nor quakes caused by coal
mining. What's more
e, they originate much deeper
d in th e crust so h
have all but d
dissipated b
by the
time they
y reach the surface.”
s 1 In
n December 2012 the U K governme
ent finally gra
anted condittional
approval for shale exploration,, albeit with
h strict mon
nitoring con
nditions. C
Cuadrilla reccently
delayed its plan to re
esume fractu
ure stimulatio
on until 2014
4 at the earliiest.
Companies
C which
w have been
b granted
d a Petroleu
um Exploration and Development liccense
(PEDL) by
b the UK go
overnment are
a permitted
d to explore and develop shale gas, as well as other
types off petroleum
m resources
s (conventio
onal, coalbe
ed methane
e, tight ga
as, etc.). Field
developm
ment is sub
bject to nec
cessary national and lo nt and planning permisssion.
ocal consen
Currently
y there are about
a 334 onshore
o PED
DLs, of whicch several dozen have rrecognized sshale
potential. Proprietarry shale datta typically are
a kept con
nfidential forr a four-yearr period from
m the
date of well
w completion.
At
A least six oil and gas co
ompanies arre targeting shale gas e
exploration in
n the UK butt only
two have
e actually drilled
d shale
e wells. All
A wells havve been ve
ertical. UK--based Cua
adrilla
Resource
es, partly (4 d by Australian drilling ccompany AJJ Lucas, is the most active,
43%) owned
drilling and coring fo
our shale ex
xploration we
ells in the W
West Bowlan
nd Sub-basiin that confiirmed
the presence of up to 2-km off gas-bearin
ng organic-riich shale. However, a
at least one
e well
ered active faults and high-stress
encounte h conditions. IGAS Energy has drillled a shale
e well
nearby, coring the 1,600-ft
1 thic
ck Bowland Shale. Ho
orizontal sha
ale wells ha
ave not yet been
attempted in the UK
K, nor have flow tests been
b reporte al Oil and Gas Ltd., Celtique
ed. Coasta
Energie, Dart Energy, and Eden
n Energy als
so are evalu
uating their UK shale re
esource pote
ential
but haven’t yet drilled
d.
June, 2013 XI-4

XI. United Kingdom
K EIA/ARI W
GEOLO
OGIC OVER
RVIEW
As
A early as the
t late 198
80s research
hers at Impe
erial College
e, London h
had identified the
main stra
atigraphic targets for sha
ale gas explo
oration in the
e UK, the marine-depossited black shales
of Carbo
oniferous and a 2,3 More
d Jurassic age. e recently in
n 2003, a stu
udy conductted by the B
British
Geologic
cal Survey (BGS) and published
p by
y the UK D
Department o nd Industry (DTI)
of Trade an
presente
ed an integra
ated review
w of the geo ore conventional oil and
ology of Brittain’s onsho d gas
fields an
nd source ro
ock shales, although it was not assked to con
nsider shale as a produ
uctive
reservoirr.4 In 2010 BGS
B publish ale-specific geologic da
hed a compiilation of sha ata collected from
ntional petroleum wells.5
outcrops and conven
BGS
B published its preliminary evalluation of U
UK shale ga
as resource
es later in 2
2010,
conducte
ed on behalff of the Dep
partment of Energy and Climate Ch CC).6 BGS’ initial
hange (DEC
estimate was 5.3 Tc
cf (150 Bcm)) of recovera
able shale g
gas resource
es. BGS, in
n association
n with
DECC, plans
p to relea
ase an upda
ated evaluatiion of shale gas potentia
al of northwest England
d later
in 2013, followed eve
entually by a more comp al estimate.7
plete nationa
The
T main on
nshore sedim
mentary bas
sins in the UK that prroduce oil a
and gas or have
conventio
onal or sha
ale exploratio
on potentiall are shown
n in Figure XI-1. The current EIA
A/ARI
resource
e assessmen
nt groups th
hese numerrous, typica lly fault-bou
unded basin
ns into two main
shale exp
ploration reg
gions:
 North
N UK Ca arboniferouus Shale Re egion. A co omplex asseemblage of issolated strucctural
basins
b and troughs
t is prresent acros
ss northern England and d southern S
Scotland. TThese
contain
c pros
spective orgganic-rich sh
hales of Ca arboniferous age, includding notablyy the
Bowland
B Shale. Withinn the greater Pennine B Basin, indiviidual sub-ba
asins includee the
Bowland,
B Cleveland, Cheshire,
C West
W Lancasshire, Northhumberland, East Midla ands,
Gainsboroug
G gh, Midland Valley, as well
w as othe ers. The Bo owland Sub--basin is thee only
area
a to undeergo shale ex
xploration drrilling to date
e.
 South
S UK Ju urassic Sha ale Region. In southern n England thhe Wessex a and Weald basins
extend
e ore into the English Cha
offsho annel. They contain Jurrassic-age sh hales that arre oil-
prone.
p Whiile no shale e drilling has occurred here yet, tthe region includes Britain’s
la
argest onshoore oil field and
a appears s highly prosspective for sshale oil devvelopment.
June, 2013 XI-5

XI. United Kingdom
K EIA/ARI W
It is importan
nt to note th
hat the UK shale basin
ns generallyy are not siimple contin
nuous
structure
es, such as found
f in many North Am
merica shale
e regions, bu
ut rather typically comprrise a
series off small fault--bounded su
ub-basins. Figure
F XI-2 sshows a reg
gional cross--section from
m the
Wessex Basin in the south to the Bo
owland Sub
b-basin in the north, highlighting
g the
erous-Namu
Carbonife urian and Jurassic shale
e targets. Evven the interrior of the su
ub-basins ma
ay be
significan
ntly faulted, to an extent generally
y not displayyed on sche
ematic crosss-sections. The
structural complexity
y, coupled with
w the relatively small d
data base of onshore pe ells in
etroleum we
the UK (particularly
( in the troug
ghs), makes
s resource a ult. It also could
assessment more difficu
slow the pace of sha
ale exploratio
on, de-risking
g, and comm
mercial deve
elopment in tthe UK.
Figure XI-2 : Regional Cross-Section frrom Wessex B

Basin Throughh Bowland Suub-basin
Highlighting Caarboniferous-N
Namurian andd Jurassic Shaale Targets
Source: Brittish Geological Survey,

S 2012
The
T main strratigraphic targets
t for shale
s explorration in the
e UK are th
he Carbonife
erous
ppian (Lowerr Namurian)8 and the Lo
Mississip ower Jurass ic Lias forma
ations, both of which co
ontain
organic-rrich, marine--deposited shales,
s Figurre XI-3. Oth
her potentiall shale targe
ets include th
he U.
Cambrian and the U. Jurassic Oxford
O and Kimmeridge
K C
Clays, but th
hese were e
excluded from
m our
study du
ue to their low therma
al maturity, lower orga
anic contentt, and/or exxtreme strucctural
complexiity. In partiicular, organ
nic-rich shalles found w
within the Ca
arboniferouss Coal Meassures
were exc
cluded beca
ause these non-marine shales are coaly, high
h in clay, an
nd unlikely tto be
sufficienttly brittle. However,
H fu
urther data collection
c an
nd mapping
g may revea
al these or other
shale forrmations to be
b prospectiv
ve in places.
June, 2013 XI-6

XI. United Kingdom
K EIA/ARI W
Fig
gure XI-3: Straatigraphic Collumn Showing
g UK Formatioons That Conttain Organic-R
Rich Shales.
The Low wer Jurassic Lias
L And Carb boniferous Shaales Appear M
Most Prospecttive.
Source: Smitth et al., 2010
The
T BGS has
s cited the Middle
M Cam
mbrian Conassauga Shale
e in Alabam
ma as the clo
osest
North Am
merican geologic analog
g for Cambrian shale de e UK, given their similar age
eposits in the
and degrree of structural complex
xity. Howev
ver, shale ga
as developm
ment in the C
Conasauga S
Shale
has not been succe
essful to da
ate. The Cambrian-ag
C ge shale de
eposits in th
he UK were
e not
assessed
d in the EIA//ARI study due to their structural
s com
mplexity and
d lack of geo
ologic data.
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XI. United Kingdom
K EIA/ARI W
SEISMIC
C HAZARD
DS
The
T UK shale
e industry experienced
e a serious s etback in 20
011, when tthe first hydraulic
fracturing
g operation of
o a shale well
w unexpec
ctedly genera
ated a serie
es of very sm
mall earthqua
akes.
Howeverr, it is noteworthy that no
one of the approximatel
a y 50,000 ho
orizontal sha
ale wells drillled in
North Am
merica during the past decade
d have
e generated significant e
earthquakess, although a few
suspecte
ed seismic ev
vents are un
nder review.
In a drilled the UK’s first sshale gas exxploration w

n August 2010 Cuadrilla well, spudding the
Preese Hall-1
H vertica
al well in the
e Bowland Sub-basin
S ne
ear Blackpoo
ol, Lancashire. The well was
fracture stimulated during
d early 2011, induc
cing severa l dozen sma akes close to the
all earthqua
e injection zone.
downhole z The timing
t of the
e earthquake
es corresponded with flluid injection
n and
continued
d for severa
al hours afte
er injection ceased.
c Fo he largest earthquakes were
ortunately, th
relatively
y small, measuring magn
nitudes of 2.3 and 1.5 on
n the Richte
er scale. No
o surface dam
mage
was repo
orted. How
wever, the UK
U government shut do
own shale te
esting in the country fo
or 18
months to determine
e the cause of
o the seismic events an
nd to develop
p mitigation rules.
An
A evaluation
n of seismicity from thes
se earthquakkes generatted by the P
Preese Hall-1
1 well
and the fault
f geomettry of the ba
asin indicated
d that move ment was sttrike-slip alo
ong a sub-ve
ertical
fault plan
ne. The suspected fau
ult was locatted on the w
well’s image
e log as we
ell as on dettailed
4.9
seismic, Figure XI-4 Separattely, bedding plane slip
p -- alreadyy noted in ccore cut priior to
running casing in th
he well -- in
nduced wellbore damag al deformation noted accross
ge, with ova
several hundred
h feett of the 5.5-in
nch casing.
The
T maximum horizonta
al stress gra
adient, base
ed on mini--frac and bo
orehole brea
akout
data, wa
as determine
ed to be re
elatively high
h at 1.25 p
psi/ft. The sstress differrential within
n the
Bowland Shale -- about 4,000 ps
si -- was fou
und to be an order of ma
agnitude higher than in N
North
American
n shale play pically have stress differrentials of on
ys, which typ nly several h
hundred psi.. It is
unclear whether
w the high stress differential
d is
s local or wid
dely prevale
ent across th
he UK.
Cuadrilla’s
C co
onsultants concluded that excess fl uid pressure
e exerted on
n the fault d
during
the hydra
aulic stimula
ation overca
ame the roc
ck friction co
ontaining this stress, wh
hich enabled the
fault to slip
s and gen
nerate small earthquake
es. Simultan
neously, bed
dding plane
e slip up the
e hole
caused the
t well’s ca
asing string to deform. Based on fault size a
and geometrry, the maxiimum
ake in the Bowland Sub
earthqua b-basin was estimated tto be appro
oximately ma
agnitude 3.0
0, still
considere
ed too smalll to cause significant dam
mage to surf
rface structures in this re
egion.
June, 2013 XI-8

XI. United Kingdom
K EIA/ARI W
Figu
ure XI-4: Seism
mic Reflection
n Line Showingg Suspected Active Faults
Bowland Sub-bbasin
Near The Preese Hall-1 Well In The B
Source: de Pater and Baiscch, 2011
The
T consulta
ants also infe he injected ffrac fluid remained con
erred that th ntained within the
induced fracture
f systtem and did not leak into
o the shallow
w freshwate
er aquifer sysstem, becau
use of
the thick
k and imperm
meable Bow
wland Shale and overlying Permian
n anhydritess. A subseq
quent
report recommended
d monitoring
g during hydraulic fractu
uring operations to help mitigate ind
duced
seismicity.10
As
A a result of
o the earthq
quakes the government
g halted shale operationss in the UK from
May 201
11 until Dec
cember 201
12. The Royal Societty and Roya
al Academyy of Engine
eering
conducte
ed a review of the risks, recommen
nding the folllowing three
e primary stteps for enssuring
health an evelopment::11
nd safety during shale de
 Groundwate
G er Monitorinng. The BGS S should connduct region nal baseline surveys of
groundwater ahead of sh hale development, while operators co onduct site-sspecific survveys
to
o identify pos
ssible natura
al methane concentratio
c ons in ground dwater. Abaandoned wells
should be mo onitored and remediated
d to prevent ffracture fluid
ds from enteering freshwa ater
aquifers.
June, 2013 XI-9

XI. United Kingdom
K EIA/ARI W
 Well
W Integrity y. Well design, construcction, and in
ntegrity testin
ng should ennsure that
multiple
m layerrs of steel an
nd cement are present too preclude leeakage of flu
uids into
frreshwater aq
quifers.
 Mitigating
M Se
eismicity. The
T BGS should survey the regiona al distribution
n of faults,
sttresses, andd seismic haz
zards ahead d of shale de
evelopment, while opera ators conducct
site-specific surveys.
s Seismicity should be monittored beforee, during, and after hydra aulic
sttimulation, which
w should
d be shut dowwn if seismicc risks become unaccep ptable.
After
A conside
ering these and ews, DECC put in place
a other vie e a new regu
ulatory regim
me for
shale de
evelopment starting De
ecember 20
012. The rregime requ
uires operators to eva
aluate
potential seismic haz
zards posed g, implementt seismic mo
d by hydraullic fracturing onitoring of each
al well site area, and propose mitigation
individua m ste
eps to miniimize the cchance of ffuture
earthqua
akes due to hydraulic fra
acturing. A real-time trig
gger is to be
e installed to
o cut off inje
ection
should significant ea
arthquake ris
sks arise. These
T rules a
are expected to add sig
gnificant cosst and
time to drill
d shale we
ells in the UK. Cuadrilla
a’s Anna’s R
Road-1 well is the first tto be spud u
under
the new shale rules. Hydraulic
c stimulation of this wel l -- which C
Cuadrilla reccently annou
unced
would be
e delayed un
ntil 2014 at th
he soonest --
- would requ
uire further sspecific apprrovals.
1. NORTH
N UK CARBONIIFEROUS SHALE
S RE
EGION
1.1 In
ntroduction
Northern
N Eng
gland and so
outhern Scottland are cha
aracterized by a comple
ex assembla
age of
isolated basins
b and troughs
t whic
ch contain th
hick, organicc-rich Carbo
oniferous sha
ales, Figure XI-1.
These sh
hale-prospec
ctive lows are
a separate
ed by structu where Carboniferous wa
ural highs w as not
deposited
d or has been eroded. Based on mapping of Carbonifero
ous basins cconducted b
by the
BGS, the
ese troughs cover
c proximately 10,000 mi2.
a total area of app
The
T Bowland
d Sub-basin of Lancashire, where sh
hale drilling has been cconcentrated
d thus
far, is on
ne such trou
ugh, represe
enting the onshore
o ma
argin of the petroliferous East Irish
h Sea
Basin. Further
F to th
he east the Cleveland Basin is co
onsidered th
he onshore extension o
of the
Southern
n North Se
ea gas ba
asin. In between llay the Ch
heshire, W
West Lancasshire,
Northumberland, Eas
st Midlands,, Pennine, Gainsboroug
G gh, Midland V
Valley, and other basinss and
troughs containing
c Carboniferou
C us-age shale
es. Our stud
dy grouped these isolatted basins into a
single reg
gion for shale resource assessmentt.
The
T western portion of the Bowlan en the site of all UK sshale
nd Sub-bassin has bee
June, 2013 XI-10

XI. United Kingdom
K EIA/ARI W
exploratio
on drilling to
o date. The Carbonifero
ous Bowland
d Shale is th
he main targ
get, ranging from
about 2.0
0 to 2.5 km deep acros
ss the moderately faulte
ed Bowland Sub-basin, Figures XI-5
5 and
XI-6. Cu
uadrilla’s Prreese Hall-1
1 well encou
untered the top of the target Lowe
er Carbonife
erous
Bowland Shale at a measured depth
d of 6,8
854 ft and pe
enetrated a total 2,411 ft of organicc-rich
gure XI-7. The
shale, Fig T BGS has mapped th
he thicknesss of the Uppe
er Bowland S
Shale Forma
ation,
as well as
a its organic-rich (high
h-gamma) se
ection, acro ss northern England, F
Figure XI-8. The
organic-rrich shale ra
anges up to 120 m thick
k but more tyypically is re
ecorded as 2
20 to 40 m thick.
owever, that petroleum wells
Note, ho w are prreferentially drilled on sstructural hig
ghs, where sshale
tends to be thinner th
han in the tro
oughs.
The
T eastern Bowland
B Shale play exte
ension in the
e Gainsboro
ough Basin h
has less geo
ologic
control th
han the wes
st. Here the
e shale rang
ges up to 3 00 m thick in the Dinan
ntian half-grraben
basins, Figure
F XI-9. Dart Energ
gy reported that the mo
ost organic-rrich portion defined by high-
gamma shales
s range
es up to 110
0 m thick. In the Chesh
hire Basin th
he Carbonife
erous (Namu
urian)
Bowland and Holywe
ell shales witth TOC up to
o 5% occur a
at depths off 1 to 5 km, F
Figure XI-10
0.
Elsewhere
E in the region, the Namurian Holywelll Shale, sou
urce rock forr convention
nal oil
fields in the southerrn East Irish
h Sea as well
w as the F
Formby oil ffield, is repo
orted to havve an
overall average TOC
C of 2.1% (rrange 0.7% to 5%) and averages 3
3.0% TOC in
n its lower, more
organic-rrich portion. Clay content is uncerta
ain, although
h public data
a indicate th
hat Carbonife
erous
mudstones in the UK
K generally average
a arou
und 25% Al2 O3 (range 12-38%), mostly from cla
ay.
The
T Pennine Basin has relatively
r goo
od geologic control from
m past petrolleum explora
ation.
The Crav
ven Group (Mississippia
( an) ranges from
f about 1
1.5 km thickk in the Craven sub-bassin to
over 5 km
k thick in the Widmerrpool Gulf. These mud
dstones we
ere deposited in distal sslope
turbidite and hemipelagic envirronments in relatively n ep depocen
narrow, dee nters. The early
Namurian shale units
s (local nam
mes Bowland
d, Edale, Ho
olywell shale
es, top part o
of Craven Group)
ennine Basin have high
of the Pe h TOC and are known to have sou
urced hydro
ocarbons. T
These
Namurian marine sha
ales generally have rich TOC in exccess of 4%.
June, 2013 XI-11

XI. United Kingdom
K EIA/ARI W
Figure XI-5: Structural Cross-Section in

n the Bowlandd Sub-basin R
Region, Northw
west UK
Showing Numerouss Faults Acrosss the Cuadrillla and IGas Ennergy Licensees.
Source: Souurce: IGAS Energy, 2012
Figuree XI-6: Structu

ural Cross-Secction In The Bowland
B Sub-bbasin Region Showing The Highly Faulteed
Bowland
B Shalee At 2 To 3 Km Penetrated Byy The Ince Marshes Well
m Depth. Addiitional Faults P
Sug
ggest That Maany Additional Faults Are PPresent But Unnrecognized.
Source: IGA
AS Energy, 20122; modified from
m BGS Map 96_LLiverpool
June, 2013 XI-12

X
XI. United Kingdom EIA/ARI W
Figure XI-7: Stratigraphic Column n and Composite Log for the Cuadrrilla Figure XI-8: Thicknesss of the Upper Boowland Shale Formmation in
Prreese Hall-1 well in
n the Bowland Sub-Basin Northeern England, as WWell as the High-Gaamma Thickness. Note That
Petroleu
um Wells Tend to bbe Drilled on Struuctural Highs Wheere the Shale
May be TThinner Than in thhe Troughs.
Source: de Pater and Baischh, 2011 Source: Smith

S et al., 2010
JJune, 2013 XI-13

XI. United Kingdom
K EIA/ARI W
Figure XI-9:
X Schemattic Cross-Secttion Across Th he Gainsboroough Trough S Showing Thickk Bowland Shaale.
Additional Faults
F Are Likkely To Be Preesent But Not S
Shown.
Source: Darrt Energy, 2013
Figure XI--10: Geologic Map and Genneralized Strucctural Cross-S

Section of the Cheshire Bassin. Carbonifeerous
(Namurian)
( Boowland and Hoolywell Shaless with TOC Upp to 5% Occurr at Depths of 1 to 5 km.
Souurce: DECC, 2012
June, 2013 XI-14

XI. United Kingdom
K EIA/ARI W
The
T North UK
U Carbonifferous Shale region iss mainly in the dry ga
as window. For
example, the Norma
anby-1 and Grove-3
G con
nventional pe ells reportedly recorded high-
etroleum we
gamma sections
s witthin the Bow
wland Shale, while the Scaftworth-B2 well mea
asured 2.07
7% to
3.63% TO 246 m.12 In addition, mo
OC with 1.26% Ro at a depth of 2,2 ost of the Clleveland Basin is
o be within the dry gas
known to s window. Oil
O and wet gas therma
al maturity w
windows ma
ay be
present locally but co
ould not be defined
d with the limited d
data availab
ble.
No
N porosity data
d are available for Namurian
N sh
hales in the
e Pennine B
Basin. Base
ed on
borehole
es drilled by the BGS in the southerrn Midlands , relatively sshallow (900
0 m deep) U
Upper
Paleozoic shales retained
r hig
gh porositie
es (5-10%). Howeverr, porosity is likely to
o be
considera perhaps 3-5%) at typical target shale
ably lower (p e depth of 2
2-4 km.
The
T Midland Valley Basiin (MVB), a large east- northeast trrending grab
ben complexx that
stretches
s across so
outhern Sco
otland, is bounded
b by the Highla
and Bounda
ary Fault to
o the
northwes
st and the Southern
S pland Fault to the south
Up heast. The MVB comp
prises a com
mplex
series of small fau
ulted sub-ba
asins, such as the Kin
nkardine Ba
asin where Dart Energ
gy is
ng shale ga
evaluatin as resources
s. This strructural com
mplexity wass over-printted by extensive
igneous intrusion durring late Carrboniferous to
t early Perm
mian time.
The
T MVB con
ntains a rela
atively complete sequencce of Carbo
oniferous dep
posits up to 6 km
gure XI-11.13 Namurian
thick, Fig 00 m thick at outcrop. The
n strata range from 45 0 m to 1,40
depositio
onal sequen
nce reflects
s mixed marine
m shelff carbonate
e and delta
aic successsions,
comprisin
ng upward-coarsening
g cycles of
o marine limestone, mudstone, siltstone and
ne.14 Lower Carbonifero
sandston ous (Dinantian) oil-shale
e source roccks, such ass the Mid-Lo
othian
Oil shale
e, buried dee
eply in the Midlothian-Le
M even Synclin e generated
d waxy crude
e oil that sou
urced
clastic re
eservoirs of similar
s age in
n the adjace
ent anticliness.
June, 2013 XI-15

XI. United Kingdom
K EIA/ARI W
Figure XI-111: Geologic Map

M of the Mid dland Valley B
Basin. Carbonniferous (Nammurian)
Sh hales Crop Ouut at the Surfaace but May Reeach Prospecctive Depth.
Source: Underrhill et al., 2009
1.2 Reservoir
R Properties
The
T total map
pped deep Carboniferou
C us area in th
he North UK
K Carbonifero
ous Shale re
egion
is approx 200 mi2. Be
ximately 10,2 mplexity and poor depth ccontrol was poor,
ecause of strructural com
only halff of the totall area was assumed
a to be in the p
prospective depth windo
ow and rela
atively
d (4,635 mi2).
unfaulted ) The targe
et lower orga
anic-rich porrtion of the B
Bowland and
d Holywell shales
(and loca
al equivalentts) averages
s about 300 ft thick and 8,000 ft dee
ep in the Bo
owland Sub-basin
region, with
w 3.0% av
verage TOC. Porosity is
s estimated tto be about 4% at targe
et depths of 3 km,
much low
wer than the
e 5-10% me
easured at shallow <1 kkm depth. T
Thermal matturity is main
nly in
( o 1.3%), although less
the dry gas window (R s mature pocckets in the w
wet gas wind
dow may exxist.
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XI. United Kingdom
K EIA/ARI W
1.3 Resource
R Assessmen
A nt
Risked,
R technically recoverable sha
ale gas reso
ources in th
he North UK Carbonife
erous
Shale reg
gion are estimated to be
e 25 Tcf, outt of a risked shale gas in-place of 126 Tcf, Table XI-
1. The play has a favorable net
n resource
e concentrattion of abou mi2, reflecting
ut 117 Bcf/m g the
nt thickness of organic-rich shale.
significan
For comparis
son, in Septe
ember 2011 Cuadrilla R
Resources e
estimated the total shale
e gas
in-place within its Bo
owland Sub--basin licens
ses to be ap
pproximatelyy 200 Tcf, ba
ased on logss and
m two shale and three co
core from wells.15 The
onventional petroleum w e company h
has estimate
ed the
total sha
ale gas reso
ource-in-plac all-1 well to be 539 Bccf/mi2.
ce concentrration at its Preese Ha
Cuadrilla
a’s estimate is that 10% or about 20 Tcf may be
e recoverable
e. It appearrs that Cuadrilla’s
estimate is based on
n the entire shale sectio
on, whereas EIA/ARI co
onsiders onlyy the lower, most
organic-rrich section as
a the prosp
pective interv
val.
Separately,
S ndent consu ltant identified a 1,195--km2 prospe
IGAS Energy’s indepen ective
area with
hin an avera
age 250-m th
hick organic
c-rich interva hysical logs from
al, constrained by geoph
eight con
nventional petroleum
p wells
w that pe
enetrated the
e Bowland Shale. Afte
er drilling itss first
shale appraisal well last year, IG
GAS estimatted the shale
e gas in-place (GIP) ressources with
hin its
licenses to be about 9.2 Tcf.
Dart
D Energy’s
s third-party consultant NSAI has esstimated tha
at Dart’s lice
enses have ssome
32.46 Tc
cf of GIP in unspecified
u shale
s formations in the Gainsborough Trough o
of East Midla
ands,
cf of shale gas GIP in
as well as 30.55 Tc n the Chesh
hire Basin ((gross, Bestt Estimate). No
recovery estimate was
w d.16 Finally, in Scotlan
reported nd’s Midland
d Valley Bassin, Dart En
nergy
reported that the com
mpany’s PED
DL 133 licen
nse has an e
estimated 2.5
5 Tcf of shalle gas GIP b
based
on a third-party co
onsultant re
eport. Rec
coverable p rospective shale gas resources were
d at 115 Bcf in the Carboniferous
estimated s Black Me
etal Shale a
and 255 Bcff in the Lotthian-
Broxburn
n Shale (Bes
st Estimates;; net to Dart)).
1.4 Recent
R Activity
The
T Bowland
d Sub-basin, the only active
a shale drilling region in the U
UK, has had
d five
shale exp
ploration we
ells drilled to
o date. The main operattors are Cua
adrilla Resources (4 lice
enses
totaling 1185
1 km2; 4 wells), IGA
AS Resource m2; 1 well), and Dart En
es (14 licensses; 1363 km nergy
(11 licens m2).
ses; 1041 km
June, 2013 XI-17

XI. United Kingdom
K EIA/ARI W
In
n August 2010 Cuadrilla
a drilled the first shale g
gas exploration well in the UK, spud
dding
the Pree
ese Hall-1 ve
ertical well in the Bowla
and Sub-bassin near Blacckpool, Lanccashire. The top
of the ta
arget Lower Carbonifero
ous Bowland
d Shale wass encounterred at a me
easured dep
pth of
6,854 ft. The well penetrated a total 2,411 ft of orga
anic-rich sha
ale. Natura
ally fractured
d, the
Bowland is within the
e dry gas the
ermal maturiity window.
After
A drilling was completed on the
e Preese H all-1, Cuadrrilla comple
eted and fra
acture
stimulate
ed the well in
n early 2011
1. This operration repressented the U
UK’s first an
nd only conccerted
attempt to
t produce shale
s gas. As
A previously discussed
d, small eartthquakes we
ere induced near
the well by the hydra
aulic fracture stimulation
n. Operatio
ons at the w
well were hallted in May 2011
with no gas
g productio
on reported.
In
n completing
g the well, Cuadrilla
C perrforated sha le formation
ns within the
e Bowland S
Shale,
Worston Shale, and Hodder Mu
udstone at depths
d rang
ging from 7,670 to 8,94
49 ft. Five sshale
zones, out
o of 12 originally
o pla
anned, were
e individuall y stimulated
d with a sa
and/water sslurry,
separate
ed by bridge
e plugs. The
e total stimu
ulation size,, over 50,00
00 bbl of wa
ater and 400
0 t of
sand pro
oppant, was relatively larrge for a verttical shale w
well but still cconsiderablyy smaller tha
an the
typical sttimulation off a horizonta
al shale well in North Am
merica (abou
ut half the w
water volume
e and
10% of th
he sand volu
ume).
Cuadrilla
C drilled and corred two othe
er vertical w
wells in the Bowland Ba
asin. Durin
ng 2H
2010 the
e nearby Gra
ange Hill-1 vertical
v well logged overr 2 km of Ca
arboniferous shale acrosss the
depth intterval of 1,200 m to 3,3
300 m, the total
t depth o
of the well. In 2011 the
e Becconsh
hall-1
well logged shale fro e total depth
om depths off 2,450 m to 3,100 m, the h of the well..
Cuadrilla’s
C most
m recent shale
s well in
n the Bowlan
nd Sub-basin, the Anna
a’s Road-1,, was
abandoned at a deptth of 2,000 ft
f due to drilling problem
ms. The welll was expectted to be re--spud
in January 2013 and
d completed in about fou
ur weeks, wiith the top B
Bowland Sha
ale predicted
d at a
depth of about 3100 m.
GAS Energy
IG y Plc, 24.5% ore operator of oil
% owned by Nexen and the UK’s largest onsho
and gas fields, is ev
valuating the
e shale gas potential of its blocks. IGAS had a
acquired Nexen’s
portfolio of UK coalb
bed methan
ne licenses in March 20
011. The ccompany rep
ported that at its
ge has shale extending
Point of Ayr acreag g over the e
entire blockk with an exxpected ave
erage
s of more than 800 ft. IGAS Energy
thickness y noted that a significan
nt proportion of its acrea
age in
June, 2013 XI-18

XI. United Kingdom
K EIA/ARI W
the north
hwest Englan
nd—from Ellesmere Port in the wesst in PEDL 1
190 to the T
Trafford Centre in
L 193—is considered to have shale potential.
the east within PEDL
n 2011-12 IGAS drilled the Ince Marshes-1

In M w
well to a to
otal depth o
of 5,714 ft in
n the
Bowland Sub-basin. y intended as
Originally a a shallow
w coalbed methane test, the well was
deepene
ed and enco
ountered the e Bowland Shale at de
e upper two--thirds of the epths of 4,200 to
5,200 ft. The Bowla
and Shale, estimated
e att 1,600-ft to
otal thicknesss, had gas shows and TOC
ranging from
f 1.2% to 6.9% (ave
erage 2.7%)). Thermal maturity appeared to b
be in the we
et gas
window (R %).17
( o 1.0-1.1%
Dart
D Energy, based in Australia
A and
d Singapore,, holds a sig
gnificant sha
ale position iin the
UK, inclu
uding the we
estern Penniine Basin, but has not yyet drilled forr shale there
e or elsewhe
ere in
the country. Dart’s 14 PEDL’s with
w shale potential,
p parrt of its acqu
uisitions of ccoalbed metthane
operators
s Composite
e and Green m2 in gross a
npark Energy, total abo ut 3,700 km area. Third--party
consultan
nt NSAI has
s estimated these block
ks hold app roximately 6
65 Tcf of total shale GIIP, of
pproximately 30.5 Tcf is located in th
which ap he western P
Pennine Bassin (gross, Be
est Estimate
e).
hale drilling has occurred yet on tthe eastern side of the

No sh e Bowland S
Shale
Region. Dart Energy
y holds the largest land position, a ttotal of 13 liccenses cove
ering about 1
1,235
km2. NS
SAI has esttimated that Dart’s bloc
cks hold abo
out 47.6 Tccf of shale G
GIP (gross, Best
Estimate). Houston-based eCO
ORP Interna
ational, LLC has committed to drilling and corring a
horizonta 014 to farm into one of Dart’s blockks. Separattely, IGAS e
al well by 20 estimates it holds
388 km2 of shale-pro
ospective are
ea in 9 licens
ses in this re
egion.
Dart
D e operator in the Midlland Valley Basin, hass not
Energy,, the only active shale
announced firm plan
ns for shale
e drilling. BG Group re
emains a joint-venture p
partner on D
Dart’s
Lothian Shale
S al in this region.
interva
Much
M further to the south based Eden Energy and
h, Australia-b d UK-based Coastal Oil and
m2 of shale gas
Gas Ltd. jointly conttrol 2100 km g and coa
albed methane potential in South W
Wales,
Bristol, and
a Kent. Prrospective re
ecoverable shale
s gas re d by Eden’s third-
esources were estimated
party con
nsultant to be 18.3 Tcff out of a to gross; Best Estimate). This
otal 49.8 Tccf of GIP (g
includes 806 km2 within
w 7 PED
DLs in South
h Wales witth potential in the Nam
murian Meassures.
Howeverr, this region was not ass
sessed by EIA/ARI
E beca
ause of limite
ed publicly a
available datta.
June, 2013 XI-19

XI. United Kingdom
K EIA/ARI W
2. SOUTH
S UK JURASSIC
C SHALE REGION
R

ntroduction
The
T Wessex and Weald basins regio
on of southe rn England is the UK’s p
principal onsshore
oil-producing area. Both basins
s produce oiil and some
e natural gass from conventional Jurrassic
ssic clastic and carbonate reservoiirs which we
and Trias ere sourced
d by Jurassic marine sh
hales.
The Wes
ssex Basin hosts
h the 50
00 million bb
bl Wytch Fa
arm oil field,, by far the country’s la
argest
onshore field, wherea
as the Weald Basin has
s several mu ch smaller o
oil fields.
The
T Wessex Basin comp
prises a serie
es of post-Va
ariscan exte
ensional sed
dimentary tro
oughs
and intra
a-basinal hig
ghs, located mainly in Hampshire
H a
and Dorset and extending into adja
acent
offshore areas. The Weald Basin is a better defined an
nd structurallly simpler syyncline locatted in
d Kent. The
Sussex, Surrey, and e basins are
e separated by the Ham
mpshire-Diep
ppe High, bu
ut the
boundary
y is indistin e two basins were inte
nct and the during Mesozoic
ermittently cconnected d
depositio
on. They contain rep
peating cycles of Jura
assic shallo
ow-water marine mudrrocks,
sandston
nes, and limestones which are overrlain by larg
gely non-marine sedime
ents of the L
Lower
Cretaceo
ous Wealden
n Group.
For the purpo

ose of this study, the Wessex
W and
d Weald bassins are con
nsidered a ssingle
Jurassic oil-prone sh
hale resourc
ce region. Additional JJurassic sha
ale areas w
with affinity to
o the
Wessex Basin may exist furtherr to the wes
st (e.g., Brisstol Channel Basin), but these werre not
d.18
assessed
The
T structura d basins is ssomewhat ssimpler than most
al geology off the Wessex and Weald
other UK
K shale regions, althoug
gh still more and faulted than North American sshale
e complex a
plays. While
W not inte
ensively defformed, thes
se basins co
omprise a se
eries of indivvidual sub-basins
separate
ed by norma
al faults. For
F example
e, the Wesssex Basin ccomprises fo
our smaller half-
grabens (Pewsey, Mere-Portsdo
own, Dorset and
a Channe
el).
2 shows that roughly 10,000-ft th ick of Lowe

Figure XI-12 er Carbonife
erous to Te
ertiary
sedimenttary rocks is
s present in
n the Weald
d Basin. Lo
ower Jurasssic organic-rich shales rreach
depths of about 7,00
00 ft or more
e along the basin
b axis. I nterior faultss appear to be relativelyy few,
spaced about
a 5 to 10 km apart, and seemin
ngly allow a mple room for shale de
evelopment. The
strata dip
p quite gently
y, only a few
w degrees.
June, 2013 XI-20

XI. United Kingdom
K EIA/ARI W
Figure XI-12: Geolog

gic Map and Generalized
G Sttructural Crosss-Section of tthe
Wealld Basin. Lowwer Jurassic Shales
S Occur aat a Depth of aabout 7,000 ft.
Source: DT
TI, 2003
However,
H close-spaced drilling
d of additional faults. Inde
often reveals the presence o eed, a
detailed cross-sectio
on of the so
outhern porttion of the W
Wessex Ba
asin, constra
ained by mu
ultiple
wells, shows a serie
es of closely spaced faults, Figure X
XI-13. The d
depth to the
e Lias (JB) in
n this
offshore setting soutth of Wytch oil field ran
nges from 4,,000 to 5,00
00 ft. Note how each w
well is
n a separate
located in e fault block. Further drilling is likelyy to discoverr additional ffaults.
The
T Jurassic section com
mprises an alternating
a ssequence of organic-rich
h mudstoness and
carbonattes with subo
ordinate san
ndstones. The urce rocks a
T main sou and potentia
al shale targe
ets in
this regio
on are seve
eral Jurassic
c-age shale
e formations , which are
e mainly oil--prone in de
eeper
settings (immature elsewhere),
e in contrast with
w the mosstly dry-gas prone Carb
boniferous shales
of northe
ern England and Scotlan
nd.
June, 2013 XI-21

XI. United Kingdom
K EIA/ARI W
Figure XI-13: Structuraal Cross-Section of a 9-Mile Long Portionn of the Wesseex Basin, Locaated Offshoree Just
South of
o Wytch Oil Fiield, Showing Depth to the Lias (JB) Rannging from 4,0000 to 5,000 ftt. Note How EEach
Well is Located in a Separate Fault Block and Further Drillinng is Likely too Discover Additional Faultss.
Source: Unnderhill and Pateerson, 1998
The
T Lias, Kim
mmeridge, an
nd Oxford clays contain Types II (algal saprope
elic), III (terre
estrial
plant), and II/III (mixed or degraded) kero es. Thermal maturity iss highly variable,
ogen source
depende
ent upon the
e complex structural evo he basins. In general, thermal ma
olution of th aturity
increases
s towards th
he centers of
o the Wess
sex and We
eald basins, where it re
eaches adeq
quate
rank for shale
s oil exp
ploration.
The t most im portant sourrce rock in th

T Lower Lias Clays (L. Jurassic), the he region ass well
as the main
m shale target, con
nsists of intterbedded sshales, mud
dstones, ma
arls and m
micritic
limestone
es. Lower Lias shales
s contain 0.5% to 2.1%
% TOC, reaching as high as 7%. The
isotopic character
c al oils in the Weald Basiin (35-42° A
of conventiona API gravity) m
matches with
h that
of the Lo
ower Liassic
c, indicating close source rock gen
nesis. Orga
anic matter is predomin
nantly
sapropelic oil-prone kerogen de nkton.19 Wh
erived from marine plan hile vertical TOC variatiion is
able, the eas
considera stern Weald
d Basin appe
ears to have lower TOC..
The
T Arreton 2 well, a key
k data po
oint located south of th
he Isle of W
Wight monocline,
recorded
d oil-prone th
hermal matu
urity of 0.8%
% to 0.9% R o in the Liass. Similar o
oil-prone ma
aturity
was note
ed at Penshurst in the central
c Weald Basin. T
Thermal matturity modeling indicatess that
the Lias is within the
e oil window across muc
ch of the We
essex-Chann
nel Basin, pe
erhaps beco
oming
marginally gas-prone
e in the Pew
wsey Sub-Basin.
June, 2013 XI-22

XI. United Kingdom
K EIA/ARI W
Secondary
S po
otential exists in the Ox
xford (up to 1
12% TOC) a
and Kimmerridge clays ((up to
20% TOC
C) in the Up
pper Jurassic
c. The Upp
per Jurassic Kimmeridge
e Clay consiists of altern
nating
shales (including oil shales), ca
alcareous mudstones, in
nterbedded micritic lime
estones, and
d thin
sandston
nes and silttstones. he TOC of some thin black shale
Th es frequentlly reaches 10%,
occasion
nally even 20 895 at Heatthfield in Sussex,
0%. Britain’’s first naturral gas well, drilled in 18
d 1,000 ft3/d from an uns
produced stimulated Kimmeridge
K Clay section
n. However, the Kimme
eridge
Clay is considered
c thermally
t im
mmature in the
t Wessexx-Weald region, apart p
possibly from
m the
northernm
most axial part
p of the Wessex-Channel Basin
n. The Upp
per Jurassicc Oxford Cllay is
organic-rrich, reachin
ng 10% TO
OC, but like
ewise is the
ermally imm
mature. Co
onsequentlyy, the
Kimmerid
dge and Oxfford clays we
ere excluded
d from our e
evaluation.
Porosity
P and permeabilitty of the Ju
urassic shalles are like
ely to be hig
gher than in
n the
Carbonife
erous beca
ause they have
h not been subjecct to as much compa
action. Jurrassic
mudstones encounte
ered in shallow (<30 m) engineering
g boreholes have porossities in the rrange
30-40%. However, Jurassic shales buried at depths o have much lower
of 1-5 km arre likely to h
porosity, perhaps 7%
%.
2.2 Reservoir
R Properties
The
T Lias sha oss) in the Wessex and Weald ba
ales average about 600 thick (gro asins.
Organic-rich thicknes
ss of the mo
ost oil-satura
ated and britttle zones, b
based on analysis of the
e Lias
in the Paris Basin,200 is estimatted at appro
oximately 16
65 ft, Figure Depth to the Lias
e XI-14. D
reaches 6,000 ft in the
t Weald Basin,
B avera
aging about 5,000 ft dee
ep. TOC off the prospe
ective
zone is estimated
e % but could be considerrably higher. Porosity, estimated at 7%,
to average 3%
is likely to be highe
er than olde
er Carbonife er than the 30-40% porosity
erous shaless, but lowe
measured at shallow op.21
w locations near outcro The ccurrent averrage geothe
ermal gradie
ent is
33°C/km.
Although
A not assessed, the
t Jurassic
c Kimmeridg
ge Clay, ano
other potential source ro
ock in
the Wess
sex and Weald basins, is
i notable fo
or containing
g thin limesto
one stringerss. These incclude
coccolithic carbonate at similar to the lithologyy of the carrbonate-rich Mid-
es which arre somewha
Bakken Shale
S in Norrth Dakota.
June, 2013 XI-23

XI. United Kingdom
K EIA/ARI W
g Suite Showing the Jurasssic Lias In the Paris Basin,

Figure XI-14: Log
as a Proxyy for the Wessex-Weald Shaale Region in tthe UK
Source: M. Mullen, Realm Energy,

E 2011
2.3 Resource
R Assessmen
A nt
The
T Wessex and Weald basins
b exten
nd over an o
onshore area
a of approxim 0 mi2.
mately 3,500
The pros
spective area
a was estimated to be half
h of total a mi2), with the remaining area
area (1,740 m
excluded
d due to po
otential faultting, shallow
w depth, ero
osion of the
e Lias, and
d surface acccess
issues. Out
O of a risk
ked shale oil in-place off 17 Bbbl an
nd risked sha
ale gas in-pllace of 8 Tccf, the
risked, te
echnically re
ecoverable re
esources arre estimated to be 0.7 b
billion barrelss of shale oiil and
0.6 Tcf of d shale gas, Tables XI-1 and XI-2.
o associated
Celtique
C Ene
ergie has re
eported thatt the Liassicc Shale at their Weald
d Basin lice
enses
ranges from
f 9,000 to 13,000 ft deep witthin a 467--km2 prospe
ective area. The com
mpany
estimated
d that the Liassic
L could
d have mean ble shale oil and shale g
n recoverab gas resourcces of
125 millio
on barrels off oil and 10 Tcf
T of shale gas.
June, 2013 XI-24

XI. United Kingdom
K EIA/ARI W
2.4 Recent
R Activity
Privately
P held
d Celtique Energie
E holds licenses in three are
eas of the U
UK: the Che
eshire
Basin, Ea
ast Midlands
s, and the Weald
W Basin. In the We
eald Basin, C
Celtique hass a 50% sha
are in
licenses covering 1,000 sq km
m. The com
mpany claim s to have unconventio
onal oil and
d gas
potential in the Jura c shales, as well as con
assic Liassic potential in tthe Triassic. No
nventional p
shale drilling has bee
en reported.
REFERE
ENCES
1 New Scienntist “Fracking Risk is Exaggeratted.” 11 Januaryy 2012.

2 Selley, R.C
C., 1987. “British Shale Gas Pottential Scrutinizeed.” Oil and Gass Journal, June 15, p. 62-64.
3 Selley, R.C
C., 2012. “UK Shale
S Gas – The Story So Far.” Marine and Petrroleum Geology, vol. 31, p. 100--109.
4 UK Departtment of Trade and
a Industry, 20003. “The Hydroccarbon Prospecttivity of Britain’s Onshore Basinss.” Report prepaared by
British Geeological Survey,, 93 p.
5 Smith, N., Turner, P., andd Williams, G.. 2010.
2 “UK Dataa and Analysis foor Shale Gas Prrospectivity. In: Vining, B.A. Picckering,
S.C., eds.., Petroleum Geoology: From Matture Basins to New Frontiers. P
Proceedings of thhe 7th Petroleumm Geology Confeerence,
Geologicaal Society of London, p. 1087-10098.
6 UK Departtment of Climatee Change (DECCC), December 2010;
2 updated 20012. “The Uncoonventional Hydrrocarbon Resouurces of
Britain’s Onshore
O Basins – Shale Gas.” Report
R prepared by the British G
Geological Survey, 40 p.
7 Stephensoon, M., Geological Society, Londdon, Presentationn on Shale Gas,, 60 minutes.
8 Waters, C.N.,
C Browne, M.A.E.,
M Dean, M.T., and Powell, J.H., 2007. “Lithostratigraaphical Framew work for Carbonniferous
Successioons of Great Brittain (Onshore).” British Geologiccal Survey, Reseearch Report RR
R/07/01, 60 p.
9 De Pater, D.J. and Baisch, S., 2011. “Geoomechanical Stuudy of Bowland S
Shale Seismicityy: Synthesis Repport.” Report prrepared
for Cuadriilla Resources, Ltd.,
L November 2, 2 71 p.
10 Green, C.A.
C and Styles, P., 2011. “Prreese Hall Shalee Gas Fracturinng Review & Reecommendations for Induced S
Seismic
Mitigation.” Report for Cuuadrilla Resourcees Ltd., April 20112, 26 p.
11 The Royyal Society and Royal Academyy of Engineering, 2012. “Shalle Gas Extractioon in the UK: a Review of Hyydraulic
Fracturingg.” June, 76 p.
12 Dart Enerrgy, Corporate Presentation,
P March 1, 2013.
13 Underhilll, J.R., Monaghhan, A.A., and Browne, M.A.E E., 2008. “Conntrols on Structtural Styles, Baasin Developmeent and
Petroleum
m Prospectivity inn the Midland Vaalley of Scotland.” Marine and P
Petroleum Geoloogy, vol. 25, p. 10000-1022.
14 Waters, C.N.,
C Browne, M.A.E., Jones, N.S
S., and Somerville, I.D., 2012. ““Midland Valley oof Scotland.” Chhapter 14, 10 p.
15 AJ Lucas Group Limited, News Release, September 22, 2011.
2
16 Dart Enerrgy, Quarterly Reeport, June 30, 2012,
2 18 p.
17 IGas Energy, Corporate Presentation,
P Junne 2012, 22 p.
18 Underhill,, J.R. and Paterrson, S., 1998. “Genesis of Tecctonic Inversion Structures: Seissmic Evidence ffor the Developm ment of
Key Strucctures along the Purbeck–Isle of Wight Disturbannce.” Journal of the Geological SSociety, Londonn, vol. 155, p. 975-992.
June, 2013 XI-25

XI. United Kingdom
K EIA/ARI W
19 Stoneley, R. 1992. “Review of the Habitaat of Petroleum in the Wessex B

Basin: Implicationns for Exploration.” Proceedingss of the
Ussher Soociety, vol. 8, p. 1-6.
20 Mullen, M.,
M Realm Energyy, 2011. “Shale Oil – The Next Big
B Play for Tighht Oil?” Januaryy 30, 27 p.
21 Smith et al.,
a 2010.
June, 2013 XI-26

XII. Spain EIA/ARI W
XII. SPAIN
S
SUMMA
ARY
The
T Basque--Cantabrian Basin, locatted in northe
ern Spain, ccontains a sseries of org
ganic-
rich Jurassic-age sha
ales with potential for we
et gas and ccondensate, Figure XII-1
1. In addition
n, the
Ebro (So
olsona) Basin, located to a east of the Basque-Cantabrian Basin, mayy also
o the south and
have loca
al potential for
f shale gas
s and oil. However, the
e shale in the
e Ebro Basin
n has TOC b
below
the 2% cut-off
c used in this study and thus wa
as not quanttitatively asssessed.
Figure XII--1. Selected Shale

S Gas andd Oil Basins off Spain
Souurce: ARI, 2013
June, 2013 XIII-1

The
T Jurassic
c-age (Liassic) marine shale
s in the
e Basque-Ca
antabrian Ba
asin contain
ns an
estimated
d 42 Tcf of
o risked sh
hale gas res
source in-p lace, with a
about 8 Tccf as the rissked,
ble shale ga
as resource, Table XII--1. In addition, the Jurrassic Lias S
Shale
contains nearly 3 billlion barrels of risked oiil/condensatte in-place, w
with about 0
0.1 billion ba
arrels
as the ris
sked, technic
cally recoverrable shale oil
o resource,, Table XII-2
2.
Table XIII-1. Shale Gaas Reservoir Properties

P and
d Tablee XII-2. Shale Oil Reservoirr Properties annd
Resourrces of Spain Resoources of Spaain
B
Basque-Cantabrian
n Basque-Cantab
brian
Basin/Gro
oss Area Basin/G
Gross Area
Basic Data
Basic Data
2 2
(6,620 mi ) (6,620 mi )
Shale Forrmation Jurassic Shale Formation
F Jurassic
Geologicc Age L. - M. Jurassic Geolo ogic Age L. - M. Jurasssic
Depositional Environment
E Marine Depositionaal Environment Marine
2 2
P
Prospective Area (mi ) 2,100
Physical Extent
Prospective Arrea (mi ) 2,100
Physical Extent
Orrganically Rich 600 Organically Rich
h 600
T
Thickness (ft) Thickness (ft)
Neet 150 Net 150
Intterval 8,000 - 14,500 Interval 8,000 - 14,5000
D
Depth (ft) Depth (ft)
Avverage 11,000 Average 11,000
R
Reservoir Pressurre S
Slightly Overpress. Reservoir Presssure Slightly Overpreess.
Properties
Properties
Reservoir
Reservoir
Average TOC (wt. %)

A 3.0% Average TOC (wt.
( %) 3.0%
T
Thermal Maturity (% Ro) 1.15% Thermal Maturrity (% Ro) 1.15%
C Content
Clay Medium Clay Content Medium
G Phase
Gas Wet Gas Oil Phase Condensatee
Resource
Resource
2 2
G Concentration
GIP n (Bcf/mi ) 49.8 OIP Concentraation (MMbbl/mi ) 3.4
R
Risked GIP (Tcf) 41.8 Risked OIP (B bbl) 2.9
R
Risked Recoverab
ble (Tcf) 8.4 Risked Recoveerable (B bbl) 0.14
Source: ARI, 2013 Source: A RI, 2013
DUCTION
INTROD
The
T Jurassic que-Cantabrrian Basin ccrop out in the eastern
c-age rocks of the Basq n and
western portion of th
he basin, prroviding acc
cess to valua
able informa
ation on the
e geologic se
etting
ervoir properrties of these shales. Analysis
and rese A of rrock sample
es indicates Type I/II org
ganic
matter with TOC valu
ues (in imma
ature sample 25%.1
es) of up to 2
The
T shales in
n the Lowerr Jurassic Comino
C and Castillo Pe
edroso forma
ations (Toarrcian-
and Plie age) were deposited under deep
ensbachian-a p marine cconditions fo
ollowing tecctonic
extension
n. The sha
ales are inte
erbedded within limesto
ones and ma
arls which, much like in the
Bakken Shale
S of the Williston Ba
asin (USA), may provide
e additional fflow and sto
orage capaciity for
oil and ga
as expulsed from the ma es.1,2
aturing shale
June, 2013 XIII-2

1. BASQUE-C
B ANTABRIA
AN BASIN
T Basque-Cantabrian Basin coverrs a large 6 ,620-mi2 are

The ea along the
e northern border
of Spain. The basin
n is bounded
d by faults and
a thrusts o
on the east, west and ssouth and b
by the
an Sea on th
Cantabria he north. Th
he Basque-C
Cantabrian B
Basin contaiins a sequen
nce of forma
ations
that hold organic-rich
h shales of Silurian-Ordo
S ovician, Jura
assic and Crretaceous ag
ge. Of these
e, the
Jurassic (Liassic) sha
ales appear to offer the most potenttial.
1.1 Geologic
G Se
etting
Jurassic
J Sh
hales. The
e Basque-C
Cantabrian B ains a series of regio
Basin conta onally
significan
nt, thick blac
ck shales of Jurassic-age, including the Lias Sh
hale at the base of the L
Lower
Jurassic.. We have mapped
m a 2,100-mi2 high
her quality p
prospective a
area for the Lias Shale iin the
western portion of th
his geologica
ally complex
x basin. We
e used inform he erosion o
mation on th of the
ale on the north
Lias Sha n and south
s and th
he 400-m g
gross Jurasssic interval to establish
h our
gure XII-2.3
prospective area, Fig
Figure XII-2. Prospeective Area off Jurassic Shaale, Basque-C

Cantabrian Bassin
Soource: ARI, 20133
June, 2013 XIII-3

A series of in
nterbedded black
b shales
s and carbo nates existss within the Jurassic inte
erval.
Figure XII-3 provides
s two region ctions, A to A’ and B to B’, identifying the sequ
nal cross-sec uence
sic black shales in the prospective area of the
of Jurass e basin. Fig
gure XII-2, shown previo
ously,
provides the location
n of these tw
wo cross-sec dentifies the key Cadialsso-1 well nea
ctions and id ar the
south-we
estern end of cross-sectiion B to B’.
Figure XII-33. Cross-Secttions Through Area of Basquue-Cantabriann Basin

h Prospective A
Sourcce: Quesada, S.,, 2005.
June, 2013 XIII-4

1.2 Reservoir
R Properties
Jurassic
J (Lia
assic) Shale
es. The Ca
adialos-1 we ll (shown on
n Cross-Secction B-B’), d
drilled
to 12,000
0 ft, provide
ed valuable information on the org
ganic-rich Lia
as Shale. T
The shale h
has a
gross thickness of 280
2 ft with a net thickne
ess of 30 to
o 50 ft, TOC
C values of 2% to 4% a
and a
thermal maturity
m (Ro) of 1.2%. The well also intersectted a shallow
wer Jurassicc Shale at a
about
9,500 ft with a gross
s thickness of 400 ft an
nd a net thi ckness of a
about 100 ft. This shallower
Jurassic Shale has a TOC of abo
out 2% and a thermal m
maturity (Ro) o
of 1.1%.
Figures XII-4 and XII-5 provide

p mation on the TOC and thermal ma
additional inform aturity
or the Juras
values fo ssic (Pliensb
bachian) Lia
as Shale in the northerrn portion off the prospe
ective
ar the Polientte-Tudanca Trough.4,5,6
area nea
Figu C Values in the Pliensbachiian Interval off the Jurassic

ure XII-4. TOC
June, 2013 XIII-5

Figu
ure XII-5. TOC
C Values in the Pliensbachiian Interval off the Jurassic
1.3 Resource
R Assessmen
A nt
The
T entire pa
ackage of Jurassic
J sha
ales, includin hin the 2,100-mi2
ng the Lias Shale, with
prospective area of the Basque
e-Cantabrian
n Basin hass a resource
e concentra
ation of abou
ut 50
Bcf/mi2 of
o wet shale gas and 3 million
m s/mi2 of shalle condensa
barrels ate.
The
T risked re
esource in-p
place within the prospecctive area iss estimated at 42 Tcf o
of wet
shale gas and 3 billiion barrels of
o shale con
ndensate. B
Based on mo ervoir prope
oderate rese erties,
mate risked, technically
we estim t re
ecoverable resources
r frrom these Ju
urassic shale
es of 8 Tcf o
of wet
shale gas
s and 0.1 billlion barrels of shale con
ndensate.
June, 2013 XIII-6

1.4 Recent
R Activity
Several
S companies hold leases and
d are active
ely exploring
g the Jurasssic Shales in the
Basque-C
Cantabrian Basin.
B For example,
e Sa
an Leon Ene
ergy (who accquired Realm Energy and its
oil and gas concessions in Spain
n) has two concession
c a
areas, totalin
ng over 210,000 acres iin the
basin. In
n addition, BNK
B Petroleum has a 38
80,000-acre hale concesssion in Castillo y
e Jurassic Sh
d hopes to spud an exploration well in this area during 1Q 2
Leon and ng approval.7
2013, pendin
HEYCO
H Enerrgy and Cam
mbria Europe
e, along with
h the Basqu
ue Energy Board, annou
unced
a USD $138
$ n 2011.8 No
million exploration program in o further info
formation is available on the
activities or results of this explora
ation program.
June, 2013 XIII-7

2. OTHER
O SHA
ALES OF THE
T BASQ
QUE-CANTA
ABRIAN BA
ASIN
Ordovician
O and
a Silurian
n Shales. The presen ce of the O
Ordovician an
nd Silurian sshale
urce rock in the Middle East and No
interval, a major sou orth Africa, h
has been well establish
hed in
nd boreholes. To furthe
Spain in outcrops an er assess th
he resource potential off these shalles, a
total of 24
2 new sam
mples of the
e Lower Silu
urian Formig
goso Forma
ation and M
Middle Ordovvician
Sueve Formation
F was
w gathered
d from twelve differentt outcrop lo
ocations in tthe province
es of
Asturias and Leon du 010. 9
uring May 20
Nineteen
N of the twenty-ffour sample
es had TOC
C values lesss than 1% and no sa
ample
recorded
d a TOC ab
bove 2%. In mostly inertinite.9
ng kerogen type was m
n addition, the remainin
Based on
o the resultts of this geochemical work, the iinvestigatorss concluded
d that the L
Lower
Paleozoic (Ordovicia
an and Silurian) shales in this part o
of the basin have poor p
potential for sshale
gas and oil. As such essment.9
cluded from further asse
h, these shalles were exc
Cretaceous
C Shales. The thick Cretaceouss-age (Albia
an-Cenoman
nian) Valma
aseda
Formatio
on contains the
t Enara Shale,
S which 5 Bm3 (6.5 T
h hold an esstimated 185 Tcf) of shale
e gas
based on
n a study of 13 wells in the
t Gran En
nara field in northern Spain. A shale
e gas explorration
program has been prroposed.10 However,
H no
o details in th
he TOC or o
other propertties accompa
anied
al shale ga
this initia as assessm
ment. San Leon Enerrgy’s separrate charactterization of the
Valmaseda Formatio
on and the Enara Shale
e indicates tthat the TO
OC, while up
p to 3.6% lo
ocally,
s only about 1%. As suc
averages ch, these shales were exxcluded from
m further asssessment.
3. EBRO
E BASIN
The
T Ebro (Solson) Basin is located
d to the sou
uth and easst of the Ba
asque-Canta
abrian
Basin in the northea
ast portion of
o Spain. Th
he shale po tential in thiis basin hass been evalu
uated
n 30 older pe
based on etroleum we
ells, twelve of
o which pene
etrated the P
Paleozoic se
ection. The wells
identified
d a shale se
equence at 1,650
1 to 4,00
00 m depth , with a thicckness of 50
0 to 100 m a
and a
thermal maturity
m rang
ging from 1%
% to 2% Ro, placing the
ese shales in
n the wet to dry gas win
ndow.
Howeverr, because the TOC of these
t shales averages only about 1%, the Paleozoic shalles in
the Ebro Basin were excluded fro
om further assessment.
a 4
June, 2013 XIII-8

A series of yo
ounger Eoce
ene-age rese
ervoir interva
als also conttain thermally mature sh
hales.
These mostly
m Middle eposited ass thin layers of shale interbedded w
e Eocene shales are de within
low-porosity sandsto
ones. Again alues in these Eocene shales averraged
n, however, the TOC va
n 1%, therefo
less than ore these sh m further asssessment.4
hales were excluded from
REFERE
ENCES
1 Gibbons, W.
W and Moreno, T., 2002. “The Geology of Spaain.” The Geologgical Society of LLondon, ISBN 1--86239-110-6.
2 Suárez-Ruuiz, I. and Praddo, J.G., 1995. “Characterizatioon of Jurassic Bllack Shales from
m Asturias (Nortthern Spain): Evvolution
and Petrooleum Potential.”” Composition, Geochemistry
G annd Conversion oof Oil Shales, NAATO ASI Series Volume 455, 19995, pp
387-393.
3 Quesada, S., Robles, S. and Rosales, I., 2005. “Depositional Archittecture and Traansgressive–Reggressive Cycless within
Liassic Baackstepping Carrbonate Ramps in the Basque–C
Cantabrian Basinn, Northern Spaain.” Journal of tthe Geological S
Society,
London, vol.
v 162.
4 San Leon Energy, Investor Presentation, 2012.
2
5 Fraguasa, A, and Erbab, E., 2010. “Biom metric Analyses as
a a Tool for the Differentiation oof Two Coccolithh Species of the Genus
Crepidolitthus (Pliensbachhian, Lower Juraassic) in the Basque-Cantabriann Basin (Northeern Spain).” Marrine Micropaleonntology,
vol. 77, Isssues 3–4, Deceember, p. 125–1336.
6 a Dorronsoro, C. 1996. “Characterization of thhe Liassic Sourcce Rock and Its Correlation with the Oil
Quesada, S., Robles, S. and
of the Ayyoluengo Field on the Basis of o Gas Chromattography and CCarbon Isotope Analyses (Basqque-Cantabrian Basin,
Spain).” Geogaceta, vol. 20 (1), p. 176-179, ISSN: 02136683X.
7 BNK Petrooleum Investors presentation, 20011.
8 Oil & Gas Journal, 2011. “Thick Shale Gaas Play Emerginng in Spain’s Canntabrian Basin”, May 12.
9 Maio, F., Aramburu,
A C. annd Underwood, J., 2011. “Geochemistry of Orddovician and Silurian Black Shaales, Cantabriann Zone,
Asturias and
a Leon Provinnces, Northwestt.” AAPG Searchh and Discoveryy Article #50529, posted Decem mber 19, 2011, aadapted
from postter presentation at AAPG Internaational Conferennce and Exhibitioon, Milan, Italy, O
October 23-26, 22011.
10 Platts, 20011. “Spanish Basque
B Region Reports
R m of Shale Gas Finds in Alava..” 17Oct2011/919 am EDT/13199 GMT,
185 Bcm
www.platts.com accessedd March 7, 20133.
June, 2013 XIII-9

XIII. Northern and Western Europe EIA/ARI World Shale Gas and Shale Oil Resource Assessment
XIII. NORTHERN AND WESTERN EUROPE
SUMMARY
Numerous shale gas basins and formations exist in Northern and Western Europe. This
Chapter discusses five of the more prominent of these shale basins and formations, namely: the
Paris and South-East basins of France, the Lower Saxony Basin of Germany, the West
Netherland Basin of the Netherlands, and the Alum Shales underlying Scandinavia, Figure XIII-
1. Please see individual Chapters for United Kingdom (Chapter XI) and Spain (Chapter VII) for
discussion of the other shale basins of Northern and Western Europe.
Figure XIII-1. Prospective Shale Basins of Northern and Western Europe
Source: ARI, 2013.
June, 2013 XIII-1

We estimate risked shale gas in-place for the five Northern and Western European shale
basins addressed by this study of 1,165 Tcf, with 221 Tcf as the risked, technically recoverable
shale gas resource. In addition, we estimate that these five shale basins contain 190 billion
barrels of risked shale oil in-place, with 8.3 billion barrels as the risked, technically recoverable
shale oil resource, Table XIII-1.
Table XIII-1. Shale Gas and Shale Oil Resources of Northern and Western Europe
Risked Risked
Shale Gas Resources Shale Oil Resources
Technically Technically
Basin/Formation In-Place Recoverable In-Place Recoverable
(Tcf) (Tcf) (B bbl) (B bbl)
1. Paris Basin (France)
·L. Jurassic Lias 23.8 1.9 38.0 1.52
·Permian-Carboniferous 666.1 127.3 79.5 3.18
Total 689.9 129.3 117.5 4.70
2. South-East Basin (France)
·L. Jurassic Lias 37.0 7.4 0.0 0.00
Total 37.0 7.4 0.0 0.00
3. Lower Saxony Basin (Germany)
·Toarcian Posidonia 77.7 16.9 10.6 0.53
·Wealden 1.8 0.1 3.2 0.13
Total 79.5 17.0 13.8 0.66
4. West Netherlands Basin (Netherlands)
·Namurian Epen 93.7 14.8 47.1 2.35
·Namurian Geverik 50.6 10.1 6.3 0.32
·Toarcian Posidonia 6.8 1.0 5.4 0.27
Total 151.1 25.9 58.8 2.94
5. Alum Shale
·Denmark 158.6 31.7 0.0 0.00
·Sweden 48.9 9.8 0.0 0.00
Total 207.5 41.5 0.0 0.00
Total 1,165.1 221.0 190.0 8.29
June, 2013 XIII-2

1. PARIS BASIN
1.1 Introduction
The Paris Basin of France is a large 65,000-mi2 intra-cratonic basin that encompasses
most of the northern half of the country, Figure XIII-2. The basin is bounded on the east by the
Vosges Mountains, on the south by the Central Massif, on the west by the Armorican Massif
and, for the purposes of this study, by the English Channel on the north. The Paris Basin is
filled mostly with Mesozoic and Paleozoic rocks which reach 10,000 feet of thickness in the
center of the basin but are exposed along its margins.
Figure XIII-2. Outline and Structure of Paris Basin
Source: ARI, 2013
June, 2013 XIII-3

The Paris Basin and its two distinct shale gas and oil formations - - the Lias Shale and
the Permian-Carboniferous Shale - - hold 690 Tcf of risked shale gas in-place, with 129 Tcf as
the risked, technically recoverable shale gas resource, Table XIII-2. In addition, the Paris Basin
and its two shale formations hold 118 billion barrels of risked shale oil in-place, with 4.7 billion
barrels as the risked, technically recoverable shale oil resource, Table XIII-3.
Table XIII-2. Shale Gas Reservoir Properties and Resources of the Paris Basin
Paris
Basin/Gross Area 2
Basic Data
(61,000 mi )
Shale Formation Lias Shale Permian-Carboniferous
Geologic Age L. Jurassic Permian-Carboniferous
Depositional Environment Marine Lacustrine
2
Physical Extent

Thickness (ft)
Net 105 160 83 100
Interval 4,000 - 10,000 6,000 - 8,000 9,000 - 11,000 12,000 - 16,400
Depth (ft)
Average 7,000 7,000 10,000 14,000
Properties
Reservoir
Average TOC (wt. %) 4.5% 9.0% 9.0% 9.0%

Clay Content Medium Medium Medium Medium
Gas Phase Assoc. Gas Assoc. Gas Wet Gas Dry Gas
Resource
2
Risked GIP (Tcf) 23.8 48.9 265.1 352.0
Table XIII-3. Shale Oil Reservoir Properties and Resources of the Paris Basin
Paris
Basin/Gross Area
Basic Data
2
(61,000 mi )
Shale Formation Lias Shale Permian-Carboniferous
Geologic Age L. Jurassic Permian-Carboniferous
2
Physical Extent

Thickness (ft)
Net 105 160 83
Interval 4,000 - 10,000 6,000 - 8,000 9,000 - 11,000
Depth (ft)
Average 7,000 7,000 10,000
Properties
Reservoir
Average TOC (wt. %) 4.5% 9.0% 9.0%

Clay Content Medium Medium Medium
Oil Phase Oil Oil Condensate
Resource
2
OIP Concentration (MMbbl/mi ) 13.4 20.4 0.2
Risked OIP (B bbl) 38.0 78.3 1.2
June, 2013 XIII-4

The Paris Basin contains two shale plays addressed by this resource study - - the Lower
Jurassic Lias Shale and the Permian-Carboniferous Shale, Figure XIII-31. The Jurassic Lias
Shale is composed of three distinct organic-rich black shales - - the Hettangian-Sinemurian
(Lower Lias) Shale, the Pliensbachian (Middle Lias) Shale, and the younger Toarcian (“Schistes
Carton”) Shale which is equivalent to the Posidonia Shale in Germany and the Netherlands.
Together these three shales are as much as 650 feet thick in the central part of the Paris Basin.2
For the purpose of this shale resource assessment, we have grouped these three shales into a
single shale assessment interval called the Lias (Liassic) Shale.
Figure XIII-4 provides an east to west cross-section for the Lias Shale across the Paris
Basin.2 (The location of the cross-section is provided on Figure XIII-2). Basin modeling of the
Lias Shale, in a smaller 3,640-mi2 study area of the Paris Basin, indicated that this composite
shale interval, primarily the Toarcian (“Schistes Carton”) Shale, has generated 81 billion barrels
of hydrocarbons.3 Extrapolating the smaller basin modeling study area to the full Lias Shale
prospective area in the Paris Basin of 5,670 mi2 and assuming that 30% of the generated
hydrocarbon still remains in the source rock, we estimate that 38 billion barrels of hydrocarbons
remain in the Lias Shale.
The deeper Permian-Carboniferous unconventional gas play is located in the eastern

and southern portions of the Paris Basin, particularly in the Lorraine Sub-basin. This area
contains a thick package of tight sands, shales and methane-charged coals. This resource
assessment will address the organic-rich shales of the Permian-Carboniferous interval,
including the Lower Permian Autunian Unit, the Upper Carboniferous (Late Mississippian and
Early Pennsylvanian) Namurian Unit, as well as the Upper Carboniferous (Middle and
Pennsylvanian) inter-bedded bituminous shales in the Stephanian and Westphalian sections.
Figure XIII-5 provides an east to west cross-section across the Paris Basin, identifying
the Permian-Carboniferous Shale in the eastern portion of the basin.1 The shales have fluvial
and lacustrine deposition raising concern with respect to higher clay content and less brittle
reservoir rock. The kerogen in the shales is a mixed Type II/III.
June, 2013 XIII-5

Figure XIII-3. East Paris Basin Stratigraphic Column
Lias Shales
Permian‐
Carboniferous
Shales
Source: Chungkham, 2009
June, 2013 XIII-6

Figure XIII-4. East-West Cross-Section of Paris Basin Highlighting Lias (Liassic) Shales
Figure XIII-5. East-West Cross-Section of Paris Basin Highlighting Permian-Carboniferous Shales
Source: Chungkham, 2009
June, 2013 XIII-7

We have concentrated our assessment on the Lower Permian Autunian and Upper
Carboniferous Namurian shales. The substantial presence of less brittle coals in the Upper
Carboniferous Westphalian and Stephanian may hinder successful application of hydraulic
stimulation in these shales. In addition, the organic content (TOC) of the inter-bedded shales in
the Westphalian and Stephanian is reported to range from 0.5 to 1.4%, below the minimum
TOC criterion used in this study.4
Based on information in the technical literature, we have used depth as a proxy for
thermal maturity (Ro) for establishing the dry, wet gas/condensate and oil windows for this shale
play. The dry gas window is represented by burial depth between 3,350 m and 4,750 m; the
wet gas/condensate window is represented by burial depth between 2,450 m and 3,350 m, and
the oil window is represented by burial depth between 1,200 m and 2,450 m, Figure XIII-6. 5
Figure XIII-6. Relationship of Thermal Maturity and Burial Depth, Paris Basin
Source: Elixir, 2011
June, 2013 XIII-8

Lias Shale. We have mapped a 5,670-mi2 oil prospective area for the Lias Shale based
on the 435o C Tmax contour area for the higher organic content Toarcian (“Schistes Carton”)
Shale. The 435o C Tmax contour (oil window) for the deeper Hettangian-Sinemurian Shale
underlies the 435oC Tmax contour of the Toarcian (“Schistes Carton”) Shale, Figure XIII-7.
The depth of the Lias Shale ranges from 4,000 feet to 10,000 feet in the basin center,
averaging 7,000 feet. The gross thickness of the shale ranges from 300 to 400 feet, with 105
feet of net organic-rich shale over the prospective area. The thermal maturity of the shale in the
prospective area (bounded by the 435o C Tmax contour) ranges from 0.7% to 1.0%, placing the
Lias Shale in the oil window.1 The TOC of the shale, while highest in the Toarcian and lowest in
the Sinemurian, averages 4.5%.
The shales are assumed to be normally pressured, given the presence of vertical
fractures (and higher vertical permeability). The shale appears to be medium in clay content,
lower in calcite (10% to 30%) and quartz (5% to 20%).
Permian-Carboniferous Shale. We have mapped a 17,940-mi2 prospective area for

dry gas and wet gas/condensate for the Permian-Carboniferous Shale and a more limited
11,960-mi2 prospective area for oil. For this, we used the 200 m gross isopach on the north and
west and the boundaries of the Paris Basin on the south and east, Figure XIII-8.1
Approximately 50 wells provide control for this gross isopach. We assumed that the shallower
oil interval extended across two-thirds of the larger prospective area.
Until recently, information on the Permian Carboniferous Shale was limited. Fortunately,
Elixir Petroleum has undertaken an exploration program on their Moselle Permit in the Paris
Basin and has provided information on their program. We have combined this data with
information from the technical literature for the reservoir properties of the Permian-
Carboniferous Shales.
The depth of the Permian Carboniferous Shale ranges from 6,000 feet to 16,400 feet,
averaging 7,000 feet in the oil window, 10,000 feet in the wet gas/condensate window, and
14,200 feet in the dry gas window. A significant portion of the Upper Carboniferous Namurian
section is at depths below 5,000 m and thus excluded from this resource assessment.
June, 2013 XIII-9

Figure XIII-7. Prospective Area for Lower Jurassic Lias Shale, Paris Basin
Source: ARI, 2013
Figure XIII-8. Prospective Area for Permian-Carboniferous Shale, Paris Basin
Source: ARI, 2013
June, 2013 XIII-10

While the gross interval in the prospective area is quite thick, much of this interval
contains lower TOC rocks. We estimate an average organic-rich net shale pay for the Permian
Carboniferous Shale of 83 to 160 feet, using low to moderate net to gross ratios. The TOC of
the shales ranges from 2% to 15%, averaging 9%. The reservoir is normally pressured.
Lias Shale. The Lias Shale of the Paris Basin contains a resource concentration of 13
million barrels/mi2 of oil plus associated gas. We estimate risked oil in-place for the Lias Shale
of 38 billion barrels, with 1.9 billion barrels as the risked, technically recoverable shale oil
resource. In addition, we estimate risked associated shale gas in-place of 24 Tcf, with 2 Tcf as
the risked, technically recoverable shale gas resource, Tables XIII-2 and XIII-3.
Permian-Carboniferous Shale. Given the limited data on the extent and distribution of
the individual shale units within the prospective area, we view the resource assessment of the
Permian-Carboniferous Shale as preliminary. The Permian-Carboniferous Shale of the Paris
Basin contains resource concentrations of 61 Bcf/mi2 in the dry gas window, 46 Bcf/mi2 in the
wet gas/condensate window, and 20 million barrels/mi2 in the oil window. We estimate risked
gas in-place for the Permian-Carboniferous Shale of 666 Tcf, with a risked, technically
recoverable shale gas resource of 127 Tcf (including associated gas). In addition, we estimate
risked shale oil/condensate in-place of 80 billion barrels, with 3.2 billion barrels as the risked,
technically recoverable shale oil resource, Tables XIII-2 and XIII-3.
1.5 Recent Activity
Most of the past exploration in the Paris Basin has targeted the Jurassic-age Lias Shale
oil play. However, some firms are beginning to acquire acreage in the eastern portions of the
Paris Basin where the Permian-Carboniferous Shale formation is the target. The 2,070 mi2
Moselle Permit and its Permian-Carboniferous resource interval, first granted to East Paris
Petroleum Development Corp, has been acquired by Elixir Petroleum. While the terms of the
lease do not require the company to drill any wells, Elixir has publically stated that it intends to
investigate the unconventional gas potential (tight gas, CBM and shale gas) on its lease.5
June, 2013 XIII-11

2. SOUTH-EAST BASIN
2.1 Introduction
The South-East Basin is the thickest sedimentary basin in France, containing up to 10

km of Mesozoic to Cenozoic sediments. The basin is bounded on the east and south by the
Alpine thrust belt and on the west by the Massif Central, an uplifted section of the Paleozoic
basement, Figure XIII-9. Local oil and gas seeps discovered in the 1940’s encouraged
hydrocarbon exploration in the South-East Basin. However, despite the drilling of 150 wells in
the onshore and offshore portions of the basin, no significant oil and gas deposits have been
found. Recent re-evaluations of the basin’s potential have stimulated a further look at this
complex basin and its shale formations.
Figure XIII-9. Outline of South-East Basin of France
Source: ARI, 2013
June, 2013 XIII-12

We estimate that the South-East Basin contains 37 Tcf of risked shale gas in-place, with
7 Tcf as the risked, technically recoverable shale gas resource, Table XIII-4. We have limited
our shale resource assessment to the western portion of the basin and its deep dry gas
potential area. In addition, given considerable uncertainty as to the location of the higher TOC
(>2%) portions of the basin, we have assumed that only 30% of the overall dry gas prospective
area will meet the 2% TOC criterion used by the study.
Table XIII-4. Shale Gas Reservoir Properties and Resources for the South-East Basin
South-East
Basin/Gross Area
Basic Data
2
(17,800 mi )
Shale Formation Lias Shale
Geologic Age L. Jurassic
2
Prospective Area (mi ) 3,780
Physical Extent
Organically Rich 525

Thickness (ft)
Net 158
Interval 8,200 - 16,400
Depth (ft)
Average 12,300
Reservoir Pressure Normal
Properties
Reservoir
Average TOC (wt. %) 2.0%

Thermal Maturity (% Ro) 1.50%
Clay Content Medium
Gas Phase Dry Gas
Resource
2
GIP Concentration (Bcf/mi ) 54.4
Risked GIP (Tcf) 37.0
Risked Recoverable (Tcf) 7.4
This study examined the shale gas potential of two formations in the South-East Basin,
the Upper Jurassic “Terres Niores” black shale, and the Lower Jurassic Liassic black shale,
Figure XIII-10. These shales are composed of Type II marine organic matter and were
deposited during a time of subsidence and rifting, when the “Liguro-Piemontais” ocean covered
portions of what is now southern France6. However, the Upper Jurassic “Terres Niores” black
shale has low TOC, not exceeding 1%.6 As such, this shale was excluded from further
assessment. The Lower Jurassic Lias Shale, while thermally mature and present in much of the
South-East Basin contains a wide spectrum of TOC values, ranging from 0.4% to 4.1%, Figure
XIII-11.7 Because of the presence of some higher TOC values, we have included the Lias Shale
in our resource assessment but have highly risked this shale play.
June, 2013 XIII-13

Figure XIII-10. South-East Basin Stratigraphic Column
Source: Vially, R., 2010.
June, 2013 XIII-14

Figure XIII-11. Generalized South-East Basin Cross Section
We have mapped an unrisked, 4,000-mi2 area prospective for shale gas in the eastern
portion of the South-East Basin, Figure XIII-12. The prospective area is bounded on the west
by the dry gas maturity limit, on the south by the onshore portion of basin, and on the east by
the available data on the TOC of the Lias Shale.
Uplifting along the western margin of the South-East Basin has brought the Lias Shale to
a more favorable depth for exploration. Depth to the Lias Shale ranges from 3,300 feet to
16,300 feet deep over the basin, with most of the shale in the prospective area at an average
depth of 12,300 feet, Figure XIII-12. The organic-rich gross interval of the shale is estimated at
525 feet with 158 feet of net shale. Total organic content (TOC) in the risked prospective area
averages 2%. Thermal maturity in the Lias Shale increases with depth, ranging from 1.3% Ro in
the shallower western areas to over 1.7% Ro in the deeper central area. Average vitrinite
reflectance (Ro) over the prospective area is 1.5%.
June, 2013 XIII-15

Figure XIII-12. Prospective Area for the Lias Shale, South-East Basin of France
Source: ARI, 2013
We estimate a moderate resource concentration in the dry gas prospective area of the
Lias Shale, South-East Basin of 54 Bcf/mi2. The risked shale gas in-place is estimated at 37
Tcf, with 7 Tcf as the risked, technically recoverable shale gas resource.
2.5 Recent Activity
A number of firms are beginning to examine the shale gas potential of the South-East
Basin; the initial permit award deadline was delayed due to the large numbers of applications.
The French Ministry of Energy and the Environment awarded several exploration permits,
covering over 4,000 mi2, to companies interested in investing in the drilling and exploration of
shale formations in the South-East Basin of France.
June, 2013 XIII-16

3. LOWER SAXONY BASIN: GERMANY
3.1 Introduction
The Lower Saxony Basin, covering an area of 10,000 mi2 and located in northwestern
Germany, is filled with Jurassic- to Cretaceous-age marine and lacustrine rocks, Figure XIII-13.
The basin contains two petroleum systems, the Jurassic and its Posidonia (Toarcian) Shale
source rock and the Lower Cretaceous and its Wealden (Berriasian) Shale source rock. The
Posidonia Shale is present throughout the Lower Saxony Basin while the Wealden Shale exists
primarily in its western portion of the basin.
Figure XIII-13. Outline Map for Lower Saxony Basin, Germany.
Source: ARI, 2013
June, 2013 XIII-17

For the Lower Saxony Basin of Germany, we estimate risked in-place shale gas of 80
Tcf, with 17 Tcf as the risked, technically recoverable shale gas resource, Table XIII-5. In
addition, we estimate risked in-place shale oil of 14 billion barrels, with 0.7 billion barrels as the
risked, technically recoverable shale oil resource, Table XIII-6.
Table XIII-5. Shale Gas Reservoir Properties and Resources of the Saxony Basin, Germany
Lower Saxony
Basin/Gross Area
Basic Data
2
(10,000 mi )
Shale Formation Posidonia Wealden
Geologic Age L. Jurassic L. Cretaceous
2
Prospective Area (mi ) 1,590 770 1,390 720
Physical Extent

Thickness (ft)
Net 90 90 90 75
Interval 6,000 - 10,000 10,000 - 13,000 13,000 - 16,400 3,300 - 10,000
Depth (ft)
Average 8,000 11,500 14,500 6,000
Mod. Mod. Mod. Slightly
Reservoir Pressure
Properties
Reservoir
Overpress. Overpress. Overpress. Overpress.

Average TOC (wt. %) 8.0% 8.0% 8.0% 4.5%
Clay Content Low/Medium Low/Medium Low/Medium Medium
Gas Phase Assoc. Gas Wet Gas Dry Gas Assoc. Gas
Resource
2
Risked GIP (Tcf) 10.3 20.3 47.1 1.8
Table XIII-6. Shale Oil Reservoir Properties and Resources of the Saxony Basin, Germany
Lower Saxony
Basin/Gross Area 2
Basic Data
(10,000 mi )
Shale Formation Posidonia Wealden
Geologic Age L. Jurassic L. Cretaceous
2
Prospective Area (mi ) 1,590 770 720
Physical Extent

Thickness (ft)
Net 90 90 75
Interval 6,000 - 10,000 10,000 - 13,000 3,300 - 10,000
Depth (ft)
Average 8,000 11,500 6,000
Mod. Mod. Slightly
Reservoir Pressure
Properties
Reservoir

Average TOC (wt. %) 8.0% 8.0% 4.5%
Clay Content Low/Medium Low/Medium Medium
Oil Phase Oil Condensate Oil
Resource
2
June, 2013 XIII-18

The Lower Saxony Basin is a distinct sub-basin within the greater North Sea-German
Basin. The Lower Saxony Basin is a graben that subsided and filled during Late Jurassic and
Early Cretaceous. The graben is bounded on the south by the Hanz Mountains, on the north by
the Pompecky Block, on the west by the Central Netherland High and on the east by Hercynian
Uplifts. During the Late Cretaceous, the Lower Saxony Basin was subject to complex tectonics
that transformed the basin’s normal boundary faults into reverse or overthrust faults. These
events facilitated volcanic intrusions causing intense metamorphism of the organics.
The Lower Saxony Basin contains two organic-rich shale source rocks - - the restricted
marine Lower Toarcian (Jurassic) Posidonia Shale that underlies most of the basin, and the
Early Cretaceous (Berriasian) lacustrine-deltaic Wealden Shale that underlies the western part
of the basin (west of the Weser River). The generalized stratigraphic column for the Triassic to
Tertiary interval in the Lower Saxony Basin is provided on Figure XIII-14.8
We mapped a 3,750-mi2 prospective area for the Posidonia Shale in the Lower Saxony
Basin, containing: (1) a 1,590-mi2 oil prospective area (Ro of 0.7% to 1%) along the north
eastern border of the basin; (2) an adjoining 770-mi2 wet gas/condensate prospective area (Ro
1% to 1.3%); and (3) a 1,390-mi2 dry gas prospective area (Ro >1.3%) in the deeper
southwestern portion of the basin, Figure XIII-15. We also mapped a smaller 720-mi2 oil
prospective area for the shallower Wealden Shale in the Lower Saxony Basin, Figure XIII-16.
In addition to the two shale formations addressed in this resource assessment, a series
of other shale gas formations exist in Germany, particularly the Lower Carboniferous Visean
and Westphalian coaly shales. However, these shales, while thick, thermally mature for gas
and buried at acceptable depths of 1,000 to 5,000 m, have TOC values of less than 2%.9 Thus,
these shale formations have not been included in our resource assessment.
In addition, organic-rich mudstones occur in the Upper Permian Stassfurth Carbonate

Formation in the eastern part of the North Sea-German Basin in southern Brandenburg. The
Ca2 shale interval in this formation occurs at a depth of 3,800 to 4,000 m, has a thermal
maturity of over 2% Ro, and contains a mixed Type II/III kerogen. However the shale formation
is thin (6m) and has a low TOC content of 0.2% to 0.8%.9 As such, this shale has also not been
included in our resource assessment.
June, 2013 XIII-19

Figure XIII-14. Generalized Stratigraphic Column for the Lower Saxony Basin.
Source: Kockel, 1994.
June, 2013 XIII-20

Figure XIII-15. Prospective Area of the Posidonia Shale, Lower Saxony Basin, Germany.
Source: ARI, 2013.
Figure XIII-16. Prospective Area of the Wealden Shale, Lower Saxony Basin, Germany.
Source: ARI, 2013.
June, 2013 XIII-21

Jurassic (Toarcian) Posidonia Shale. The depth to the Posidonia Shale ranges from
3,300 feet to 16,400 feet, with an average depth in the oil prospective area of 8,000 feet, an
average depth in the wet gas/condensate prospective area of 11,500 feet, and an average
depth in the dry gas prospective area of 14,500 feet. Figure XIII-17 provides a north to south
cross-section through the center of the Lower Saxony Basin, illustrating the sequence of
complex faults and the thrust features common to the Posidonia Shale. (The location of the
north to south cross-section, A to A’, is provided in Figure XIII-10.) The shale interval in the
prospective area is moderate in thickness, with an organic-rich gross thickness of 100 feet and
a net shale thickness of 90 feet. Organic matter in the Posidonia Shale is Type II marine
kerogen with a TOC that averages 8%, Figure XIII-18. The outer portion of the basin area is in
the oil window, with the central, deeper areas of the Posidonia Shale in the wet gas/ condensate
and dry gas windows, Figure XIII-15.
Figure XIII-17. Lower Saxony Basin North to South Cross Section, A to A’
Source: Kockel, 1994.
Cretaceous (Berriasian) Wealden Shale. The prospective area for the Wealden Shale
is thermally mature for oil generation. The prospective area was defined by the depositional
and depth limits of the Wealden Shale within the Lower Saxony Basin. In the prospective area,
the depth of the Wealden Shale ranges from 3,300 feet to 10,000 feet, averaging 6,000 feet.
The Wealden Shale has a gross organic-rich shale interval of 112 feet and 75 feet of net shale
thickness8. The TOC in the Wealden Shale is highly variable, ranging from 1% to 14%,
averaging 4.5% in the prospective area, Figure XIII-18. Thermal maturity ranges from 0.7% to
1.0% Ro, placing the Wealden Shale in the oil window.8
June, 2013 XIII-22

Figure XIII-18. Total Organic Content, Posidonia and Wealden Shales, Lower Saxony Basin
Jurassic Posidonia Shale. We calculate that the prospective area of the Posidonia
Shale in the Lower Saxony Basin has resource concentrations of 56 Bcf/mi2 in the dry gas
window, 44 Bcf/mi2 of wet gas and 4 million barrels/mi2 of condensate in the wet gas and
condensate window, and 13 million barrels/mi2 of oil in the oil window. Within the prospective
area, the Posidonia Shale contains 78 Tcf of risked gas in-place, with 17 Tcf as the risked,
technically recoverable shale gas resource (including associated gas), Table XIII-5. In addition,
the Posidonia Shale contains 11 billion barrels of risked shale oil in-place, with 0.5 billion barrels
as the risked, technically recoverable shale oil resource, Table XIII-6.
Cretaceous Wealden Shale. The 720-mi2 prospective area of the Wealden Shale in the
Lower Saxony Basin has an oil resource concentration of 10 million barrels/mi2. The risked oil
in-place is 3 billion barrels, with 0.1 billion barrels as the risked, technically recoverable shale oil
resource, Table XIII-6. The oil prospective area of the Wealden Shale also contains in-place
and risked, technically recoverable associated shale gas of 2 Tcf and 0.1 Tcf respectively.
June, 2013 XIII-23

3.5 Recent Activity
ExxonMobil has been the lead company active in the Lower Saxony Basin of Germany.
The company has drilled a series of test wells on its exploration leases, at least three of which
are reported to be testing shale gas potential. Starting in 2008, the company drilled the
Damme 2/2A and Damme 3 test wells on its Munsterland concession and the Oppenwehe 1
exploration well on its Minden concession. In late 2010, the company spudded the
Niederzwehren test well on its Schaumberg permit. After drilling these test wells, ExxonMobil
halted operations in the province following the passage of a moratorium on hydraulic fracturing.
Realm Energy obtained a small, 25-square mile shale gas exploration permit in West
Germany. The company plans to explore the oil and gas potential in the Posidonia and
Wealden shales underneath its acreage. Realm’s concession is valid for three years and does
not require well drilling, but does provide the company with data from the 21 wells drilled on its
acreage in past years.
BNK Petroleum has leased approximately 3,745 square miles for shale, CBM and tight
gas sand exploration in West and Central Germany. The company has yet to drill on any of its
properties, but reports “targeting shale formations,” most likely the Posidonia and Wealden
shales. Most of its concessions are not near areas with previously defined shale gas potential,
suggesting the company is pursuing a wildcatting approach in Germany. To date, the company
has not provided details of its drilling plans.
After a lengthy period of study, the German government issued, in late February 2013,
draft legislation what would allow the development of shale and the use of hydraulic stimulation
(fracturing) under environmental safeguards.
June, 2013 XIII-24

4. WEST NETHERLAND BASIN: NETHERLANDS
4.1 Introduction
The West Netherland Basin (WNB) is located in the southwestern portion of the
Netherlands, extending into the offshore, Figure XIII-19. The basin is bounded in the south by
the London-Brabant Massif and on the north by the Zandvoort Ridge. In the south-east, the
WNB merges with the Ruhr Valley Graben. The West Netherlands Basin is part of a series of
Late Jurassic to Early Cretaceous trans-tensional basins of Western Europe.
Figure XIII-19. Outline and Depth Map for West Netherland Basin, Netherlands
Source: ARI, 2013
June, 2013 XIII-25

For the West Netherland Basin, we estimate risked in-place shale gas of 151 Tcf, with
26 Tcf as the risked, technically recoverable shale gas resource, Table XIII-7. In addition, we
estimate risked in-place shale oil of 59 billion barrels, with 2.9 billion barrels as the risked,
technically recoverable shale oil resource, Table XIII-8.
Table XIII-7. Shale Gas Reservoir Properties and Resources of West Netherland Basin, Netherlands
West Netherlands
Basin/Gross Area 2
Basic Data
(2,750 mi )
Shale Formation Epen Geverik Member Posidonia
Geologic Age U. Carboniferous U. Carboniferous L. Jurassic
Depositional Environment Lacustrine Marine Marine
2
Prospective Area (mi ) 1,460 860 2,320 850 170
Physical Extent

Thickness (ft)
Net 450 450 135 90 90
Interval 3,300 - 10,000 10,000 - 15,500 5,000 - 16,400 3,300 - 9,000 9,000 - 12,500
Depth (ft)
Average 8,500 12,500 11,000 6,500 10,500
Reservoir Pressure Mod. Overpress. Mod. Overpress. Mod. Overpress. Mod. Overpress. Mod. Overpress.
Properties
Reservoir
Average TOC (wt. %) 2.4% 2.4% 4.0% 6.0% 6.0%

Clay Content Medium Medium Low/Medium Low/Medium Low/Medium
Gas Phase Assoc. Gas Wet Gas Wet Gas Assoc. Gas Wet Gas
Resource
2
Risked GIP (Tcf) 39.8 53.9 50.6 3.9 2.9
Table XIII-8. Shale Oil Reservoir Properties and Resources of West Netherland Basin, Netherlands
West Netherlands
Basin/Gross Area 2
Basic Data
(2,750 mi )
Shale Formation Epen Geverik Member Posidonia
Geologic Age U. Carboniferous U. Carboniferous L. Jurassic
Depositional Environment Lacustrine Marine Marine
2
Prospective Area (mi ) 1,460 860 2,320 850 170
Physical Extent

Thickness (ft)
Net 450 450 135 90 90
Interval 3,300 - 10,000 10,000 - 15,500 5,000 - 16,400 3,300 - 9,000 9,000 - 12,500
Depth (ft)
Average 8,500 12,500 11,000 6,500 10,500
Reservoir Pressure Mod. Overpress. Mod. Overpress. Mod. Overpress. Mod. Overpress. Mod. Overpress.
Properties
Reservoir
Average TOC (wt. %) 2.4% 2.4% 4.0% 6.0% 6.0%

Clay Content Medium Medium Low/Medium Low/Medium Low/Medium
Oil Phase Oil Condensate Condensate Oil Condensate
Resource
2
OIP Concentration (MMbbl/mi ) 60.4 19.0 6.1 13.2 4.1
Risked OIP (B bbl) 39.7 7.4 6.3 5.0 0.3
June, 2013 XIII-26

The West Netherland Basin (WNB), while commonly described as a single structural
entity, contains a series of smaller structural elements bounded by long, northwest-trending
faults. The complex tectonic features present in this basin are illustrated by the northeast to
southwest cross-section (A-A’) located on the far western portion of the basin, Figure XIII-20.10
(The location of the cross-section is shown on Figure XIII-19.)
Figure XIII-20. Cross-Section A to A’, Western Portion of West Netherland Basin.
Source: van Balen, R.T. et al., 2000.
The WNB contains a series of prospective shale formations, including two Carboniferous
(Namurian) shale formations, the Epen Formation and the Geverik Member, plus the Lower
Jurassic (Toarcian) Posidonia Shale, Figure XIII-21.10 Based on analysis of core and cutting
samples from the deep Geverik-1 exploration well, located in the southeastern part of the basin,
the Epen Shale contains Type III kerogen, with lacustrine-deltaic deposition, while the Geverik
Shale contains Type II kerogen, with open-marine deposition. The Posidonia Shale contains
Type II marine kerogen.
Additional shale source rocks exist in the WNB, particularly in Late Jurassic and Late
Carboniferous intervals. However, these shales are considered of minor importance or contain
significant inter-beds of coal.10 Thus, these shales have been excluded from the quantitative
resource assessment. An excellent, comprehensive review of the shale formations of the
Netherlands is provided in the TNO report entitled, “Inventory Non-Conventional Gas” by A.G.
Muntendam-Bos et al., 2009.11
June, 2013 XIII-27

Figure XIII-21. Stratigraphic Section for West Netherland Basin.
Numerical ages in the Namurian and Jurassic to Tertiary are after Harland et al. (1990), in the Triassic and Permian after
Menning (1995), and in the Westphalian and Stephanian after Lippolt et al. (1984).
Source: van Balen, R.T. et al., 2000.
June, 2013 XIII-28

For the Epen Shale, we have mapped a 1,460-mi2 area prospective for oil and associated
gas and a smaller 860-mi2 area prospective for wet gas and condensate, Figure XIII-22. For the
Geverik Shale, we have mapped a 2,320-mi2 area prospective for wet gas and condensate,
Figure XIII-23. For the Posidonia Shale, we have mapped a 850-mi2 area prospective for oil
and a smaller 170-mi2 area prospective for wet gas and condensate, Figure XIII-24.
Carboniferous (Namurian) Epen and Geverik Shales. As discussed above, the

Carboniferous (Namurian) sequence in the Netherlands contains two prospective shale
formations, the Epen and Geverik. The key technical paper by R. T. van Balen, et al. (2000)10
and data provided in the more recent TNO report (Muntendam-Bos, A.G., et al., 2009)11 were
used to establish prospective areas including information on depth, thermal maturity and
thickness for these two shale gas formations.
Depth to the Epen Shale ranges from 3,300 feet to 16,400 feet, averaging 8,500 feet in
the oil prospective area and averaging 12,500 feet in the wet gas/condensate prospective area.
In the west-central portion of the WNB, the depth of the Epen Shale is below 5,000 m. As such,
this portion of the basin has been excluded from the prospective area. The Epen Shale’s oil
prospective area has a thermal maturity of 0.7% to 1.0% Ro in the southern portion of the basin
and along the shallower basin edges. In the center of the basin, the thermal maturity of the
shale ranges from 1.0% to 1.3% Ro, placing the shale in the wet gas/condensate window. The
Epen Shale is very thick, with a gross organic-rich thickness of 1,500 feet and a net thickness of
450 feet, based on an estimated 30% net to gross ratio. Total organic content ranges from 1%
to 15%, averaging 2.4%. The shale is over-pressured and because of its lacustrine deposition
has medium assumed clay content.
Depth to the underlying Geverik Shale ranges from 5,000 feet to 16,400 feet, averaging
11,000 feet in the wet gas/condensate prospective area. As for the Epen Shale, the deep west-
central portion of the basin below 5,000 m has been excluded. The Geverik Shale has an
organic-rich gross interval of 225 feet, with an estimated 135 feet of net pay, based on an
estimated 60% net to gross ratio. The thermal maturity of this deeper shale ranges from 1.0%
to 1.3%, placing the Geverik Shale in the wet gas and condensate window. Total organic
content of the shale ranges from 2% to 7%, averaging 4%. The shale is over-pressured and
due to its marine deposition has low to medium assumed clay content.
June, 2013 XIII-29

Figure XIII-22. Prospective Areas for Epen Shale, West Netherland Basin.
Source: ARI, 2013
Figure XIII-23. Prospective Areas for Geverik Shale, West Netherland Basin.
Source: ARI, 2013
June, 2013 XIII-30

Figure XIII-24. Prospective Area for Posidonia Shale, West Netherland Basin.
Source: ARI, 2013
Jurassic (Toarcian) Posidonia Shale. The shallower Posidonia Shale overlies the
Carboniferous Epen and Geverik shales in the West Netherland Basin. The shale has reservoir
properties similar to the Posidonia Shale in the Lower Saxony Basin of Germany, discussed
previously. A total of 140 wells have been drilled through the Posidonia Shale, providing
valuable data and control for this resource assessment.
The depth of the Posidonia Shale ranges from 3,300 feet on the margins of the
prospective area to 12,500 feet in the basin center, averaging 6,500 feet in the oil prospective
area and 10,500 feet in the wet gas/condensate prospective area. In the shallower portions of
the prospective area, the Posidonia Shale has a thermal maturity of 0.7% to 1.0% Ro (oil
window). In the deeper basin center, Posidonia Shale has a thermal maturity of 1.0% to 1.3%
Ro (wet gas/condensate window). The gross organic-rich shale interval is 100 feet, with 90 feet
of net pay. The shale contains Type II marine kerogen with a TOC that ranges from less than
1% to a maximum of 16%, averaging 6%. The formation is slightly over-pressured with low to
medium clay content.
June, 2013 XIII-31

Carboniferous (Namurian) Epen Shale. We estimate that the prospective area of the
Epen Shale in the West Netherland Basin contains risked shale gas in-place of 94 Tcf, with 15
Tcf as the risked, technically recoverable shale gas resource (including both wet shale gas and
associated shale gas). In addition, we estimate that the Epen Shale in this basin has risked in-
place shale oil/condensate of 47 billion barrels, with 2.4 billion barrels as the risked, technically
recoverable shale oil resource.
Carboniferous (Namurian) Geverik Shale. We estimate that the prospective area of

the Geverik Shale in the West Netherland Basin contains risked shale gas in-place of 51 Tcf,
with 10 Tcf as the risked, technically recoverable shale gas resource. In addition, we estimate
that the Geverik Shale in this basin has risked in-place shale oil/condensate of 6 billion barrels,
with 0.3 billion barrels as the risked, technically recoverable shale oil resource.
Jurassic (Toarcian) Posidonia Shale. We estimate that the prospective area of the
Posidonia Shale in the West Netherland Basin contains risked shale gas in-place of 7 Tcf, with 1
Tcf as the risked, technically recoverable shale gas resource (including both wet shale gas and
associated shale gas). In addition, we estimate that the Posidonia Shale in this basin has risked
in-place shale oil/condensate of 5 billion barrels, with 0.3 billion barrels as the risked, technically
recoverable shale oil resource.
4.5 Recent Activity
Three companies have acquired shale gas and oil leases in the Netherlands. Cuadrilla
Resources and DSM Energie have leases in the West Netherland Basin while Queensland Gas
Company (now part of BG Group) has leases in north-central Netherlands. Beyond the earlier
exploratory wells that helped define the shale resources in the West Netherland Basin, we are
not aware of any recent shale gas or oil development in the Netherlands.
June, 2013 XIII-32

5. SCANDINAVIA
5.1 Introduction
The Cambrian-Ordovician (Lower Paleozoic) Alum Shale underlies significant portions of

Scandinavia, including Sweden, Denmark and potentially Norway, Figure XIII-25. However, in
much of this area the Alum Shale is shallow, thin and immature. The outline of the Alum Shale
depositional area examined by this shale resource assessment is bounded on the west by the
Caledonia Deformation Front and outcrops of the Alum Shale. The basin is bounded on the
east by the inferred depositional limits of the Lower Paleozoic and on the south by the 2.7% (Ro)
thermal maturity contour.
Figure XIII-25. Outline Map for Alum Shale of Scandinavia
Source: ARI, 2013
June, 2013 XIII-33

For the Alum Shale in Sweden, we estimate risked in-place shale gas of 49 Tcf, with 10
Tcf as the risked, technically recoverable shale gas resource. For the Alum Shale in Denmark,
we estimate risked in-place shale gas of 159 Tcf, with 32 Tcf as the risked, technically
recoverable shale gas resource, Table XIII-9. A modest volume of shale gas may exist in the
Oslo Graben of Norway. However, there is not sufficient data to reliably estimate the size of
Norway’s shale resource. Our shale gas resource estimates are preliminary and have been
highly risked, awaiting more definite information from industry’s planned exploration efforts,
particularly in Denmark.
Table XIII-9. Shale Gas Reservoir Properties and Resources of Scandinavia
The depositional setting of the Cambrian-Ordovician Alum Shale in southern Sweden

and northern Denmark has been mapped in the technical literature. Outcrops of the Alum Shale
exist along the Caledonian Mountain belt along the Sweden-Norway border and in southern
Sweden. Figure XIII-26 provides the stratigraphic position of the Alum Shale in Sweden. Figure
XIII-27, compiled from a variety of sources, indicates the presence of the Alum Shale in the Oslo
Graben of Norway and on Gotland in Sweden. While the stratigraphy of the Alum Shale has
only moderate variation in central Sweden, the structural setting becomes complex along the
Caledonian Front in Norway, western Sweden and northern Denmark.
June, 2013 XIII-34

Figure XIII-26. Stratigraphic Column for Cambrian Through Permian, Sweden
Source: Thickpenny, A, 1984.
Figure XIII-27. Generalized Lower Paleozoic Stratigraphy for the Scandinavia-Baltic Region.
Modified from Bjørlykke (1974), Vlierboom et al. (1986), Thickpenny and Leggett (1987), Brangulis et al. (1993), Zdanaviciute
and Bojesen-Kofoed (1997), Bondar et al. (1998), Sivhed et al. (2004).
Source: Pedersen, J.H., 2007
June, 2013 XIII-35

The Alum Shale contains a series of distinct lithotypes, as shown by the cross-section of
data from selected outcrop areas in southern Sweden and the Caledonian Front, Figure XIII-28.
Two of these lithotypes are important shale source rocks. The first is the black organic-rich
mudstone with TOC of 5% to 7% in the Middle Cambrian, reaching up to 20% in the Upper
Cambrian.12 This interval contains 30% to 40% illite clay, and +25% quartz, plus pyrite and K-
feldspar. The second is the black and gray (dark brown) inter-bedded mudstone, with TOC of
about 5%. Grey mudstone, bituminous limestone and thin sandstone, siltstone lamina
constitute the remaining lithotypes. The Alum Shale was deposited in a relatively shallow,
anoxic marine environment.
Figure XIII-28. Comparative Middle and Upper Cambrian Stratigraphic Columns for Selected Outcrop Areas
in Scandinavia
Source: Thickpenny, 1984
June, 2013 XIII-36

Except for outcroppings and data from shallower wells, rigorous data on the properties of
the Alum Shale are scarce. ARI has identified an 8,100-mi2 prospective area where the shale is
deposited below 3,300 feet at depth and where the thermal maturity data indicate the shale is
inside the gas window, Figure XIII-29. The bulk of the Alum Shale prospective area is in
northern Denmark, encompassing 5,680 mi2. The remaining 2,120-mi2 prospective area for the
Alum Shale is in southern Sweden.
Figure XIII-29. Prospective Areas for Alum Shale in Denmark and Sweden.
Source: ARI, 2013.
The outlines of the Alum Shale prospective area are based on thermal maturity of 2.7%
Ro on the south and the 3,300-foot depth limit (plus outcrops of the shale in the Skane area) on
the north. Data from well drilling by Shell provided information on the depth of the Alum Shale
in southern Sweden.
June, 2013 XIII-37

The depth of the Alum Shale ranges from 3,300 feet in southern Sweden to 15,000 feet
in northern Denmark. We have assumed a depth of 5,000 feet for the dry gas prospective area
in Sweden and a depth of 13,500 feet for the two dry gas prospective areas in Denmark.
The thickness of the Alum Shale generally ranges from 20 to 60 m, but can reach 80 to
100 m in the Skane area and 200 m or more in repeated sequences due to multiple thrust faults
along the Caledonian Front.13,14 The Alum Shale gross thickness is relatively constant, ranging
from 250 to 300 feet in the prospective area, Figure XIII-29. We have assumed a relatively high
net to gross ratio of 80%, giving a net shale thickness of 200 feet. Since we include both the
high TOC black shale and the lower TOC dark brown shale in our net pay, we use an average
TOC of 7.5%. The Alum Shale formation is normally pressured, has moderately high clay
content and is structurally complex, making the shale a high risk play.
For the Alum Shale in Sweden, we calculate a resource concentration of 77 Bcf/mi2.

Based on this and a 2,120-mi2 prospective area, we estimate risked shale gas in-place of 49
Tcf, with 10 Tcf as the risked, technically recoverable shale gas resource, Table XIII-9.
For the Alum Shale in Denmark, we calculate a resource concentration of 110 Bcf/mi2.
Based on this and a 5,980-mi2 prospective area, we estimate risked shale gas in-place of 159
Tcf, with 32 Tcf as the risked, technically recoverable shale gas resource, Table XIII-9.
Additional investigation and data are required to establish the shale resources of
Norway, particularly in the deeper Oslo Graben.
5.5 Recent Activity
The Alum Shale has a rich exploration history that dates back to the 1600s with the
extraction of alum salt. Subsequently, the Alum Shale was mined for oil shale in 1930 to 1950
and later as a source for uranium. 15
Of the numerous companies that have applied for exploration licenses in Sweden, Shell
Oil has been the most active. Shell drilled three wells on their 400-mi2 lease area in the Skane
Region of Southern Sweden between 2008 to 2011, Figure XIII-30. However, according to
information from the Geologic Survey of Denmark and Greenland, “They drilled three wells, but
June, 2013 XIII-38

found it uneconomic.”15 Other companies with Alum Shale exploration licenses in Sweden are
Gripen Gas and Energigas, with twelve licenses in south-central Sweden. However, Gripen
Gas is pursuing biogenic source gas with a series of exploration wells in the shallow portion of
the Alum Shale.
In Denmark, Total E&P Denmark B.V. is exploring for deep shale gas in two license
areas in northern Denmark. Total submitted the work program for the first exploration well,
Vendsyssel-1, in late 2012 and plans a six year exploration program to determine whether their
lease areas contain sufficient shale gas resources to warrant further development.
Figure XIII-30. Shell Oil License Areas, Alum Shale, Sweden
Source: ARI, 2013.
June, 2013 XIII-39

REFERENCES
1 Chungkham, P., 2009. “Paris Basin offers opportunities for unconventional hydrocarbon resources.” first break 27 (January
2009).
2 Perrodon, A., and J. Zabeki, 1991. “Paris Basin.” In Interior Cratonic Basins, AAPG Memoir 51, pp. 633-639.
3 Monticone, B., 2012. “Shale Oil Potential of the Paris Basin, France.” Search and Discovery Article #10384 (2012) Posted
January 9, 2012, Adapted from oral presentation at AAPG International Conference and Exhibition, Milan, Italy, October 23-
26, 2011.
4 Delmas, J., Houel, P. and Vially, R., 2002. Paris Basin Petroleum Potential. IFP Regional Report. Institut Français du Pétrole,
Rueil Malmaison
5 Elixir Petroleum
6 Mascle, Alain, and Roland Vially, 1999. “The petroleum systems of the Southeast Basin and Gulf of Lion (France).” Geological
Society, London, Special Publications 156, no. 1 (January 1, 1999): 121-140.
7 Vially, R., 2010. “Shale Gas in the South-East Basin” presented at the Global Shale Gas Summit, Warsaw, Poland, July 2010.
8 Kockel, Franz, Hermann Wehner, and Peter Gerling, 1994. “Petroleum Systsms of the Lower Saxony Basin, Germany.” In The
Petroleum System-from Source to Trap, 573-586. AAPG Memoir 60, 1994.
9 Hartwig, Alexander, Sven Könitzer, Bettina Boucsein, Brian Horsfield, and Hans-Martin Schulz, 2010. “Applying classical shale
gas evaluation concepts to Germany--Part II: Carboniferous in Northeast Germany.” Chemie der Erde - Geochemistry 70, no.
Supplement 3 (August 2010): 93-106.
10 van Balen, R.T. et al., 2000. “Modelling the hydrocarbon generation and migration in the West Netherlands Basin, the
Netherlands.” Geologie en Mijnbouw / Netherlands Journal of Geosciences 79 (1): 29-44 (2000)
11 Muntendam-Bos, A.G., et al., 2009. “Inventory Non-Conventional Gas.” TNO report TNO-034-UT-2009-00774/B, 03
September.
12 Armands, G., 1972. “Geochemical Studies of Uranium, Molybdenum, and Vanadium in a Swedish Alum Shale.” Stockholm
Contr. Geology 27, pp. 1-148.
13 Dahl, J., et al., 1989. “Alum Shale Bitumen Maturation and Migration: Implications for Gotland’s Oil”, Journal of Petroleum
Geology, 12 (4), October, pp. 465-476.
14 Buchardt, B., 1990. “Reflectance of Vitrinite-Like Macerals as a Thermal Maturity Index for Cambrian-Ordovician Alum Shale,
Southern Scandinavia.” The American Association of Petroleum Geologists Bulletin, vol. 74, no. 4. April, p. 394-406.
15 Schovsbo, N. 2011. Article entitled “Deep History: Scandinavia's Alum Shale” on presentation provided to delegates at Shale
Gas Results in Europe 2011 in Warsaw, Poland, www.naturalgaseurope.com, June 29th, 2011.
June, 2013 XIII-40

XIV. Moroccco (Including Weestern Sahara annd Mauritania) EIA/ARI W
XIV. MOROC
M CCO (INCCLUDING WESTERN
W N SAHARA
A AND MAU
URITANIA)
SUMMA
ARY
In
n addition to
o large accu
umulations of
o Late-Creta
aceous imm
mature oil sh
hale (keroge
en) at
depths suitable for surface
s ng1, Morocco and its tw
minin wo neighborin
ng countriess, Mauritania
a and
Western Sahara, als
so possess organic-rich
o Silurian- an
nd Devonian-age shale g
gas and sha
ale oil
potential in the Tindo
ouf and Tadlla basins, Figure XIV-1. Mapping a
and resource
e characterizzation
of these shales is challenging
c because reg
gional deforrmation, ero
osion and su
ubsidence o
of the
shale deposits have led to their discontinuou
d us and comp
plex present day distribu
ution.
Figure XIV-1. Shale Gas

G Basins off Morocco, Weestern Saharaa and Mauritannia
Source: ARI, 2013.
June, 2013 XIV-1

ARI
A estimates that the Tiindouf and Tadla
T basinss contain rissked shale g
gas in-place of 95
Tcf, with 20 Tcf of ris
sked, technic gas resourcces, Table XIV-1. In add
cally recoverable shale g dition,
o basins con
these two ntain risked shale oil/condensate in--place of 5 b
billion barrells, with 0.2 b
billion
barrels of
o risked, technically reco
overable sha
ale oil/conde
ensate resou
urces, Table XIV-2.
Tablee XIV-1. Reseervoir Properrties and Shaale Gas Resoources of Moorocco, Saharra Desert andd
Mauritania
M
Tindouf Taadla
Basin/Gross Arrea 2
Basic Data
2
(77,0000 mi ) (2,8000 mi )
Shale Formatioon L. Silurian L. Siilurian
Geologic Agee L. Silurian L. Silurian
onment Maarine Maarine
2
Physical Extent
Organiccally Rich 6
60 60 6
60 3
328
Thickkness (ft)
Net 5
54 54 5
54 197
Intervall 6,600 - 11,000 6,600 - 13,000 6,600 - 14,000 3,280 - 9,840
Depthh (ft)
Averagee 9,0000 10,0000 11,000 6,560
Mood.
Reseervoir Pressure Mod. Overpress. Mod. Ovverpress. Unde rpress.
Properties
Reservoir
Overppress.
Averaage TOC (wt. %) 4.00% 4.00% 4.00% 2.0%
Thermmal Maturity (% Ro o) 0.885% 1.155% 2.880% 2.225%
Clay Content Meddium Meddium Meddium Me dium
Gas Phase
P Assocc. Gas Wet Gas Dry Gas Dryy Gas
Resource
2
GIP Concentration
C (Bcff/mi ) 6
6.8 188.9 222.0 499.0
Riskeed GIP (Tcf) 2
2.7 177.7 544.5 200.5
Riskeed Recoverable (Tccf) 0
0.3 3..5 133.6 3
3.1
Tablle XIV-2. Reservoir Propeerties and Shale Oil Resouurces of Morrocco, Saharra Desert andd
Mauritania
M
Tindouf
Basin/Gross Areea 2
Basic Data
(77,000 mi )
Shale Formatioon L. Silurian
Geologic Agee L. Silurian
onment Marine
2
Prosppective Area (mi ) 2,0020 4,6670
Physical Extent
Organiccally Rich 6
60 6
60
Thickkness (ft)
Net 5
54 5
54
Interval 6,600 - 11,000 6,600 - 13,000
Depthh (ft)
Averagee 9,0000 10,,000
Mood.
Reserrvoir Pressure Mod. Ovverpress.
Properties
Reservoir
Overppress.
Averaage TOC (wt. %) 4.00% 4.0%
Thermmal Maturity (% Roo) 0.885% 1.115%
Clay Content Meddium Meddium
Oil Phase O
Oil Cond ensate
Resource
2
OIP Concentration
C (MM
Mbbl/mi ) 7.9 1.7
Riskeed OIP (B bbl) 3.2 1.6
Riskeed Recoverable (B bbl) 0.16 0..08
June, 2013 XIV-2

INTROD
DUCTION
The
T primary shale resou
urce on Morrocco, Mauriitania and W
Western Sah
hara is the lower
Silurian “Hot
“ Shale,” which cons
sists of thin but
b very orga
anic-rich layyers of marin
ne organic m
matter
deposited
d during a re
egional anox
xic event. Data
D from we
ells drilled accross the co
ountry confirm
m the
presence
e of organic
c-rich Silurian shales, although n
not always within the current forrmally
hed boundaries of hydroc
establish carbon basin
ns.
The
T presenc
ce of a thick Silurian section,
s obsserved in m
many Morocccan hydroca
arbon
basins, does
d not gu
uarantee the
e presence of organic-rrich shale, a
as areas that were reg
gional
highs during the early Silurian may not have received orrganic-rich sediments, Figure XIV-2..2
Accurately
A identifying pro
omising sha
ale basins an
nd estimatin
ng their reso
ource potenttial in
such geo
ologically co
omplex area
as requires significant a
amounts of data, which
h are not w
widely
available
e in Morocco
o and its ne
eighboring countries
c ecause of liimited well drilling and data
be
confidenttiality. As th
his data beco
omes more publically avvailable, a m
more rigorou
us shale gass and
oil resource assessm
ment of Moro
occo may be
e possible.
This
T report as
ssesses the two basins which appe ar to have th
he highest p
gas and oil resources based on publically av
vailable data
a: the Tindou
uf (Zag) Bassin in the sou
uth of
Morocco (extending into Algeria
a, Western Sahara,
S and
d Mauritania
a), and the ccentral Moro
occan
asin.
Tadla Ba
June, 2013 XIV-3

Figure XIV-2.. Sedimentaryy Depositional Environmentt in Morocco, Ordovician-Deevonian2
June, 2013 XIV-4

1. TINDOUF
T BASIN
B
1.1 Geologic
G Se
etting
The
T Tindouf Basin is th
he westernm
most of the major Nortth African P
Paleozoic ba
asins,
mi2 area in Mo
covering a 31,660-m orocco, Wes
stern Sahara
a and Mauritania. The b
basin is bou
unded
by the Atlas
A Mounta
ains and Oug
garta Arch to
t the north and the Re
eguibate Massif in the ssouth.
h once coverred unconforrmably by a blanket of M
Although Mesozoic to early Tertiarry sedimentss, the
Paleozoic now crop
ps out over much of the region. ouf Basin iss an asymm
The Tindo metric
on with a brroad gentle southern
depressio s flank and a ste
eeply dippin
ng, more stru
ucturally com
mplex
northern margin.
The
T as a large sediment depocenterr from late
Tindouff Basin wa e Ordovicia
an to
Carbonife
erous time, accumulatin
ng multiple layers of org
ganic-rich S
Silurian, Devvonian (Frassnian)
and Carb ales, Figure XIV-3.3 Ho
boniferous (Visean) sha owever, thesse deposits were affecte
ed by
the Herc
cynian deforrmation and
d the prospe
ectivity of the
ese shale fo
ormations is uncertain. High
heat flow
w through the basin caused the Tind
douf Basin sshales to re
each high ma
aturity during the
Carbonife
erous. Uplifft and erosio
on of these shales
s may h
have caused
d significant underpressu
uring,
as the shales were not buried deep enoug
gh to replen
nish hydroca
arbons dissipated during
g the
Hercynia
an orogeny.
This
T report fo
ocuses on th
he Lower Silu
urian “Hot S hale,” which
h has greate
er data availa
ability
and high
her confidenc
ce of remain
ning gas saturation in tthis shale in
nterval. Thro
ough mapping of
depth an
nd thermal maturity,
m 70-mi2 prosp
we have identified a 19,07 pective area
a in the Moro
occo,
Mauritania and Wes
stern Sahara
a portion off the Tindou
uf Basin. Th
he northern boundary o
of the
prospective area is the 1,000-m n the upthrusted northern portion o
meter depth contour on of the
basin, Fiigure XIV-4..4 The southern bound ermal maturity contour.. The
dary is the 0.7% Ro the
eastern boundary
b is the Algeria Border.
B
While
W the drillling density in the basin ely low, with an average
n is extreme e of only one
e well
00 mi2, the data sugg
per 5,00 gest that orrganic-rich, basal Silurrian shales were depo
osited
out the basiin.2
througho Additio
onal well and seismic data have been colle
ected by va
arious
internatio nies in partnership with Moroccan o il company, ONHYM, bu
onal compan ut these datta are
not yet in
n the public domain.
d
June, 2013 XIV-5

X
XIV. Morocco (Including Western Sahara and Mauritania) EIA/AR
RI World Shale Gas and Shale Oil Resourcce Assessment
Figure XIV-3. Tindouf

T Basin Strratigraphic Figure XIV-4.
X Tindouf Baasin Cross Sectioon
Column
A’ A
Silurian
“Hot Shale””
Soource: Boote, 2002.
SSource: Longreach Petroleum

P Corporate Presentation,
22010
JJune, 2013 XIV-6

X
1.2 Reservoir
R Properties
Within
W the Tin
ndouf Basin’’s prospectiv
ve area, the depth to the
e Silurian “H
Hot Shale” ra
anges
from 6,6
600 to 14,00
00 ft, Figure
e XIV-5. Present
P day TOC conte
ent ranges from 1% to
o 7%,
averaging 4%. It is
s likely that the TOC content
c was higher duriing the time
e of hydroca
arbon
generatio
on, due to th
he basin’s very
v ermal maturrity.5 Therm
high the mal maturity increases tto the
north acrross the bas t over 3% Ro.4 Organic-rich net sshale thickne
sin, ranging from 0.7% to ess is
estimated
d at 54 ft, ba he southern fflank of the basin.6
a from a well drilled in th
ased on data
Figure XIV-5.. Tindouf Basiin Prospectivee Area, Moroccco, Western S

Sahara and Maauritania
Source: ARI, 2013
June, 2013 XIV-7

1.3 Resource
R Assessmen
A nt
We
W estimate that the wett and dry ga
as prospectivve area of th
he Silurian “Hot Shale” iin the
Morocco, Mauritania
a and Wes
stern Sahara
a portions of the Tind
douf Basin has a reso
ource
mi2.
concentrration of 19 to 22 Bcf/m The oil prospective
e area of the Hot Shale” h
e Silurian “H has a
resource
e concentration of 8 millio mi2 plus asso
on barrels/m ociated gas. While the sshale formation is
organic-rrich, it is thin oncentration..
n, limiting its resource co
Within
W verall 19,020-mi2 prosp
the ov Hot Shale” in the
pective area , the Lowerr Silurian “H
Tindouf Basin
B 0-mi2 area prospective fo
contaiins a 12,380 or dry gas, a 4,670-mi2 area prospe
ective
for wet shale
s gas an ndensate, and a 2,020--mi2 area prrospective fo
nd shale con or shale oil. The
risked sh
hale gas in-p
place for the Tindouf Basin is estima
ated at 75 T
Tcf, with 17 T
Tcf as the rissked,
ble shale ga
as resource. In addition
n, the Tindouf Basin hass an estima
ated 5
billion ba
arrels of sha
ale oil/condensate in-pla
ace, with 0.2
2 billion barre
els as the riisked, techn
nically
recoverable shale oill resource.
1.4 Recent
R Activity
The
T Morocca
an national oil and ga
as compan y, ONHYM, has been
n evaluating
g the
s shale gas potential sin
country’s nce mid-2010. It has p
plans to colle
ect seismic data followe
ed by
the drillin
ng of a shale
e gas explorration well. The
T well is p
proposed to be drilled in
n partnership
p with
San Leo
on Energy (Ireland)
( and Longreac
ch Oil and Gas (Canad
da) on the Zag explorration
license.7
June, 2013 XIV-8

2. TADLA
T BAS
SIN
2.1 Geologic
G Se
etting
The asin is a 2,800-mi2 intra--cratonic bassin located iin central Mo

T Talda Ba orocco withiin the
Moroccan Mesta. The basin contains ne
early 16,500
0 feet of P
Paleozoic th
hrough Cenozoic
sedimenttary strata, Figure
F XIV-6
6. Paleozoic
c rocks dom inate the se
ediments in tthis basin, exxcept
in areas where upliftt has caused their erosion, Figure XIV-7. The
e Talda Basin is bounde
ed by
the Central Massif in
n the north, the
t Atlas Mo
ountains in tthe east, the
e Jebiliet Ma
assif in the ssouth,
and the Rehamna Massif
M in th
he west. The Fkih Be n Salah Fa
ault divides the basin in
nto a
st section, ch
southeas haracterized
d by complex
x tectonics iincluding he
eavy folding and faulting
g, and
a northwest section, with thick ca
arboniferous
s strata and minor, infreq ng.8
quent faultin
As n, regional uplifting du
A in the Tiindouf Basin uring the He
ercynian an
nd Alpine evvents
n, Devonian and Ordov
exposed the Silurian ed and begun to
vician shaless after they had mature
e hydrocarbo
generate ons. While these
t shales uried on the western edge of
s were subssequently bu
the basin
n by approximately 6,50
00 ft of Creta
aceous and Tertiary sed
diments, it iss unlikely tha
at the
shales ge
enerated ad
dditional hydrocarbons after
a reburiall.8 As such,, this basin is at high rissk for
underpre
essuring, alth
hough data are
a not availlable to conffirm this assumption.
The
T 1,670-mi2 prospectiv
ve area of the
t Tadla B
Basin is bou
unded by the
e 1,000-m d
depth
contour, various faullts and the Atlas
A Mounttain range to
o the east, F 8. Little data are
Figure XIV-8
e in the southern portion of the basin where t he prospecttive area is bounded by the
available
apparentt lack of orga
anic-rich Silu
urian strata.
2.2 Reservoir
R Properties
The he Tadla Bassin reaches maximum d

T Lower Silurian “Hot Shale” in th depth west o
of the
0 to 9,840 ft.8
n Salah Fault, ranging from 3,280
Fkih Ben To the
e east, the shale beco
omes
er. Average depth in th
shallowe he prospectiv
ve area is e
estimated att 6,560 ft. W
Where it ha
as not
been ero
oded, the Sillurian sectio
on can reach
h up to 800 ffeet thick, w
with over 300
0 feet of org
ganic-
n shale.9 TOC data ffrom outcrops suggest that the org
rich shale, of which 200 ft is net ganic
content reaches
r 10-12%,10 but deep
d well da
ata from insside the prosspective are
ea indicates TOC
values closer to 2%. The Siluria
an shale is th
hermally hig hly mature o
over the prosspective are
ea; Ro
values off 1.5% to 3%
% place the shale
s in the dry dow.8
d gas wind
June, 2013 XIV-9

X
XIV. Morocco (Including Western Sahara and Mauritania) EIA/ARI W
Figu
ure XIV-6. Tadla Basin
B Stratigraph
hic Column8 Figure XIV-7. Tadlaa Basin Cross Seections8
Lower
Silurian
JJune, 2013 XIV-10

X
Figure XIV-8. Tadla Baasin Prospectiive Area, Moroocco
Source: ARI, 2013
2.3 Resource
R Assessmen
A nt
The
T Silurian “Hot
“ Shale” in the Tadla 670-mi2 prospective area
a Basin’s 1,6 a has a moderate
mi2 dry gas resource
49-Bcf/m r con
ncentration. The basin contains an
n estimated 20 Tcf of rrisked
shale gas w 3 Tcf as the risked, technically
s in-place, with t rrecoverable shale gas re
esource.
2.4 Recent
R Activity
No
N shale gas
s exploration activity has been reportted in the Ta
adla Basin o
of Morocco.
June, 2013 XIV-11

3. SHALE
S RES
SOURCES BY COUNTRY
3.1 Morocco
M
Morocco
M has a 1,670-mi2 dry gas prospective arrea in the Ta
adla Basin a 00-mi2
and an 8,00
dry gas prospective area in the Tindouf Ba
asin. Within
n these two prospective
e areas, Morrocco
has 56 Tcf
T of risked shale gas in
n-place, with
h 12 Tcf as tthe risked, ttechnically re
ecoverable sshale
gas resource.
3.2 Western
W Sa
ahara
T Western Sahara portion of the Tindouf Bassin has a 4,,380-mi2 dryy gas prospe
The ective
area, a 4,670-mi2 wet
w shale gas/condens
g sate prospe 020-mi2 shale oil
ective area, and a 2,0
prospective area. Within
W these prospective areas, Wesstern Sahara
a has an esttimated 39 T
Tcf of
risked dry, wet and
d associated shale ga
as in-place, with 8 Tcff as the rissked, techn
nically
recoverable shale gas resource
e. In additio
on, Western
n Sahara ha
as 5 billion barrels of rrisked
shale oil/condensate
e in-place, with
w 0.2 billion barrels as the risked, techniccally recove
erable
shale oil resource.
3.3 Mauritania
M
Mauritania
M ha 0-mi2 wet sh
as a small 50 hale gas/con
ndensate pro
ospective arrea in the Tin
ndouf
Basin containing only
y minor shalle gas and oil
o resourcess.
REFERE
ENCES
1 Kolonic, S.,
S Sinninghe Daamste, J.S., Botttcher, M.E., Kuyypers, M.M.M., K
Kuhnt, W., Beckmann, B., Scheeder, G., and WWagner,
T., 2002. “Geochemical Characterizatioon of Cenomanian/Turonian Blaack Shales Froom the Tarfaya Basin (SW Moorocco):
Relationshhips Between Paleoenvironmen
P ntal Conditions and
a Early Sulphhurization of Seddimentary Organnic Matter.” Jouurnal of
Petroleumm Geology, vol. 25,
2 no. 3, p. 325--350.
2 Lüning, S.., Craig, J., Loyddell, D.K., Storchh, P., and Fitchees, B., 2000. “LLower Silurian `H
Hot Shales' in North Africa and A
Arabia:
Regional Distribution and Depositional Moodel.” Earth-Science Reviews, vvol. 49, no. 1-4, p. 121-200.
3
Longreachh Petroleum Corporate Presentaation, 2010.
4 wes, D.D., and Traut, M.W., 1998. “Palaeozzoic Petroleum Systems of North Africa.” Geoological
Boote, D..R.D., Clark-Low
Society, London,
L Special Publications 1322, no. 1, p. 7-68..
5 Zag-Bas Draa Basin. Opportunities
O forr Hydrocarbon E & P in Moorocco. ONHYM M, 2010. http://www.onhym.ccom/en/
HYDROC CARBURES/Prosspectivit%C3%A A9sdesBassins/EExplorationR%C33%A9gionale/Onnshore/BasDraaaBasin/tabid/3533/langu
age/en-US
S/Default.aspx?C
Cat=27.
6 Lüning, S., Loydell, D.K., Sutcliffe,
S O., Ait Salem, A., Zaneella, E., Craig, J. and Harpel, D.A
A.T., 2008. “Siluurian - Lower Deevonian
Black Shaales in Morocco: Which are the Organically Richhest Horizons?” Journal of Petrroleum Geology, vol. 23, no. 3, p. 293-
311.
June, 2013 XIV-12

7 San Leon Energy, Corporaate Presentationn, 2010.

8 Jabour, H.
H and Nakayam ma, K., 1988. “Basin Modeling of Tadla Bassin, Morocco, foor Hydrocarbon Potential.” Am
merican
Associatioon of Petroleum Geologists, vol. 72, no. 9, p. 10559-1073.
9 Al Moundir, M., Bouchta, R.,
R and Jabour, H., 1998. “An Overview
O of the Petroleum Systtems of Moroccoo.” Geological S
Society,
London, Special
S Publicatioons 132, no. 1, p.
p 283-296.
10 Tadla-H Haouz Basin.. Opportunitiees for Hydroocarbon E & P in Morocco. ONHHYM, 2010.http:/// /en/
www.onhymm.comHYDROCARBURES/Prospectivit%
%C3%A9sdesBassins/ExplorationR%C33%A9gionale/Onshorre/HaouzTadlaBasinn/tabid/347/languagee/en-
US/Default.aaspx?Cat=27.
June, 2013 XIV-13

XV. Algeria EIA/ARI W
World Shale Gas and Shale Oil R
Resource Assesssment
XV. ALGER
A IA
SUMMA
ARY
Algeria’s
A hydrocarbon ba
asins hold tw
wo significan
nt shale gas and shale o
oil formationss, the
Silurian Tannezuft
T Shale
S and th
he Devonian Frasnian Shale. This study exa
amines seve
en of
hale gas and shale oil basins: the
these sh e Ghadamess (Berkine) and Illizi b
basins in ea
astern
Algeria; the Timimoun, Ahnet and
a Mouydir basins in central Algeria; and th
he Reggane
e and
Tindouf basins
b in sou
uthwestern Algeria,
A Figu
ure XV-1.
Figure XV
V-1. Shale Gass and Shale O
Oil Basins of A
Algeria
Source: ARI, 2013.
June, 2013 XV
V-1
Our
O assessm
ment is that these seven
n basins contain approxximately 3,4
419 Tcf of rrisked
shale gas w 707 Tcf as the risked, technicallly recoverab
s in-place, with ble shale gass resource, T
Table
XV-1A, 1B
1 and 1C. In addition, six of thes
se basins ho
old 121 billio
on barrels o
of risked sha
ale oil
and cond
densate in-p
place, with 5.7
5 billion ba
arrels as the risked, tech
hnically reco
overable sha
ale oil
resource
e, Table XV-2
2.
Tablee XV-1A. Shale Gas Reservvoir Propertiess and Resourcces of Algeriaa.

Ghadames/Berkine Illizi
Basin/Gross Arrea 2 2
Basic Data
(117,000 mi ) (44,900 mi )
Shale Formatioon Frasniann Tannezzuft Tannezuft
Geologic Agee U. Devoniian Siluriaan Silurian
Depositional Enviro
onment Marine Marinne Marine
2
Proospective Area (mi ) 2,720 3,840 3,490 6,050 22,080 9,840 16,760
Physical Extent

Thickness (ft)
Net 2448 248 248 104 104 162 1662
Intervaal 8,000 - 10,500 9,000 - 10,000 10,000 - 16,0000 10,000 - 14,500 11,000 - 16,000 3,3300 - 8,000 3,300 - 8,000
Deppth (ft)
Averag ge 8,500 9,500 13,000 10,500 13,000 5,000 5,0000
Mo d. Mod. Mod. Mod. Mod. Mod. Mood.
Resservoir Pressure
Properties
Reservoir
Overp ress. Overpresss. Overpress. Overpress. Overpress. Ovverpress. Overppress.

Aveerage TOC (wt. %) 6.00% 6.0% 6.0% 5.7% 5.7% 5.7% 5.77%
Theermal Maturity (% Ro)
R 0.855% 1.15% 1.70% 1.15% 1.90% 1.15% 1.770%
Claay Content Med ium Medium m Medium Medium Medium M
Medium Meddium
Gass Phase Assocc. Gas Wet Gass Dry Gas Wet Gas Dry Gas W Gas
Wet Dry Gas
Resource
2
GIP
P Concentration (Bccf/mi ) 35.4 111.4 133.9 42.9 54.5 50.9 600.7
Rissked GIP (Tcf) 48.2 213.8 233.7 129.9 601.3 100.1 2003.6
Rissked Recoverable (T
Tcf) 4.8 42.8 58.4 26.0 150.3 15.0 400.7
Tablee XV-1B. Shale Gas Reservvoir Propertiess and Resourcces of Algeriaa.

Timimoun A
Ahnet Mouyydir
Basin/Grosss Area
Basic Data
2 2 2
(43,700 mii ) (20,200 mi ) (22,3000 mi )
Shale Formaation Frasnian Tannezuft Frasnian Tan
nnezuft Tannezuft
Geologic Age
A U. Devonian
U Silurian U. Devoniann Sillurian Silurrian
Depositional Envvironment Marine Marine Marine Marine Marrine
2
mi ) 32,040 41,670 1,650 5,740 111,730 12,8840
Physical Extent
Orgaanically Rich 200 100 275 60 3

330 600
Th
hickness (ft)
Net 180 90 248 54 2
297 544
Interrval 3,300 - 9,000 5,000 - 15,000 3,,300 - 6,600 5,0000 - 9,500 6,000 - 10,500 5,000 - 10,000
Deepth (ft)
Averrage 6,000 10,000 5,000 7,000 8,000 6,5500
Mod. Mod. M
Mod. Mood.
Reeservoir Pressure Modd. Overpress. Modd. Overpress.
Properties
Reservoir
O
Overpress. Ovverpress. Ove rpress. Overppress.
% 4.0% 2.8% 4.0% 3.0% 2
2.8% 3.00%
Th
hermal Maturity (%
% Ro) 1.70% 2.00% 1.15% 1.70% 2.00% 2.200%
Clay Content Medium Medium Medium M
Medium Meedium Meddium
Gaas Phase Dry Gas Dry Gas Wet Gas D Gas
Dry Dryy Gas Dry Gas
G
Resource
2
GIP Concentration (Bcf/mi
( ) 72.9 35.5 77.6 21.6 109.0 18.5
Risked GIP (Tcf) 467.1 295.5 25.6 24.8 255.7 47.6
Risked Recoverablee (Tcf) 93.4 59.1 3.8 5.0 5
51.1 9.5
June, 2013 XV
V-2
Tablee XV-1C. Shale Gas Reservvoir Propertiess and Resourcces of Algeriaa.

Reggane Tindouf
Basin/Grosss Area
Basic Data
2 2
(40,000 mi ) (77,000 mi )
Shale Formmation Frasniann Tannezuft Tannezuft
Geologic Age U. Devoniaan Silurian Silurian
2
Prrospective Area (mmi ) 2,570 2,110 10,150 224,600 5,340 23,8800
Physical Extent

60 600
Th
hickness (ft)
Net 297 234 117 207 5
54 544
Inteerval 5,5500 - 14,500 6,6600 - 16,000 5,0000 - 9,500 7,5000 - 16,000 6,600 - 13,000 6,600 - 14,000
Deepth (ft)
Aveerage 10,000 11,000 8,000 12,000 10,000 11,0000
Mod. Mod. Mod. M
Mod. Mod. Mo d.
Reeservoir Pressuree
Properties
Reservoir
O
Overpress. Overpress. Ovverpress. Oveerpress. Overrpress. Overp ress.
% 3.0% 3.0% 4.0% 4
4.0% 4..0% 4.00%
Th
hermal Maturity (% % Ro) 1.15% 1.70% 1.15% 1.80% 1.115% 2.500%
Cllay Content Medium Medium M
Medium Medium Me dium Med ium
Gaas Phase Wet Gas Dry Gas W Gas
Wet Drry Gas Wett Gas Dry Gas
G
Resource
2
GIIP Concentration (Bcf/mi ) 103.9 97.3 38.3 94.4 18.9 24.2
Riisked GIP (Tcf) 53.4 41.0 77.8 4
464.5 20.2 1155.2
Riisked Recoverablee (Tcf) 8.0 8.2 11.7 92.9 3
3.0 23.0
Tab
ble XV-2. Shalle Oil Reservo
oir Properties and Resourcees of Algeria.
Ghadames/Berkine Illizi Ahnet ne
Reggan Tin
ndouf
Basin/Gross Area
Basic Data
2 2 2 2 2
(117,000 mi ) (44,9000 mi ) (20,200 mi ) (40,000 mi
m ) (77,0000 mi )
Shale Formation Fraasnian Tannezuft Tanneezuft Frasnian Frasnian Tannezuft Tan
nnezuft
Geologic Age U. Devonian
D Silurian Silurrian U. Devoniann U. Devonian Silurian Sillurian
Deepositional Environm
ment M
Marine Marine Marrine Marine Marine Marine Maarine
2
Prospective Area (mi ) 2,720 3,840 6,050 9,8840 1,650 2,570 10,150 5,340
Physical Extent
Organically Rich 275 275 115 1880 275 330 130 60

Thickkness (ft)
Net 248 248 104 1662 248 297 117 54
Interval 8,000 - 10,5000 9,000 - 10,000 10,000 - 14,500 3,300 - 8,000 3,300 - 6,6000 5,500 - 14,500 5,000 - 9,500 6,600 - 13,000
Depth (ft)
Average 8,500 9,500 10,500 5,0000 5,000 10,000 8,000 100,000
Mod. Mod. Mod. Mood. Mod. Mod. Mod. M
Mod.
Reseervoir Pressure
Properties
Reservoir
Overpress. Overpress. O
Overpress. Overppress. Overpress. Overpress. Overpress. Ove rpress.
Averaage TOC (wt. %) 6.0% 6.0% 5.7% 5.77% 4.0% 3.0% 4.0% 4
4.0%
Thermmal Maturity (% Ro) 0.85% 1.15% 1.15% 1.155% 1.15% 1.15% 1.15% 1.15%
Clay Content Medium Medium Medium Med ium Medium Medium Medium Meedium
Oil Phase
P Oil Condensate C
Condensate Condeensate Condensatee Condensate Condensate Conddensate
Resource
2
OIP Concentration
C (MMbb
bl/mi ) 43.7 9.7 3.1 6.5 14.4 11.4 3.9 1.7
Riskeed OIP (B bbl) 59.4 18.7 9.5 12.8 4.8 5.9 8.0 1.8
Riskeed Recoverable (B bb
bl) 2.97 0.93 0.47 0.551 0.19 0.24 0.32 0
0.07
June, 2013 XV
V-3
INTROD
DUCTION
For most of Paleozoic time, North

h Africa (inccluding Alge
eria) was a single ma
assive
onal basin.1 The separa
depositio ation and su
ubsequent ccollision of L
Laurasia and
d Gondwana
a (the
Hercynia
an event) esttablished the
e seven indiividual basin
n outlines an
nd uplift structures of pre
esent
eria.2
day Alge e Silurian and the seccond in the Late
Two major transgressions, first in the
Devonian
n, provided the
t depositio
on of the org
ganically rich
h marine (ge
enerally Type
e I and II) so
ource
rocks in these
t basins
s. Subsequent transpre
essional movvements rea
activated the
e older structtures.
These ev
vents, plus additional
a co
ompression and
a movem ent, caused
d the local up
plifts and ero
osion
that today define and
d characteriz sins.3
ze these bas
The
T stratigraphic column
n for the sh XV-2,4
hale basins of Algeria iis provided in Figure X
identifyin
ng the Silurian Tannezu
uft black mu
udstone inte e Upper De
erval and the evonian Frassnian
mudstone that are th
he principal shale sourc
ce rocks for the conventtional oil and
d gas discovvered
n Algeria. The
to date in T stratigraphy of the Silurian
S sectiion is generrally more co
ontinuous th
han of
the Devo
onian section
n, which has
s been influe ore localized deposition5.
enced by mo
Geochemical
G modeling in
ndicates that these shal es may havve generated
d over 26,00
00 Tcf
of gas (in
ncluding sec
condary crac
cking of gene
erated oil), w
with some po
ortion of thiss gas still reta
ained
in the sh
hales. The present day he Silurian Tannezuft S
y total organic content (TOC) of th Shale
ranges frrom 2% to 4%.
4 Howeve
er, the TOC of the shale
e has been rreduced by as much as one-
s.6 The pre
half due to the therrmal maturation process esent day T
TOC of the Upper Devo
onian
Frasnian Shale range
es more wid % to 8%, deccreasing wesstward acrosss the region
dely, from 1% n.
The
T following
g series of th
hree regional cross-sectiions provide
es a useful p
perspective o
of the
depositio
onal and strructural setting for six of these ba es XV-3,4 X
asins, Figure XV-44 and X
XV-5.1
Figure XV
V-1(provided
d previously
y) shows the location of tthese three cross-sectio
ons.
June, 2013 XV
V-4
Figu
ure XV-2. Straatigraphic Co
olumn and Nom
menclature foor Illizi and Ghhadames (Berkine) Basins.
(Maajor reservoir rocks
r are shoown in yellow aand source roocks in gray.)
Source: Klett, 2000A.
June, 2013 XV
V-5
Figu
ure XV-3. Crosss Section A-A
A’: Ghadamess (Berkline) annd Illizi Basinss
Fiigure XV-4. Cross

C Section B-B’: Ahnet, M
Mouydir and IIllizi Basins
June, 2013 XV
V-6
Fig
gure XV-5. Cross-Section C-C’: Timimooun and Regggane Basins
Source: Klett, 2000B.
June, 2013 XV
V-7
1. GHADAMES
G S (BERKIN
NE) BASIN
1.1 Geologic
G Se
etting
The
T Ghadames (Berkine)) Basin is a large intra-ccratonic basin underlying
g eastern Alg
geria,
southern Tunisia and western Libya.
L The basin
b contaiins a seriess of reverse faults, provviding
structural traps for conventional
c oil and gas
s sourced frrom Devonia
an- and Silu
urian-age sh
hales.
The centtral, deep po
ortion of the basin contaiins uplifted ffault blocks fformed durin
ng the Camb
brian-
an.7
Ordovicia The Ghadames
G Basin and its two sig
gnificant sha
ale formatio
ons, the Sillurian
Tannezuft and the Upper Devo
onian Frasnian, are loccated in the
e eastern po
ortion of Alg
geria.
Figures XV-6
X and XV
V-7 provide the basin outline and s hale therma
al maturity co
ontours for tthese
two shale
e formations
s.
In
n Algeria’s portion
p of the
e Ghadame
es Basin, the
e Silurian Ta
annezuft Fo
ormation con
ntains
an organ
nic-rich marine shale th
hat increase
es in maturitty toward th
he basin center. We have
mapped a 28,130-mi2 higher qua
ality prospec
ctive area fo n this basin. The
or the Tannezuft Shale in
western and northerrn boundarie
es of the Ta
annezuft Sha
ale prospecctive area arre defined b
by the
erosional limits of th
he Silurian and
a by minimum therm
mal maturity. The easte
ern border o
of the
prospective area is defined
d by th
he Tunisia an
nd Algerian border.
The
T central, dry gas porttion of the Tannezuft
T S hale prospe
ective area in the Ghada
ames
Basin, co 420 mi2, ha
overing 21,4 as thermal maturity
m o over 2%. The rema
(Ro ) of 1.3% to aining
o the prospective area of 6,710 mi2 has an R o between 1
portion of 1.0% and 1.3%, placing
g this
area in th
he wet gas and
a condens
sate window.
Deposited
D ab
bove the Ta
annezuft is the
t areally m
more limited
d and therm
mally less m
mature
Upper Devonian Fra
asnian Shale ve mapped a 10,040-mi2 higher qu
e. We hav uality prospe
ective
area for the Frasnia
an Shale in the Ghadam
mes Basin of Algeria. The weste
ern, northern
n and
southern boundaries
s of the Fras
snian Shale
e prospective
e area are sset by the m
minimum the
ermal
maturity criterion of 0.7%
0 Ro. The eastern boundary
b off the prospective area iss the Tunisia
a and
Algeria border.
b The northern, ea
astern and southern oute
er ring of the
e Frasnian S
Shale prospe
ective
area in th
he Ghadames Basin, en of 2,720 mi2, is in the oiil window wiith Ro
ncompassing an area o
between 0.7% and 1.0%.
1 The central
c 0-mi2 portion
5,010 n of the Frassnian Shale prospective area
is in the dry gas wind o over 2%. IIn between iis the 2,310-mi2 wet gass and
dow, with Ro of 1.3% to
ate window for the Frasn
condensa nian Shale, with
w Ro betw
ween 1.0% a
and 1.3%.
June, 2013 XV
V-8
Figure XV-6. Ghadames Basin

B Silurian Tannezuft Shhale Outline aand Thermal M
Maturity
Source: ARI, 2013.

2
Fig
gure XV-7. Gh
hadames Basin Upper Devo
onian Frasniann Shale Outlinne and Therm
mal Maturity
Source: ARI, 2013.

2
June, 2013 XV
V-9
1.2 Reservoir
R Properties
Silurian
S Tan
nnezuft Form
mation. The
e depth of tthe gas prosspective are
ea of the Sillurian
Tannezuft Shale in the
t Ghadam
mes (Berkine
e) Basin of A
Algeria rang
ges from 10,000 ft along the
northern and eastern
n edge of th
he basin to 16,000
1 ft in the basin ce
enter, avera
aging 10,500
0 ft in
the wet gas prospe
ective area and 13,000
0 ft in the dry gas pro
ospective area. The g
gross
s of the Tan
thickness nnezuft Sha
ale ranges frrom 30 to 2
200 ft, with an organic--rich average net
thickness
s of 104 ft. The
T TOC off the Tannez
zuft Shale a
averages 5.7
7%. The low
wer portion o
of the
formation
n is particula OC values off up to 15%.8
arly organic-rrich, with TO
Upper
U Devo
onian Frasn
nian Forma
ation. The depth of tthe prospecctive area o
of the
overlying
g Upper Dev
vonian Frasn
nian Shale ranges
r from 8,000 ft to 16,000 ft, avveraging 8,5
500 ft
in the oil--prone area,, 9,500 ft in the wet gas//condensate 13,000 ft in the dry gas area.
e area, and 1
The Fras
snian Shale has a gros
ss thickness 500 ft, with an average organic-rich net
s of 50 to 5
thickness
s of 248 ft. The Frasniian Shale has TOC va lues ranging
g from 3% to 10%, witth an
average of 6%.10
1.3 Resource
R Assessmen
A nts
Silurian
S Tan
nnezuft Sha
ale. The Ta
annezuft Sh mi2 wet gass and
hale, within its 6,050-m
condensa
ate prospec
ctive area, has
h resourc
ce concentra 3 Bcf/mi2 off wet gas a
ations of 43 and 3
million barrels/mi2 off condensatte. Within its larger 22
2,080-mi2 drry gas prosp
pective area
a, the
Tannezuft Shale has e concentrattion of 55 B cf/mi2. The risked reso
s a resource ource in-placce for
30-mi2 wet gas/condens
the 28,13 g sate and drry gas prosp
pective area
as of the Ta
annezuft Sha
ale is
731 Tcf of
o wet and dry
d gas and
d 10 billion barrels
b of co presence of clays
ondensate. Based on p
but othe
erwise favorable reservoir propertie
es, we esti mate a riskked, techniccally recove
erable
resource
e of 176 Tcf of
o wet/dry sh
hale gas and
d 0.5 billion b
barrels of sh
hale condenssate.
Upper
U Devon
nian Frasniian Shale. The Frasnia
an Shale hass resource cconcentratio
ons of
n barrels/mi2 for oil in the
44 million e 2,720-mi2 oil window; 10 million barrels/mi2 off condensate
e and
mi2 of wet ga
111 Bcf/m 840-mi2 wet gas/conden sate window
as in the 3,8 Bcf/mi2 of dryy gas
w; and 134 B
in the 3,490-mi2 dry
y gas window
w. The risk
ked resourc e in-place w 50-mi2
within the ovverall 10,05
prospective area is 496 Tcf of shale gas and
a 78 billio
on barrels o
of shale oil/ccondensate,, with
risked, re
ecoverable of
o 106 Tcf for shale gas and 3.9 billio
on barrels fo
or shale oil.
June, 2013 XV
V-10
2. IL
LLIZI BASIN
2.1 Geologic
G Se
etting
The
T Illizi Basin is located
d south of the Ghadame
es (Berkine) Basin, sepa
arated by a h
hinge
line in the
e slope of th
he basement rocks. This hinge line controls mu
uch of the differing petro
oleum
generatio
on, migratio
on and accu basins.4
umulation histories of tthese two b Th
he Illizi Bassin is
bounded on the eastt by the Tihe
emboka (Ga
aroaf) Arch, on the south by the Ho
oggar Massiff, and
on the west
w by the Amguid-Has
A ssi Touareg structural axxis which se
eparates the
e Illizi Basin from
the Mouy
ydir Basin, Figure
F 8.4 The Illizii Basin is lo
XV-8 ocated on a basement h
high and thu
us its
shale forrmations are
e shallower than in the Ghadames (Berkline) B
Basin. We h
have mappe
ed an
overall sh
hale gas and ctive area off 26,600 mi2 for the Illizi Basin.
d oil prospec
2.2 Reservoir
R Properties
Only
O the Silu
urian Tannez
zuft Shale is
s assessed as prospecctive in the IIllizi Basin. (The
Upper Devonian Fra
asnian Shale
e in the Illiz
zi Basin hass been exclu
uded because of insuffficient
s and low th
thickness hermal matu
urity.) The depth of the
e Tannezuft Shale ranges from 3,000 to
8,000 ft, averaging 5,000
5 ft in th
he northern prospective area of the basin. The
e gross thickkness
of the Ta
annezuft Sha
ale ranges frrom 30 to 33
30 ft, with an
n average ne
et pay of 162 ft. The TO
OC of
this Type
e II kerogen marine shalle ranges fro
om 2% to 10
0%, with an average of 5
5.7%. The basin
has a the
ermal maturrity (Ro) of 1% to over 2%. This pla
aces the Tan
nnezuft Sha
ale in the we
et gas
and cond
densate wind
dow (Ro of 1%
1 to 1.3%)) in the north
h-central portion of the b
basin and places
the shale
e in the deep
per surround
ding area of the
t Illizi Bassin in the dryy gas window
w.
2.3 Resource
R Assessmen
A nt
Within
W 40-mi2 prosp
its 9,84 pective area
a for wet gass and condensate, the S
Silurian Tann
nezuft
Shale of the Illizi Bas
sin has resource concen 51 Bcf/mi2 o
ntrations of 5 of wet shale gas and 6 m
million
mi2 of shale oil
barrels/m o and cond 760-mi2 prosspective area
densate. Wiithin its 16,7 a for dry gass, the
shale has
s a resource cf/mi2.
e concentration of 61 Bc
The
T risked re
esource in-p
place in the
e total prosp
pective area
a is estimate
ed at 304 T
Tcf of
wet/dry shale
s gas plu
us 13 billion barrels of shale oil/cond
densate. Off this, 56 Tcff of wet/dry sshale
gas and 0.5 billion barrels of shale oil/condensate a re estimate
ed as the rissked, techn
nically
e.
June, 2013 XV
V-11
Figure XV
V-8. Illizi Basin Silurian Tannezuft Shalee, Outline andd Thermal Maturity
Source: ARI, 2013.
June, 2013 XV
V-12
3. TIMIMOUN
T BASIN
3.1 Geologic
G Se
etting
The
T Timimou
un Basin, located in cen
ntral Algeria
a, is bounde
ed on the no
orth and ea
ast by
structural uplifts, on the west by the Beni Ab
bbes Saddle
e, and on the
e south by tthe Djoua Sa
addle
that sepa
arates the Timimoun
T Basin from th
he Ahnet Ba
asin. The d
depth and d
deposition o
of the
Timimoun Basin varies greatly due
d to erosion along th e structural highs during the Hercyynian.
eozoic sectio
The Pale on is thickes
st in the centter of the Tim
mimoun Bassin, thinning
g to the north
h and
east. Th
he major sh
hale source rocks in this basin are
e the Siluria
an Tannezufft Shale and
d the
Upper De snian Shale.
evonian Fras
W mapped a 41,670-mi2 dry gas prrospective a

We area for the Tannezuft S
Shale that co
overs
essentiallly all of the Timimoun Basin,
B exclud
ding a smalll area along the north-w
western portiion of
the basin
n where the
e Silurian is gure XV-9. In addition
s absent, Fig ped a 32,040-mi2
n, we mapp
Frasnian Shale dry gas prospective area that coverrs the easte
ern two-third
ds of the b
basin,
excluding
g the low (<2
2%) TOC are
ea along the
e western po
ortion of the basin, Figurre XV-10.
3.2 Reservoir
R Properties
Silurian
S Tan
nnezuft Forrmation. The
T depth o
of the dry g
gas prospecctive area o
of the
Tannezuft Shale in th
he Timimoun
n Basin rang
ges from 5,0
000 ft on the
e edges of th
he basin to n
nearly
15,000 ftt in the basin center, av
veraging 10,000 ft. The
e thickness o
of the grosss shale interrval is
100 ft, with
w a net org
ganic-rich pa
ay of 90 ft. The TOC off the Tannezuft Shale a
averages 2.8
8% in
the prosp
pective area.
Upper
U Devon tion. The depth of the dry gas pro
nian Frasniian Formati ospective arrea of
the Uppe
er Devonian Frasnian Sh
hale in the Timimoun
T Ba
asin ranges ffrom about 3
3,300 ft alon
ng the
basin edge to about 9,000 ft in the basin center, averag
ging 6,000 ftt. The thickn
ness of the g
gross
0 ft, with a net
shale interval is 200 n organic-rrich pay of 1
180 ft. The TOC of the
e Frasnian S
Shale
averages
s 4% in the prospective
p area.
June, 2013 XV
V-13
Figure XV-99. Timimoun Basin

B Silurian Tannezuft Shhale, Outline aand Thermal M
Maturity
Source: ARI, 2013.

2
Figure XV-10. Timimoun Basin

n Upper Devonian Frasniann Shale, Outline and Therm
mal Maturity
Source: ARI, 2013.

2
June, 2013 XV
V-14
3.3 Resource
R Assessmen
A nt
Silurian
S Tan
nnezuft Shale. The Tannezuft Shale, with 670-mi2 dryy gas
hin the 41,6
t Timimoun Basin, has e concentration of 36 Bccf/mi2. The rrisked
s a resource
as resource in-place in the prospe
shale ga ective area is 296 Tcf, with 59 Tccf as the rissked,
ble shale gas resource.
Upper
U Devon
an Shale, w 2,040-mi2 dryy gas
within the 32
t Timimoun Basin, has e concentration of 73 Bccf/mi2. The rrisked
s a resource
as resource in-place in the prospe
shale ga ective area is 467 Tcf, with 93 Tccf as the rissked,
ble shale gas resource.
June, 2013 XV
V-15
4. AHNET
A BAS
SIN
4.1 Geologic
G Se
etting
The
T Ahnet Ba
asin is locatted in the Sa
ahara Deserrt Platform, south of the
e large Timim
moun
Basin, west of the Mouydir
M Basin, and north
h of the Hog gar Shield. The Ahnet Basin is a n
north-
ending basin that contain
south tre ns thick (ove
er 3,000 ft) o
of Paleozoic sediments in
ncluding org
ganic-
rich Silurrian and Dev
vonian shale
es. The stru
uctures in th
he basin take
e the form o
of large, elon
ngate
anticlines
s and dome
es formed as a result of
o tectonic ccompression
n, as shown
n on the norrth to
11.9
oss-section, Figure XV-1
south cro
gure XV-11. Schematic

Fig S Cro
oss Section off the Ahnet Baasin, Algeria
Source: Loggan, P. and Dudddy, I., 1998.
The
T Ahnet Basin conta nezuft and Upper Devonian Frassnian
ains the Silurian Tann
formation
ns and their organic-rich
h shale interrvals. In so
ome portionss of the basin, the Paleozoic
section was
w eroded during Herc
cynian deform
mation. How
wever, up to
o 4 km of Pa
aleozoic dep
posits
remain in e basin.9 We
ntact in the center of the mi2 for
W have defi ned prospecctive areas of 11,730 m
the Silurian Tannezu nd 7,390 mii2 for the De
uft Shale an evonian Fra
asnian Shale
e in the norrthern
portion of
o the Ahnet Basin, Figurres XV-12 an
nd XV-13.
June, 2013 XV
V-16
Figure XV-12. Ahnet Bassin Silurian Taannezuft Shal e, Outline and Thermal Maaturity
Source: AR
RI, 2013.
Figure
F XV-13. Ahnet Basin Upper
U Devonian Frasnian S
Shale, Outlinee and Thermall Maturity
Source: ARI,, 2013.
June, 2013 XV
V-17
4.2 Reservoir
R Properties
Silurian
S Tan
nnezuft Form
mation. The
e depth of tthe Tannezuft Shale in
n the prospe
ective
area of th
he Ahnet Ba
asin ranges from
f 6,000 to 10,500 ft, averaging 8
8,000 ft. The
e thickness o
of the
shale ran
nges from 15
50 to 500 ft, averaging 330
3 ft with a high net to gross ratio. The TOC o
of the
nges from 1.5% to 4% and
shale ran a contains
s Type III ga
as-prone kerrogen. The thermal ma
aturity
places th
he prospective area of the
t Tannezu
uft Shale of the Ahnet B
Basin in the
e dry gas window
(Ro > 1.3
3%).
Devonian
D Frrasnian Forrmation. The depth off the Frasnian Shale in
n the prospe
ective
area of the
t Ahnet Basin ranges
s from aboutt 3,300 to 9 ,500 ft, averaging 6,000
0 ft, with the
e wet
gas/cond
densate area
a shallower and the dry gas area de
eeper. The gross thickn
ness of the sshale
75 ft, with a net pay of approximate
ranges frrom 60 to 27 a ely 54 ft in th
he dry gas a
area and 248
8 ft in
the wet gas/condens
g sate area. The
T TOC ran
nges from 3%
% to 4% and
d is mostly Type
T III gas-p
prone
kerogen. The therm
mal maturity
y of the prospective are
ea of the F
Frasnian Sha
ale is in the
e wet
densate and dry gas win
gas/cond ndows (Ro > 1.0%). Pe
etrophysical evaluationss of the Frassnian
Shale ind
dicate poros
sity of 6% and low wate
er saturation
n in the dee
eper, prospe
ective area o
of the
Ahnet Ba
asin.
4.3 Resource
R Assessmen
A nts (Prospe
ective Area
a).
Silurian
S Tan
nnezuft Shale. 30-mi2 dry gas prospe
Withiin its 11,73 ective area, the
t Ahnet Basin
B has a resource co n of 109 Bcff/mi2. The rrisked
oncentration
s resource in-place in th
shale gas he dry gas prospective
p a
area is 256 T
Tcf, with 51 Tcf estimate
ed as
the risked
d, technically recoverable shale gas
s resource.
Devonian
D Frrasnian Sha i 5,740-mi2 dry gas pro
ale. Within its ospective arrea, the Frassnian
Shale in the Ahnet Basin
B has a resource co
oncentration mi2. Within its 1,650-mii2 wet
n of 22 Bcf/m
densate pros
gas/cond spective area, the Frasn
nian Shale h
has resource
e concentrations of 15 m
million
mi2 of shale oil/condensa
barrels/m o ate and 78 Bcf/mi
B 2
of wett shale gas.
The
T risked sh
hale gas res ace in the ovverall 7,390-mi2 wet/dryy gas prospe
source in-pla ective
area is 50
5 Tcf, with 9 Tcf as the
e risked tech
hnically reco verable sha
ale gas resou
urce. The rrisked
e 1,650-mi2 oil/condenssate prospecctive area is 5 billion ba
shale oil resource in-place in the arrels,
with 0.2 billion
b barrels as the risk
ked, technica able shale oil resource.
ally recovera
June, 2013 XV
V-18
5. MOUYDIR
M BASIN
B
5.1 Geologic
G Se
etting.
The
T Mouydir Basin is loc
cated in cen
ntral Algeria , west of the
e Illizi Basin
n and east o
of the
Timimoun and Ahne
et basins. A variety of upthrusted sstructural rid
dges separa
ate these ba
asins.
eozoic Siluria
The Pale an and Devo
onian sediments, which include the important S
Silurian Tann
nezuft
Shale an
nd the Upperr Devonian Frasnian
F Sh epest in the northern portion of the basin
hale, are dee
and crop
p out in the southern porttion of the ba
asin.
We
W have mapped a pros a of 12,840 mi2 in the n
spective area northern porrtion of the b
basin,
limited on
n the south by
b the depth
h of the shale
e, Figure XV
V-14.
Figure XV-144. Mouydir Baasin Silurian Tannezuft

T Shaale, Outline annd Thermal M
Maturity
Sourcee: ARI, 2013.
June, 2013 XV
V-19
5.2 Reservoir
R Properties
Only
O the Silu
urian Tanne
ezuft Shale is assessed
d as prospe
ective in the
e Mouydir B
Basin.
(The Dev
vonian Frasnian Shale, although th
hick and org anically rich
h, is mostly too shallow,, less
than 3,30
00 ft, exclud
ding the shalle from furth
her assessm
ment.) The d
depth of the Tannezuft S
Shale
ranges frrom 5,000 to
o 10,000 ft, averaging
a 6,500 ft in the
e prospectivve area. The
e gross thickkness
of the sh
hale ranges
s from 20 to
o 120 ft, averaging 60 ft with a hiigh net to g
gross ratio. The
Tannezuft Shale in the Mouydir Basin has TOC
T ranging
g from 2% to
o 4%, with a thermal ma
aturity
above 1.3% Ro, placing the shale
e in the dry gas
g window .
5.3 Resource
R Assessmen
A nt.
Within
W 2,840-mi2 drry gas prospective area
its 12 a, the Silurrian Tannezzuft Shale o
of the
Mouydir Basin has a resource concentration
c mi2. The rissked resourcce in-place iin the
n of 19 Bcf/m
dry gas prospective
e area is estimated
e at 48 Tcf, w
with 10 Tcff as the rissked, techn
nically
as resource.
June, 2013 XV
V-20
6. REGGANE
R BASIN
6.1 Geologic
G Se
etting.
The
T Reggane
e Basin, loca
ated in the Sahara
S Dese
ert portion off central Alge
eria, is sepa
arated
from the Timimoun Basin
B by the Ougarta Rid
dge. The ba
asin is an assymmetric syyncline, bou
unded
orth by a se
on the no eries of reserve faults an
nd on the so
outh by shallowing outccrops, Figure
e XV-
15.9 This basin may
y contain ov
ver 800 m of Silurian se
ection, altho ontrol in the deep
ough well co
northern portion of th
he basin is limited. The
e basin also
o contains th
he Upper De
evonian Frassnian
Formatio
on which is re
eported to re
each a maximum thickne
ess of 400 m
m.
We
W have mapped prospe
ective areas mi2 for the S
s of 34,750 m Silurian Tann
nezuft Shale
e and
4,680 mi2 for the Upp
per Devonia
an Frasnian Shale in the
e eastern portions of the
e Reggane B
Basin,
Figures XV-16
X and XV-17.
X
6.2 Reservoir
R Properties
P (Prospectiive Areas)..
Silurian
S Tan
nnezuft Forrmation. The
T depth o
of the prosp
pective area
a for the Sillurian
Tannezuft Shale ran
nges from 16
6,000 ft on the
t north to 5,000 ft on the south, a
averaging 10
0,000
ft. The wet
w gas/condensate pro
ospective are
ea is slightlyy shallower than this avverage, while the
dry gas prospective area is deeper.9 The gross thickkness of the
e organic-ricch section in the
prospective area ran
nges from about
a 130 to
t 230 ft, w net to grosss ratio.9 TO
with a high n OC is
favorable
e, ranging frrom 3% to 5%.
5 The th
hermal matu
urity places the prospecctive area o
of the
Tannezuft Shale into
o the wet ga
as and condensate wind
dow (Ro of 1
1.0 to 1.3%)) in the shallower
south and into the drry gas windo
ow (Ro > 1.3
3%) in the de
eeper north, as illustrate
ed by the no
orth to
south cro
oss-section on V-17.10
o Figure XV
Upper
U Devonian Frasniian Formattion. The d e shallower Upper Devo
depth of the onian
Frasnian Shale in the
e Reggane Basin range
es from 5,500
0 ft to 16,00
00 ft, averaging about 10
0,500
ft in the prospective
e area, with the wet gas
s/condensatte area shalllower and tthe dry gas area
at deeper.9 The thickne
somewha ess of the organic-rich
o portion of th
he shale ran
nges from 260 to
330 ft, with
w a high net s ratio.9 The
n to gross e TOC of th
he shale ran 2% to 4%.10 The
nges from 2
thermal maturity
m plac
ces the pros
spective are
ea of the Fra
asnian Shale
e in the wett/condensate
e and
dry gas windows
w (Ro > 1%). Th
he Frasnian Shale is jud
dged to have
e good poro
osity of abou
ut 6%
with low water saturation, base
ed on petro
ophysical evvaluations off the Frasnian Shale in
n the
g Ahnet Basin.10,11
adjoining
June, 2013 XV
V-21
Figure XV-155. Reggane Basin Silurian Tannezuft

T Shaale, Outline aand Thermal M
Maturity
Source: ARI, 2013.
Fig
gure XV-16. Reggane
R Basin
n Upper Devon
nian Frasniann Shale, Outlinne and Thermal Maturity
Source: ARI, 2013.
June, 2013 XV
V-22
Figurre XV-17. Sch

hematic Crosss Section of thhe Reggane B
Basin, Algeria
Soource: Logan, P. and Duddy, I., 1998.

1
6.3 Resource
R Assessmen
A nt
Silurian
S Tan
nnezuft Sh
hale. 00-mi2 dry gas prospe
Withiin its 24,60 ective area, the
t Reggane
e Basin has e concentrattion of 94 Bccf/mi2. With
s a resource hin its
mi2 wet gas and
10,150-m a condens
sate prospec
ctive area, tthe shale ha
as resource cconcentratio
ons of
mi2 of wet gas
38 Bcf/m s and 4 millio mi2 of oil/cond
on barrels/m densate.
The
T n-place for the overall 34,750-mi2 Silurian T
risked resource in Tannezuft S
Shale
t Reggane
e Basin is 542
5 Tcf of w
wet/dry shale
e gas plus 8 billion barre
els of
shale oil/condensate
e. Of this, 105 Tcf of wet/dry sha
ale gas pluss 0.3 billion barrels of sshale
oil/conde stimated as the risked, technically
ensate are es t re
ecoverable rresource.
June, 2013 XV
V-23
Devonian
D Frrasnian Sha i 2,110-mi2 dry gas pro
ale. Within its ospective arrea, the Frassnian
Shale in the Reggan
ne Basin ha
as a resourc
ce concentra Bcf/mi2. Witthin its 2,57
ation of 97 B 70-mi2
wet gas and
a condens ctive area, the shale hass resource cconcentrations of 104 Bccf/mi2
sate prospec
of wet ga s/mi2 of oil an
as and 11 million barrels nd condensa
ate.
The
T n-place for the overalll 4,680-mi2 Devonian Frasnian S
risked resource in Shale
t Reggane
e Basin is es
stimated at 9
94 Tcf of we
et/dry shale gas plus 6 b
billion
barrels of
o shale oil/c
condensate. Of this, 16
6 Tcf of wet//dry shale g
gas plus 0.2 billion barre
els of
shale oil//condensate
e are estimatted as the ris
sked, techni cally recove
erable resourrce.
June, 2013 XV
V-24
7. TINDOUF
T BASIN
B
7.1 Geological
G Setting.
The
T Tindouf Basin is loca
ated in the far
f southwesstern portion
n of Algeria, bordered o
on the
west by Morocco and on the sou
uth by Maurritania. Thiss large basin
n, the least e
explored bassin in
the Saha 000 mi2 just w
ara Desert Platform, covers an area of over 45,0 within the Allgeria.
Because
B of liimited well penetrations
p s, considera ble uncertaiinty surrounds the shale
e gas
and oil potential
p of the Tindouf Basin. Ba
ased on rece
ent data fro
om Sonatracch, the Devo
onian
Frasnian Shale is rellatively thin (average of 10 m) with a TOC of on %.10 As such
nly about 1% h, this
nit has been
shale un n excluded from further quantitativve assessm
ment. Howe
ever, the Sillurian
Tannezuft Shale ap
ppears to be
e more prom
mising. We
e have esta
ablished a d
dry and wett gas
2
prospective area of 29,140 mi for the Silurian Tannezzuft Shale in
n the northe
ern portion o
of the
Tindouf Basin
B where
e the TOC is 2% or highe
er, Figure XV
V-18.
Figure XV-118. Tindouf Basin

B Silurian Tannezuft Sh ale Outline annd Thermal Maaturity
Source:
S ARI, 20113.
June, 2013 XV
V-25
7.2 Reservoir
R Properties
The
T depth of the Silurian
n Tannezuft Shale in the
e prospectivve area rang
ges from 6,6
600 to
14,000 ftt, averaging
g about 10,5
500 ft. While the total Upper Silu
urian section
n can be se
everal
thousand
d feet thick, the organic--rich portion of the Siluriian Tannezu
uft Shale hass a net thickkness
of only 54
5 ft where the
t TOC ex
xceeds 2%. In the prosspective are
ea, the Tann
nezuft Shale
e is in
both the wet gas/con
ndensate an
nd the dry ga
as windows (Ro > 1.0%)) and has ga
as-prone Tyype III
kerogen.10,12 Figure XV-19
X des a cross-section for tthis frontier h
provid n basin.13
hydrocarbon
Figu
ure XV-19. Tin
ndouf Basin C
Cross Section
Source: Booote, 1998.
7.3 Resource
R Assessmen
A nt.
Within
W 3,800-mi2 drry gas prospective area
its 23 a, the Silurrian Tannezzuft Shale in
n the
Tindouf Basin has a resource concentratio
c n of 24 Bcff/mi2. Within its 5,340-mi2 wet gass and
ate area, th
condensa he shale has resource concentratio Bcf/mi2 for w
ons of 19 B wet gas and
d 1.7
arrels/mi2 forr oil/condens
million ba sate.
June, 2013 XV
V-26
Within
W verall 29,140-mi2 prosp
its ov pective area
a, the risked
d resource in-place fo
or the
t Tindouf Basin is estimated at 13
35 Tcf of we
et/dry shale gas and 2 b
billion
barrels of
o shale oil/c
condensate. Of this, 26
6 Tcf of wet/
t/dry shale g
gas and 0.1 billion barre
els of
shale oil//condensate
e are estimatted as the ris
sked, techni cally recove
erable resourrce.
ACTIVIT
TY
Algeria’s
A natu
ural gas and
d gas comp
pany, Sonat rach, has u
undertaken a comprehensive
effort to define the size
s and qua
ality of its sh
hale gas (an d oil) resources. To da
ate, the com
mpany
ablished a da
has esta ata base of older cores
s, logs and other data a
and comple
emented thiss with
w shale well logs in the main shale basins of A
information from new Algeria. Nextt in the plan
n is to
eries of pilott wells to te
drill a se est the prod
ductivity of tthe high priority basinss, targeting sshale
formation
ns with high TOC (>2%) and thick pay (>20m) a
at moderate depths (<3,0
000 m). The
e first
pilot welll within this comprehensive shale resource
r as sessment p
program is sscheduled fo
or the
Berkine (Ghadames) Basin, followed by test wells in tthe Illizi, Tim
mimoun, Ahnet and Mo
ouydir
basins.10 Internation
nal energy co
ompanies, Statoil
S and R
Repsol, have
e also underrtaken geolo
ogical
and rese cterization studies of Algeria’s shaless.11
ervoir charac
Over
O the pas
st year, Alge
eria has pas
ssed amend
dments to itss federal leg
gislation covvering
the hydrocarbon sector
s impro
oving inves
stment clim
mate in antticipation o
of an expa
anded
hydrocarrbon licensin
ng round due
e in 2013. However, th
he position o
of its stated--owned com
mpany
Sonatrac
ch is expecte
ed to remain
n dominant in
n this sectorr.
REFERE
ENCES
1 Klett, T.R., 2000. “Total Petroleum

P System
ms of the Grand Erg/Ahnet Provvince, Algeria and Morocco—Thee Tanezzuft-Tim
mimoun,
Tanezzuftt-Ahnet, Tanezzzuft-Sbaa, Tanezzuft-Mouydir, Tanezzuft-Benou
T ud, and Tanezzzuft-Béchar/Abadla.” U.S. Geoological
Survey Buulletin 2202-B.
2 Peterson, J.A., 1985. “Geeology and Petrooleum Resourcees of North-Centtral and Northeaastern Africa.” U
U.S. Geological Survey
Open-Filee Report 85-709, 54 p.
3 Aliev, M. et al., 1971. “Geological Structures and Estiimation of Oil aand Gas in the Sahara in Algeeria: Spain.” Altamira-
Rotopresss, S.A., 265 p.
4 Klett, T.R., 2000. “Total Petroleum
P Systems of the Illizi Province,
P U.S. Geological Survey
Algeriaa and Libya—Taanezzuft-Illizi.” U
Bulletin 22202–A.
5 Boudjemaa, A., 1987. “Evvolution Structurrale du Bassin Petrolier «Trias ique» du Saharra Nord Oriental (Algerie).” Thèse a
l’Universitté de Paris-Sud, Centre d’Orsay, 290 p.
June, 2013 XV
V-27
6 Daniels, R.P.,
R and Emme, J.J., 1995. “Petroleum System m Model, Easterrn Algeria, from Source Rock too Accumulation; When,
Where, annd How?” Proceeedings of the Seminar
S on Sourrce Rocks and H
Hydrocarbon Haabitat in Tunisia; Entreprise Tunisienne
d’Activitéss Petrolieres Memoir 9, p. 101–1124.
7 Yahi, N., Schaefer,
S R.G., and
a Littke, R., 20001. “Petroleum m Generation andd Accumulation in the Berkine B
Basin, Eastern A
Algeria.”
P Geoloogists, Bulletin, vol.
v 85, no. 8, p. 1439-1467.
8 Acheche, M.H., M’Rabet, A., Ghariani, H.., Ouahchi, A., and
a Montgomeryy, S.L., 2001. “G Ghadames Basin, Southern Tunnisia: A
Reappraissal of Triassic Reservoirs and Future Prospectivvity.” American Association of P
Petroleum Geoloogists, Bulletin, vvol. 85,
no. 5, p. 765-780.
7
9 Logan, P. and Duddy, I., 1998. “An Investtigation of the Thhermal History oof the Ahnet and Reggane Basinns, Central Algerria, and
the Conseequences for Hydrocarbon Genneration and Acccumulation.” Inn: Macgregor, D D.S., Moody, R.T.J. and Clark-Lowes,
D.D. (eds.), 1998, Petroleeum, Geology of North Africa. Geological Societty, London, Speccial Publication N
No. 132, 131-1555.
10 Rahmani, A., Kaced, M. and Arab, M., 2012.
2 “The Pottential of Shale Gas Plays in A
Algeria.” Sonatrach Amont/Internnational
Gas Unionn Shale Gas Woorkshop, Oran, Algeria,
A Februaryy.
11 Kaddour , A. 2012. “Shaale Gas Developpment in Algeria: Possible Syne rgy with Convenntionals.” Shale Gas Workshop 27- 28
February, Oran.
12 Belhameeche, F. and Saadallah,
S N., 2007. “Hydrocarbons Potenttial of the Tinddouf Basin (Algeria).” SONATTRACH
EXPLORA ATION, Boumerrdes, Algeria, AAPG
A Search and
a Discovery A
Article #90072, American Asssociation of Pettroleum
Geologistss, European Reggion Conferencee, Athens, Greecce.
13 Boote, D. R. D., Clark-Lowes, D.D., andd Traut, M.W., 1998. “Palaeozzoic Petroleum Systems of Norrth Africa.” Geoological
Society, London,
L Special Publications 1322, no. 1, p. 7-68..
June, 2013 XV
V-28
XVI. Tunisiaa EIA/ARI W
XVI. TUNISIA
T A
SUMMA
ARY
Tunisia
T has two
t significa
ant formation
ns with pote
ential for sha
ale gas and
d shale oil - - the
Silurian Tannezuft “Hot Shale” and the Upper Devvonian Frassnian Shale
e. These sshale
formation
ns are in the
e Ghadames
s Basin, loca
ated in south
hern Tunisia
a. Addition
nal shale gass and
oil poten
ntial may ex
xist in the Jurassic-Crretaceous a
and Tertiaryy petroleum systems in
n the
Pelagian Basin of ea
astern Tunisiia, as discus
ssed further in this Chap
pter, Figure X
XVI-1.
Figure XV
VI-1. Tunisia’ss Shale Gas annd Shale Oil B
Basins
Source: ARI, 2013.
June, 2013 XV
VI-1
Our
O assessm
ment is that the
t Tannezu
uft and Frassnian shale fformations in the Ghada
ames
Basin co
ontain 114 Tcf
T of riske
ed shale ga
as in-place, with 23 Tccf as the rissked, techn
nically
as resource, Table XVI--1. In addittion, these ttwo shale fo
ormations co
ontain
n barrels of risked shale
29 billion ce, with 1.5 billion barre
e oil in-plac els as the risked, techn
nically
recoverable shale oill resource, Table
T XVI-2.
Table XVI-1. Shalee Gas Reservo

oir Propertiess and Resourcces of Tunisia..
Ghadames
Basin/G
Gross Area 2
Basic Data
(117,000 mi )
Shale Formation
F Tannezuft Frasnian
Geolo ogic Age Silurian U. Devonian
Depositionaal Environment Maarine Marine
2
Prospective Arrea (mi ) 410 940 1,210 850 80
Physical Extent

Thickness (ft)
Net 104 104 177 177 177
Interval 10,000 - 11,000 11,000 - 14,500 8,000 - 10,000 9,000 - 10,000 10,000 - 11,0000
Depth (ft)
Average 10,500 13,000 8,500 9,500 10,500
Reservoir Presssure Mod. Overpress. Mod. Overpress . Mod. Overpresss. Mod. Overpresss. Mod. Overpresss.
Properties
Reservoir
Average TOC (wwt. %) 5.7% 5.7% 6.0% 6.0% 6.0%

Thermal Maturrity (% Ro) 1.15% 1.60% 0.85% 1.15% 1.35%
Clay Content Medium Medium Medium Medium Medium
Gas Phase Wet Gas Dry Gas Assoc. Gas Wet Gas Dry Gas
Resource
2
Risked GIP (Tccf) 11.4 33.3 20.0 44.1 5.2
Table XVI-2. Shale Oil Reservo

oir Properties and Resourcees of Tunisia.
Ghadames
Basin/Grross Area
Basic Data
2
(117,000 mi )
Shale Foormation Tannezuft Frrasnian
Geolog gic Age Silurian U. Devonian
D
Depositional Environment Marine M
Marine
2
Prospective Area (mi ) 410 1,210 850
Physical Extent
O
Thickness (ft)
N
Net 104 177 177
Interval 10,000 - 11,000 8,000 - 10,000 9,000 - 10,0000
Depth (ft)
A
Average 10,500 8,500 9,500
Reservoir Pressure Mod. Overpress. Mod. Overpresss. Mod. Overpresss.
Properties
Reservoir
wt. %)
Average TOC (w 5.7% 6.0% 6.0%
Thermal Maturitty (% Ro) 1.15% 0.85% 1.15%
Oil Phase Condensate Oil Condensatee
Resource
2
Risked Recoveraable (B bbl) 0.04 1.23 0.19
June, 2013 XV
VI-2
1. GHADAMES
G S BASIN
1.1 In
ntroduction
The
T Silurian--age Tanne
ezuft “Hot Shale”
S (calle
ed “hot” be
ecause of its high ura
anium
content; gamma-ray values >15
50 API units)) is present in much of North Africa
a and the M
Middle
his organic-rrich shale ha
East. Th as served as a major so
ource rock ffor many of the conventtional
g fields in the region. The Upper Devonian--age Frasnia
oil and gas an Shale is deposited a
above
per Tannezuft Shale. It has also se
the deep erved as an important ssource rock for the Devo
onian
and Trias
ssic conventtional reserv
voirs in the re e XVI-2.1
egion, Figure
Figure XVI-2.
X mes Basin Straatigraphic Collumn
Ghadam
Source: Accheche, M.H, 20001.
June, 2013 XV
VI-3
Prior
P geological and sou 01),1 Yahi (2
urce rock sttudies by Accheche (200 2001),2 and Klett
(2000),3 as
a well as more
m recent information from oil and
d gas producction compa
anies operatiing in
Tunisia4,5,6,7 have pro
ovided valua
able informattion on the g
geologic settting and resservoir prope
erties
of the shale formations of Tunisia
a.
The
T Ghadames Basin an
nd its two sig
gnificant sha le formation
ns are locate
ed in the southern
portion of
o Tunisia. Figures
F XVI-3 and XVI--4 provide th
he Ghadame
es Basin’s sshale outline
e and
depth contours for th ot Shale”1 an
he Silurian Tannezuft “Ho nd the Uppe
er Devonian Frasnian Sh
hale.
n Tunisia’s portion of the Ghadames Basin,, the Tanne

In ezuft Forma
ation contaiins a
organic-rrich marine shale
s that grades from immature on
n the north tto post-matu
ure on the ssouth.
e mapped a 1,350-mi2 higher
We have h quality prospectivve area for tthe Tannezu
uft “Hot Sha
ale” in
the Ghad
dames Basin giving co
onsiderable emphasis tto the recen
ntly assemb
bled data on
n the
mineralogy of the shale. The western and
d northern b
boundaries of the prospective area
a are
defined by
b a change
e in shale de
eposition fro
om higher qu
uartz, lowerr clay to low
wer quartz, h
higher
clay mine
eralogy. The eastern and southern
n borders of the prospecctive area arre defined b
by the
Tunisia and
a Libya bo
order.
The
T northern portion of the uft “Hot Shalle” prospecttive area covvers 410 mi2 and
t Tannezu
has thermal maturity
y of 1.0% to 1.3% Ro, placing thiss area in th
he wet gas and conden
nsate
ective area of 940 mi2 for the Tan
window. The remaining prospe nnezuft “Hott Shale”, witth Ro
greater th
han 1.3%, is
s in the dry gas
g window, Figure XVI--5.
Deposited
D ab
bove the Tan
nnezuft “Hot Shale” is th
he thermally less mature
e Frasnian S
Shale.
2
We have
e mapped a 2,140-mi
2 prrospective area for the F
Frasnian Sha
ale in Tunisiia’s portion o
of the
Ghadames Basin. The northe
ern boundarry of the F rasnian Sha
ale prospecctive area iss the
minimum
m oil maturity
y criterion off 0.7% Ro. The
T western
n boundary o
of the prospe
ective area iis the
Tunisia and Algeria
a border. The
T eastern
n and soutthern bound
dary of the Frasnian S
Shale
prospective area is th
he Tunisia and
a Libya bo
order.
June, 2013 XV
VI-4
X
XVI. Tunisia EIA/ARI W
Figure XVI-3.. Ghadames Basin Silurian Tannezzuft Shale Outline Figure XVI-4. Ghadam
mes Basin Upper D Devonian Frasniann Shale
and Dep
pth Contours Outlline and Depth Coontours
S
JJune, 2013 XVI-5

X
T 1,210-mi2 northern and

The a eastern portion of th
he Frasnian Shale prosp
pective area
a is in
850-mi2 centtral portion o
the oil wiindow, with Ro between 0.7% and 1.0%. The 8 of the prospe
ective
area is in
n the wet ga
as and cond
densate wind
dow, with R o between 1
1.0% and 1..3%. A rela
atively
small 80-mi2 area in the southw
western portion of the Frrasnian Sha
ale prospectiive area is in the
dry gas window,
w with
h Ro above 1.3%, Figure
e XVI-6.
1.2 Reservoir
R Properties
Silurian
S Tan
nnezuft Sha
ale. The de
epth of the Silurian Ta
annezuft “Ho
ot Shale” in
n the
prospective area ran
nges from 10
0,000 ft alon
ng the north ern and easstern basin e
edge to 14,5
500 ft
asin center, averaging 10,500 ft in the
in the ba t wet gas area and 13,000 ft in tthe dry gas area,
Figure XVI-3.
X The gross
g thickne
ess of the Tannezuft
T “H
Hot Shale” iss 115 ft, with
h an organicc-rich
average net thickne
ess of 104 ft. (A thick
k package o
of Wenlockiian silty sands overliess the
erian “Hot Shales”
Llandove S with
hin the Silu
urian Tanne
ezuft Formattion. Thesse high porrosity,
potentially gas-charg
ged silty sands are not in
ncluded in ou
ur shale gass resource assessment.))
The
T TOC off the Tanne
ezuft “Hot Shale”
S averrages 5.7%. The lowe
er portion o
of the
formation
n is particula
arly organic--rich, with TOC
T %.4 The the
values of up to 15% ermal maturrity of
the Tann
nezuft “Hot Shale”
S range
es from wet gas (Ro of 1.0% to 1.3%) in the no
orthern portion of
the prosp ( o >1.3%) in the southe
pective area to dry gas (R ern portion o
of the prospe
ective area iin the
Ghadames Basin, Figure XVI-5.
Upper
U nian Frasnian Shale. The
Devon T depth off the overlyin
ng Upper De
evonian Frassnian
Shale in the prospec
ctive area ra
anges from 8,000 ft to 11,000 ft, a
averaging 8,,500 ft in the oil-
ea, 9,500 ft in the wet gas/condens
prone are g sate area, a
and 10,500 fft in the dry gas area, F
Figure
XVI-3. Th
he Frasnian Shale has a gross thickness of 19 7 ft with an organic-rich
h net thickne
ess of
177 ft. Th
he Frasnian Shale has TOC
T values that range ffrom 1% to 1 n average off 6%.3
10% with an
The therrmal maturity
y in the Fra
asnian Shale
e in the pro
ospective are
ea ranges ffrom 0.7% in the
north to over
o 1.3% Ro in the southwest, plac
cing the shalle in the oil, wet gas/con
ndensate an
nd dry
gas wind
dows, Figure
e XVI-5.
June, 2013 XV
VI-6
X
XVI. Tunisia EIA/ARI W
Figure XVI-55. Ghadames Bassin Silurian Tannezzuft “Hot Shale” Figure XVI-6. Ghadam
mes Basin Upper DDevonian Frasniann Shale
Prospeective Area Prospective Areea
S
JJune, 2013 XVI-7

X
1.3 Resource
R Assessmen
A nt
Silurian
S Tan
nnezuft Sha nnezuft “Hott Shale”, witthin its 410--mi2 wet gass and
ale. The Tan
condensa
ate prospec
ctive area, has
h resource ations of 43 Bcf/mi2 of w
e concentra wet gas and
d 3.1
arrels/mi2 off condensate. Within itts 940-mi2 d
million ba dry gas prosspective are
ea, the Tann
nezuft
“Hot Sha
ale” has a res centration of 54 Bcf/mi2.
source conc
The
T risked re
esource in-p 50-mi2 wet g
place for the overall 1,35 gas/condenssate and dryy gas
prospective area is 45
4 Tcf of shale gas and 0.8 billion b
barrels of sh
hale oil. Bassed on moderate
reservoirr properties, particularlly the med
dium level of clay co
ontent, we estimate rissked,
ble resource
es from the Tannezuft ““Hot Shale” of 11 Tcf o
of shale gass and
less than
n 0.1 billion barrels
b of shale oil, Table d XVI-2.
es XVI-1 and
Upper
U Devo
onian Frasn
nian Shale. The Frasn
nian Shale, within its o 40-mi2
overall 2,14
prospective area has resource concentratio million barrels/mi2 of oil (plus assocciated
ons of 31 m
he 1,210-mi2 oil window,, 7 million ba
gas) in th arrels/mi2 of condensate
e and 80 Bcf//mi2 of wet g
gas in
the 850-mi2 wet gas
s/condensatte window, and
a 101 Bccf/mi2 of dryy gas in the
e 80-mi2 dryy gas
window.
The
T risked re place within the overall 2,140-mi2 p
esource in-p prospective a
area is 69 T
Tcf of
shale ga
as and 28.5 billion barre
els of shale
e oil. Based
d on moderrate reservo
oir propertiess, we
estimate risked, tech
hnically reco
overable res
sources from
m the Frasniian Shale off 12 Tcf of sshale
gas and 1.4 billion ba
arrels of sha
ale oil, Table
es XVI-1 and
d XVI-2.
1.4 Recent
R Activity
Considerable
C e exploration
n activity is underway
u in the Ghadam
mes Basin, with much o
of the
activity still
s devoted to conventio
onal oil and
d gas resourrces. Cyga m Energy h
has acquired
d four
permits in the Ghadames Basin
n totaling 1.6 et acres.4 C
6 million ne Cygam’s exp
ploration pro
ogram
involves 200 km off 3D seismic
c and two deep explo ration wellss. The com
mpany reporrtedly
ed a hydraulic stimulatio
conducte on in March
h 2010 on W
Well No. 1, completed in the Tann
nezuft
Shale at a depth of 13,000
1 ft in their Sud Toz
zeur permit area. No information ha
as been provvided
on test re
esults. Cyga
am is seekin ner to furthe r develop itss four Tunisia
ng a JV partn a permit are
eas.
Chinook
C Ene
ergy Inc. has acquired a series of lease blocks in the G
Ghadames B
Basin,
totaling 1.3
1 million ne
et acres. Th
he large Sud
d Remada b
block totals 1.2 million a
acres and ta
argets
June, 2013 XV
VI-8
the Tann
nezuft Shale ns.5 The co
e as well as conventional formation ompany plan
ns to drill a deep
exploratio
on well in th
he Sud Remada lease block
b during 2013, targe
eting conventional Ordovvician
and Silurrian resourc
ces. Previous drilling intto the deepe
er, oil bearin
ng “TT” Ord
dovician rese
ervoir
showed hydrocarbon
h n potential in
n the Silurian
n Tannezuft Formation.
In
n early 2010
0, Perenco Tunisia rep
portedly drille
ed and hyd
draulically sttimulated a deep
Silurian well
w (Well #5
5) to test the
e shale gas potential in their El Fran
nig Field. T
The companyy has
not relea
ased data on
o the well’s
s performance. In late 2012, Pere
enco reporte
ed that their gas
productio
on in Tunisia
a was all fro
om conventio
onal reservo
oirs and the company w
was not producing
any shalle gas. Winstar Resourrces, a sma
all Canadian
n E&P company active
e in Tunisia, has
sponsore
ed an evalua
ation of the Silurian Ta
annezuft Sha
ale in the G
Ghadames B
Basin of southern
Tunisia. Winstar has
s acquired a series of concession
c a
areas in the basin and, with particip
pation
of ETAP (the state co
ompany), ha d to drilling a deep, test well (Sabria
as committed a 12) in 2013
3.
2. OTHER
O BAS
SINS
In
n addition to
o the shale gas
g and oil potential in the Ghadam
mes Basin, T
Tunisia mayy also
have sha
ale resource
e potential in
n the less de
efined Pelag ian Basin, lo
ocated in the
e eastern po
ortion
of the country and ex
xtending into
o the offshorre.
The
T Pelagian Basin con
ntains two hydrocarbon
h systems with establish
hed shale so
ource
rocks. The
T first is the Jurassiic-Cretaceou
us Petroleum
m System a
and its sha
ale source rrocks,
particularly the Juras
ssic Nara Fo
ormation and
d the Early C
Cretaceous (Albian) Fahdene Form
mation
contains Type II and
d III kerogen
n. The third potential sh
hale source rock is the Late Cretacceous
(Cenoma
anian to Turo
onian) Bahlo
oul Formatio
on containing
g Type II kerrogen that underlies a lim
mited
portion of
o the basin. The therm
mal maturity of these so
ource rocks ranges from
m early matu
ure to
late matu
ure with TOCs that rang
ge from 0.5% to 14%, g
generally 1%
% to 3%. T
The oil gene
erated
se Jurassic-Cretaceous source rock
from thes ks is general ly light, averraging 33o A
API.
The
T second hydrocarbo
on system in the Pela
agian Basin
n is the Te
ertiary Petro
oleum
Systems and its Ea
arly Eocene
e Bou Dabb
bous Forma
ation shale. The Bou Dabbous S
Shale
contains Type I and II kerogen with om 0.4% to 4%. The th
w TOC that ranges fro hermal matu
urities
of the shale ranges from
f early mature
m to mature, providiing a varietyy of oil gravitties, ranging from
18o to 53
3o API.
June, 2013 XV
VI-9
A number of companies have begun

n exploration
n efforts in the Pelagian
n Basin, inclu
uding
a small Canadian-lis
sted company, African Hydrocarbo
ons and sup
per-major Shell Oil. Affrican
Hydrocarrbons has a minority intterest in the
e 130,000-accre Bouhajla
a and Ktititirr carbonate-chalk
reservoirr. While th
he company
y acknowled ny also hold an
dges that iits lease accreage man
unconventional shale
e play, it plan nging fruit” first.8
ns to target the “low han
Shell
S Oil acq
quired a larg
ge lease pos
sition in the
e Pelagian B
Basin and h
has announcced a
$150 milllion explora
ation program to target convention al reservoirss as well as shale gass and
shale oil potential on its lease ac
creage.
REFERE
ENCES

a Montgomeryy, S.L., 2001 . “G Ghadames Basin, Southern Tunnisia: A
no. 5, p. 765-780.
7
2 Yahi, N., Schaefer,
S R.G., and
a Littke, R., 20001. “Petroleum m Generation andd Accumulation in the Berkine B
Basin, Eastern A
Algeria.”
P Geoloogists, Bulletin, vol.
v 85, no. 8, p. 1439-1467.
3 Klett, T.R., 2000. “ Total Petroleum
P Systems of the Trias/Ghadames Provvince, Algeria, Tunisia, and Libya-The Tannezufft-Oued
Mya, Tannnezuft-Melhir, annd Tannezuft-Ghhadames. ” U.S. Geological Surrvey, Bulletin 2202-C, 118 p.
4 Cygam Ennergy, Incorporatted, 2012.
5 Chinook Energy,
E Incorporaated, 2012.
6 Perenco Tunisia,
T 2012.
7 Winstar Reesources, 2012
8 Stafford, J., 2013. “Is Tunisia the New Hoot Spot for Energgy Investors?” w
www.rigzone.com
m accessed April 10, 2013.
June, 2013 XV
VI-10
XVII. Libya EIA/ARI W
XVII. LIB
BYA
SUMMA
ARY
This
T shale gas and sha
ale oil resou
urce assessm
ment addresses three of Libya’s m
major
hydrocarrbon basins: the Ghadames (Berkin
ne) Basin in the west, th
he Sirte Bassin in the ce
enter,
and the Murzuq
M Basin in the sou
uthwest of th
he country, F
Figure XVII--1. One add
ditional basin
n, the
Kufra Ba
asin in the southeast, is discusse
ed but is n
not quantitattively assesssed due to
o the
speculatiive and limite
ed nature off the available data.
Figure XV
VII-1. Shale Gas and Shale Oil Basins of Libya
Source: ARI, 2013.
June, 2013
3 XV
VII-1
We
W estimate that these three basin
ns in Libya ccontain 942
2 Tcf of risked shale ga
as in-
place, with 122 Tcf as the riske
ed, technicallly recovera ble shale ga
as resource, Tables XV
VII-1A
and 1B. In addition, the shale fo
ormations in these three basins also contain 613
3 billion barre
els of
risked sh d condensatte in-place, with 26.1 b
hale oil and billion barrels as the risked, techn
nically
recoverable shale oill resource, Tables
T XVII-2
2A and 2B.
Tablee XVII-1A. Shale Gas Reserrvoir Propertiees and Resouurces of Libya.

Ghadames
oss Area
Basin/Gro 2
Basic Data
(117,000 mi )
Shale Formation Tannezuft
T Frasniian
Geologic Age L Silurian
L. U. Devoonian
E Marine Marinne
2
Prospective Areaa (mi ) 16,440 3,350 2
2,580 1,5570 3700 30
Physical Extent
O
Organically Rich 115 115 115 1997 1977 197
Thickness (ft)
Net 104 104 104 1777 1777 177
In
nterval 100,000 - 11,000 10,5500 - 11,500 11,0000 - 14,500 8,000 - 10,000 9,000 - 10,000 11,000 - 12,000
Depth (ft)
A
Average 10,500 11,000 13,000 8,5500 9,500 11,500
Mod. Mod. M
Mod. Mood. Modd. Mod.
Reservoir Pressuure
Properties
Reservoir
Overpress. O
Overpress. Oveerpress. Overppress. Overpreess. Overpresss.
Average TOC (wt.. %) 5.7% 5.7% 5
5.7% 6.00% 6.0%% 6.0%
Thermal Maturityy (% Ro) 0.85% 1.15% 1.60% 0.885% 1.15%% 1.35%
Clay Content Medium Medium M
Medium Meddium Mediuum Medium m
Gas Phase Assoc. Gas W Gas
Wet Drry Gas Assocc. Gas Wet Gas
G Dry Gass
Resource
2
on (Bcf/mi )
GIP Concentratio 11.8 43.4 54.5 255.4 79.88 93.1
Risked GIP (Tcf) 96.9 72.7 70.3 199.9 14.88 1.4
Risked Recoverable (Tcf) 9.7 14.5 17.6 2
2.0 3.0 0.3
Tablee XVII-1B. Shale Gas Reserrvoir Propertiees and Resouurces of Libya.

S
Sirte Murzuq
oss Area
Basin/Gro 2
Basic Data
2
(172,0000 mi ) (97,000 mii )
Shale Foormation Sirte/Rachmat Etel Fm Tannezufft
Geologic Age U. Cretaceous U. Cretaceouus L. Siluriann
E Marine Marine Marine
2
Prospective Areaa (mi ) 35,240 19,920 5,670
Physical Extent
O
Organically Rich 2,000 600 67
Thickness (ft)
N
Net 200 120 60
In
nterval 10,000 - 12,000 11,000 - 16,4000 3,300 - 10,0000
Depth (ft)
A
Average 11,000 13,500 6,500
Reservoir Pressu
ure Normal Normal Mod. Overprress.
Properties
Reservoir
Average TOC (wt. %) 2.8% 3.6% 7.0%

Thermal Maturityy (% Ro) 0.85% 1.15% 0.90%
Gas Phase Assoc. Gas Wet Gas Assoc. Gaas
Resource
2
GIP Concentratio
on (Bcf/mi ) 24.8 37.4 6.5
Risked GIP (Tcf) 349.8 297.9 18.6
Risked Recoveraable (Tcf) 28.0 44.7 1.9
June, 2013
3 XV
VII-2
Table XVII-2A. Sh
hale Oil Reserrvoir Propertiees and Resourrces of Libya.
Ghadamess
Basin/Gross Area
A 2
Basic Data
(117,000 mi )
Shale Formattion Tannezuftt Frasnian
Geologic Agge L. Siluriann U. Devoniann
Deepositional Environment Marine Marine
2
Prospective Area (mi ) 16,440 3,350 1,570 370
Physical Extent
Organ nically Rich 115 115 197 197

Thickkness (ft)
Net 104 104 177 177
Intervval 10,0000 - 11,000 10,5500 - 11,500 8,0000 - 10,000 9,0000 - 10,000
Depthh (ft)
Averaage 10,500 11,000 8,500 9,500
Mod. Mod. Mod. Mod.
Reseervoir Pressure
Properties
Reservoir
Ovverpress. Ovverpress. Ovverpress. Ovverpress.

Averaage TOC (wt. %) 5.7% 5.7% 6.0% 6.0%
Thermmal Maturity (% Ro) 0.85% 1.15% 0.85% 1.15%
Clay Content M
Medium M
Medium M
Medium M
Medium
Oil Phase
P Oil Coondensate Oil Conndensate
Resource
2
OIP Concentration
C (M
MMbbl/mi ) 12.0 3.1 31.3 7.0
Riskeed OIP (B bbl) 98.8 5.1 24.6 1.3
Riskeed Recoverable (B
( bbl) 4.94 0.26 1.23 0.06
Table XVII-2B. Sh
hale Oil Reserrvoir Propertiees and Resourrces of Libya.
Sirte Mu
urzuq
Basin/Grosss Area 2
Basic Data
2
(1772,000 mi ) (97,0000 mi )
Shale Formmation Sirte/Rachmmat Etell Fm Tannnezuft
Geologicc Age U. Cretaceoous U. Crettaceous L. Silurian
S
D
Depositional Environment Marine Marine M
Marine
2
Pro
ospective Area (mi ) 35,240 19,920 5
5,670
Physical Extent
Orrganically Rich 2,000 6000 67

Thickness (ft)
Neet 200 1220 60
Intterval 10,000 - 12,,000 11,000 - 16,400 3,3000 - 10,000
pth (ft)
Dep
Avverage 11,000 13,500 6
6,500
M
Mod.
Resservoir Pressurre Normal Norrmal
Properties
Reservoir
Oveerpress.
Aveerage TOC (wt. %) 2.8% 3.66% 7
7.0%
Theermal Maturity (% Ro) 0.85% 1.15% 0..90%
Clayy Content Mediumm Meddium Meedium
Oil Phase Oil Condeensate Oil
Resource
2
OIP
P Concentration
n (MMbbl/mi ) 28.8 6.3 9.5
Risked OIP (B bbl) 405.9 500.5 2
26.9
Risked Recoverab
ble (B bbl) 16.24 2.02 1
1.34
June, 2013
3 XV
VII-3
INTROD
DUCTION
Libya is one of the impo

ortant hydro
ocarbon prod
ducing coun
ntries of Norrth Africa, w
with a
successfful history off oil and gas exploration, particularlyy in the Sirte
e Basin. The
e geologic se
etting
of Libya’s sedimenta
ary basins is
s complex, having
h been
n formed byy a series off tectonic evvents,
the Hercynian that separated the area into a series of h
horsts and g
grabens (uplifts and trou
ughs)
filled with
h Cambrian though Oliigocene sed
diments. Th
his tectonic overprint iss a key facttor in
defining and limiting the shale gas
g and oil prospective
e areas, as discussed ffor each of tthese
assessed
d basins of Libya.
L
The
T regionallly dominant Lower Silurian Tannezzuft basal or “hot shale
e” and the U
Upper
Devonian
n Frasnian Shale are assessed
a in the Ghada mes (Berkin
ne) Basin. T
Two distinct Late
Cretaceo achmat and Etel -- arre the subjject of our shale reso
ous shales -- Sirte/Ra ource
assessm
ment in the Sirte Basin. The
T basal “h
hot shale” w
within the Silu
urian Tanne
ezuft Formation is
the main shale forma
ation assess
sed in the Mu
urzuq Basin..
While
W our sh
hale resourc
ce assessme
ent has targ
geted three of Libya’s m
most prospe
ective
basins an
nd their shalle source roc
cks, it is like
ely that future
e exploration
n will identifyy additional sshale
resource
es in other ba
asins and formations.
June, 2013
3 XV
VII-4
1. GHADAMES
G S (BERKIN
NE) BASIN

ntroduction
The
T Ghadam
mes (Berkine) Basin is a large intra-ccratonic basin underlying
g eastern Allgeria
2
and soutthern Tunisia
a. It encomp
passes an 84,000-mi
8 a
area in northw
western Libyya and hosts two
significan
nt shale form
mations, the
e Lower Silu
urian Tannezzuft and the
e Upper Devonian Frassnian,
VII-2.1
Figure XV
In
n Libya’s portion of the Ghadames Basin, the S
Silurian Tan
nnezuft Form
mation conta
ains a
basal org
ganic-rich marine shale (“hot shale”) that increa
ases in matu
urity toward the basin ce
enter.
e mapped a 22,370-mi2 higher quality area for the Tannezzuft “hot sha
We have ale” in this b
basin,
comprisin
ng separate
e dry gas, wet gas/co
ondensate, a
and oil-pron
ne windowss. The soutthern,
northern and eastern
n boundaries
s of the Tannezuft Shale
e prospectivve area are d
defined by uplifts,
the erosiional limits of
o the Silurian, and by thermal ma e to limited thermal ma
aturity. (Due aturity
data for the
t eastern portion of th
he prospectiv
ve area, we relied on the ring of disscovered oil fields
as the eastern boun
ndary.) The western bo
oundaries off the prospe
ective area iis defined b
by the
Libya, Tu
unisia and Algerian
A bord
der.
The
T central, dry-gas porrtion of the 2,580-mi2 T hale prospective area in the
Tannezuft Sh
Ghadames Basin has
h a therm
mal maturity (Ro) rangin
ng from 1.3
3% to overr 2%. The
e wet
gas/cond spective area covers 3,3
densate pros 350 mi2 and has a Ro be % and 1.3%. The
etween 1.0%
remainde
er of the pro
ospective are 0 mi2 is in the
ea of 16,440 e oil window
w, with a Ro of 0.7% to 1
1.3%,
Figure XV
VII-3.
The
T Upper Devonian Fra
asnian Shale
e is deposite e Tannezuftt Formation. The
ed above the
Frasnian Shale is mo
ore limited in
n area and is
s thermally lless mature. We have m
mapped a 1,970-
mi2 highe
er quality pro
ospective are
ea for the Frrasnian Sha
ale in the Ghadames Bassin of Libya. The
eastern, northern and southern boundaries
b of the Frasn
nian Shale p
prospective a
area in this basin
are set by
b the minim
mum therma
al maturity criterion
c of 0
0.7% Ro. T
The western boundary o
of the
prospective area is th
he Tunisia, Algeria,
A and Libyan bord
der.
June, 2013
3 XV
VII-5
Figure XV
VII-2. Ghadam
mes Basin Straatigraphic Coluumn
Source: Seeddiq Hussein, 2004.

2
June, 2013
3 XV
VII-6
The
T northern, eastern an
nd southern outer ring off the Frasnia
an Shale pro
ospective arrea in
the Ghad
dames Basin
n, encompas
ssing an are mi2, is in the
ea of 1,570 m e oil window with Ro betw
ween
0.7% and
d 1.0%. The
e central, qu 0-mi2 portion
uite small 30 n of the Frassnian Shale prospective area
is in the dry gas win
ndow, with Ro of 1.3% to n is the 370--mi2 wet gass and
o over 2%. In between
condensa
ate area for the Frasnian
n Shale, with
h Ro betwee
en 1.0% and 1.3%, Figurre XVII-4.
1.2 Reservoir
R Properties
Silurian
S Tan
nnezuft Form
mation. The
e depth of tthe gas prosspective are
ea of the Sillurian
Tannezuft Shale in the Ghadam
mes (Berkine) Basin of Libya ranges from 10,,000 ft along
g the
northern and eastern he basin to 14,500 ft to
n edge of th oward the ba
asin center, averaging a
about
13,000 ftt in the dry gas
g area, 11
1,000 ft in th
he wet gas a
area, and 10,500 ft in tthe oil area. The
lower orrganic-rich basal
b shale unit has a net thickn ess of 104
4 ft. The TO
OC of the basal
erages 5.7%.2
Tannezuft Shale ave
Upper
U Devo
onian Frasn
nian Forma
ation. The depth of tthe prospecctive area o
of the
overlying
g Upper Dev
vonian Frasnian Shale in the Ghad
dames (Berrkine) Basin of Libya ra
anges
from 8,0
000 to 12,0
000 ft, averaging 8,50 e oil-prone area; 9,500 ft in the
00 ft in the e wet
gas/cond
densate area 00 ft in the drry gas area. The organicc-rich portion of the Frassnian
a; and 11,50
Shale ha
as an averag
ge net thickn
ness of 177 ft.
f The Frasn
nian Shale h
has TOC values ranging from
3% to 10
0%, with an average
a 6 3
of 6%.
1.3 Resource
R Assessmen
A nts
Silurian
S Tannezuft Shalle. The Tann
nezuft Shale 2,580-mi2 dryy gas prospe
e, within its 2 ective
area, has a resourc ation of 54 Bcf/mi2. W
ce concentra mi2 wet gass and
Within its larrger 3,350-m
condensa
ate prospec
ctive area, the Tannez
zuft Shale o
of the Ghad
dames (Berrkine) Basin
n has
2
resource
e concentratiions of 43 Bcf/mi
B et gas and 3 million barrrels/mi2 of ccondensate. The
of we
e concentration in the 16,440 mi2 oil prospective area is 12 m
resource million barrels/mi2.
The
T risked re
esource in-p
place for the
e prospectivve areas of the Tannezzuft Shale iss 104
billion ba
arrels of sha
ale oil/conde
ensate and 240
2 Tcf of w
wet and dry shale gas. Given conccerns
with pres
sence of clays but oth orable reserrvoir properrties, we esstimate a rissked,
herwise favo
ble shale oiil/condensate resource of 5.2 billion barrels an
nd 42 Tcf o
of wet
and dry shale
s gas.
June, 2013
3 XV
VII-7
Figure XVII-3. Ghadames Basin

B Silurian
n Tannezuft Shhale Outline aand Thermal M
Maturity
Source: ARI, 2013
Figure XVII-4. Ghadames Basin Upper Devo

onian Frasniaan Shale Outliine and Therm
mal Maturity
Source: ARI,, 2013
June, 2013
3 XV
VII-8
Upper
U Devon
an Shale hass resource cconcentratio
ons of
31 millio mi2 for oil (p
on barrels/m plus associated gas) iin the 1,570-mi2 oil w
window, 7 m
million
mi2 of conden
barrels/m nsate and 8 Bcf/mi2 of wet he 370-mi2 w
w gas in th wet gas/condensate win
ndow,
2 2
and 93 Bcf/mi
B of dry
y gas in the 30-mi
3 dry gas window.
The
T risked resource in
n-place for the prospe as is 23 b
ective area billion barre
els of
oil/conde
ensate and 33
3 Tcf of we
et/dry shale gas, with rissked, recove
erable shale
e oil of 1.2 b
billion
barrels and 4 Tcf of wet/dry
w shale gas.
June, 2013
3 XV
VII-9
2. SIRTE
S BASIN
Introduc
ction and Geologic
G Setting
S
The
T Sirte Ba
asin, covering an area of mi2 in centrral Libya, is the most prolific
o 172,000 m
hydrocarrbon basin in North Africa. The Sirte Basin ccontains sixtteen giant o
oil and gas fields
(defined as fields co
ontaining mo
ore than 500
0 million barrrels of oil eq
quivalent. T
To date, the Sirte
Basin ha
as yielded 45
5 billion barrels of oil an
nd 33 Tcf off natural gas discoverie
es (SEPM S
Strata,
2013). The
T Upper Cretaceous
C Sirte/Rachm
S at and Etel shales are tthe principal source rockks for
these hydrocarbon discoveries
d and
a are the two organic--rich shale fformations a
addressed byy this
e study, Figure XVII-5.1
resource
Figure XVII-5. Sirte Basin Stratigrraphic Column
Soource: Seddiq Hussein, 2004
June, 2013
3 XVIII-10
2.1 Geologic
G Se
etting
The
T Sirte Bas
sin consists of a series of
o horst and
d graben stru
uctures trend
ding northwe
est to
southeas
st including the Hameim
mat, Agedab
bia, Wadaya
at, Hagfa an
nd Zella, as shown in F
Figure
XVII-6. These troug
ghs contain the two ma
ain shale forrmations eva
aluated by tthis study - - the
Upper Cretaceous Sirte/Rachma
S at Shale and
d the underl ying Upper Cretaceouss Etel Shale.. We
have ma
apped an oil--prospective
e area totalin mi2 for the S
ng 35,240 m Sirte/Rachma
at Shale in tthese
2
five troug
ghs, similarly, we have mapped a 19,920-mi
1 w
wet gas/con
ndensate are
ea for the areally
more limited Etel Sha
ale in these five troughs
s.
Figurre XVII-6. Sirte Basin Net Shale Isopach for the Sirte/R
Rachmat Shalee
Source: ARI,
A 2013
June, 2013
3 XVIII-11
2.2 Reservoir
R Properties
Sirte/Rachm
S mat Shale. Within th
he oil-prosp
pective area
a of the S
Sirte Basin,, the
Sirte/Rac
chmat Shale
e is present in a series of
o troughs at depths of 10
0,000 to 12,000 ft, avera
aging
11,000 ftt, Figure VX
XII-7. The to
otal Sirte/Ra
achmat Form
mation has a gross thickkness of 2,0
000 ft
with a net organic-rrich shale se
ection of 20
00 ft. The TOC of the
e organic–ricch shale intterval
averages
s 2.8% and the
t shale is in the oil win
ndow (Ro of 0.7% to 1.0%
%).
Figure
F XVII-7. Sirte Basin, Sirte/Rachmat
S Shale Prospeective Area
Source: ARI,
A 2013
Etel
E hale’s 19,920-mi2 prosp ective area underlies th
Shale. The Etel Sh he Sirte/Racchmat
Shale at depths of 11,000 to 16,,400 ft, averraging 13,50
00 ft, Figure XVIII-8. Th
he Etel Form
mation
is about 600 ft thick, of which 120 net ft is orrganic-rich sshale. The T
TOC of the o
organic-rich sshale
is high at
a 3.6%. Th
he thermal maturity
m (Ro) of 1.0% to
o 1.3% place
es the Etel Shale in the
e wet
gas/cond
densate wind
dow.
June, 2013
3 XVIII-12
Figure XV
VII-8. Sirte Baasin, Etel Shal e Prospectivee Area
Source: ARI, 2013
2.3 Resource
R Assessmen
A nt
Sirte/Rachm
S mat Shale. The
T Upper Cretaceous
C Sirte/Rachm
mat Shale, w
within its 35
5,240-
mi2 prosp
pective area
a for oil, has
s an oil conc of 29 million barrels/mi2, plus assocciated
centration o
gas. The
e risked sha
ale oil in-plac
ce is estimated at 406 b
billion barrelss, with 16.2 billion barre
els as
risked, te
echnically re
ecoverable. In addition, we estimate
e a risked associated sh
hale gas in-place
cf, with 28 Tcf as the risk
of 350 Tc ked, technic able shale g
cally recovera gas resource
e.
Etel
E Shale. The Upper Cretaceous
C Etel Shale h mi2 for
has a prospective area of 19,920 m
wet gas and condensate. The Etel
E Shale ha
as resource
e concentratiions of 6 milllion barrels of oil
and 37 Bcf
B of wet gas per squa
are mile. With
W risked re
esources in--place of 51 billion barre
els of
oil/conde
ensate and 298
2 Tcf of wet
w gas, the
e risked, tecchnically reccoverable sshale oil and
d gas
resource
es are estima
ated at 2.0 billion
b barrels
s of shale oill/condensate
e and 45 Tcff of shale ga
as.
June, 2013
3 XVIII-13
3. MURZUQ
M BASIN
B
Introduc
ction
The
T Murzuq Basin exten arge 97,000 -mi2 area in
nds over a la n the southw
western portion of
Libya (ex
xtending sou
uthward into the Republic of Chad), Figure XVIII-9. With itss remote loca
ation,
the Murz
zuq Basin remained
r un
ndiscovered and unpro
oven for hyd
drocarbons until the 19
980s.
Since then, four larg
ge discoverries, includin
ng the giantt Elephant ffield plus numerous sm
maller
ccount for 5.4
fields, ac 4 billion barrrels of disco
overed oil in--place, with 1.75 billion b
barrels estim
mated
as recove
erable.
Figurre XVII-9. Bassin Outline and

d Structural Contour
C Map (G
Granitic Basem
ment) for the Murzuq Basinn
Source: ARI, 2013
June, 2013
3 XVIII-14
The
T primary shale source rock add
dressed in the Murzuq Basin resou
urce study is the
Lower Silurian Tanne y the “hot sh ale” interval at the base of the forma
ezuft Formattion, notably ation,
VII-10.4 Ano
Figure XV other potential source ro asin, not furrther assesssed due to la
ock in this ba ack of
data and concern witth respect to
o thermal ma e Middle Devvonian Awayynat Formation in
aturity, is the
the deep
p center of th
he basin.
Figure
F XVII-100. Subsurface Stratigraphy for the Murzuuq Basin.
Source: Belaid at al., 20010
3.1 Geologic
G Se
etting
The
T Murzuq Basin is bo
ounded on the east byy the Tibistti Arch, on the west byy the
Tihembada Arch (wh
hich separattes it from th
he Illizi Basin
n in Algeria)), on the north by the Q
Qurcal
Arch (wh
hich separate
es it from th
he Ghadame
es Basin), a
and on the ssouth by the Libya and Chad
borders. Figure XVII-114 provide
es a generalized cross-ssection acrosss the northe
ern portion o
of the
Murzuq Basin.
B
June, 2013
3 XVIII-15
Figuree XVII-11. Cro

oss-Section foor Murzuq Bassin
Soource: Belaid at al., 2010
The
T intra-cratonic Murzu
uq Basin con
ntains a serries of troughs and upliffts that dom
minate
the basin
n’s depositio
on and hyd
drocarbon po
otential. O f particular significance
e is the Aw
wabari
sin where a series of co
Trough in the center of the bas ored wells (F3-NC174 a
and H29-NC
C115)
en drilled that provide a most valua
have bee able data se
et for this re
esource asse
essment. W
Within
this troug
gh, the Silurian Tannez
zuft Formatio
on, particula
arly its lowe
er “hot shale
e” interval, is the
primary hydrocarbon
h n source roc
ck for the oil discoveriess in the Murzzuq Basin. The presen
nce of
this shale
e interval is illustrated by
b the cross n Figure XVII-12,4 with tthe cross-se
s-section on ection
location provided
p on Figure XVII--13.4
3.2 Reservoir
R Properties
Lower
L Silurrian Tanne
ezuft Shalle. The Silurian Tannezuft F
Formation ((early
Llandove
erian) consis
sts of dark gray to black graptolitic sshales with in
ntervals of ssiltstone and
d fine-
grained sandstone
s deposited in a marine environment.5
June, 2013
3 XVIII-16
Figurre XVII-12. Geeneral Stratigrraphy and Cro

oss Section (A
A-A’) for Four M
Murzuq Basinn Study Wells
(See Figgure XVIII-13 for Cross-Secction Locationns)
Souurce: Belaid et al.,

a 2010
June, 2013
3 XVIII-17
X
Fig
gure XVII-13. Awabari Trough of thee Murzuq Basin
Sourcee: Belaid at al., 2010
JJune, 2013 XV
VII-18
We
W have ma 70-mi2 oil-prrospective a
apped a 5,67 area in the ccenter of the Murzuq B
Basin,
Figure XVII-14.
X The
e depth of th e” in the prospective are
he Tannezufft “hot shale ea of the Mu
urzuq
Basin ranges from 3,300
3 t 10,000 ftt in the central part of the basin.6 The
ft on the flanks to
outcrops of the Ta
annezuft Formation in the uplifts surrounding
g the basin
n provide u
useful
information on forma
ation thickne
ess and othe
er properties . While the overall Tannezuft Form
mation
can be up to 1,000 ftt thick, only the basal “hot shale” un
nit, with thickkness rangin
ng from 30 to
o 100
ft has been included in our resou
urce assessm
ment.
Figure XVII-114. Shale Prosspective Areaa of the Murzuq Basin.
Source: ARI, 2013
 In
n the NC-11 15 license area, 146 m of core w was taken ffrom 22 we ells, all of w
which
penetrated th he Tannezufft Formation. Here the basal Tanne ezuft shale serves as b both a
seeal as well as
a the sourc ce rock for th
he productive e Mamuniyaat sandstone e formation iin the
lic
cense area. In this are ea, the “hott shale” exissts as a norrth to south belt with limmited
width,
w rangingg in thicknes
ss up to 35 m,
m with the t hickest deveelopment in the southea astern
June, 2013
3 XVIII-19
portion of the
e prospective
e area. Thee TOC of the e “hot shale”” ranges from
m 3.2% to 2
23.1%
average 9.9%
(a %) and the shale has a thermal ma aturity of Ro 0.83% to 00.95% in well A1-
NC115,
N placing the shale in the late
e oil maturityy window. The maturitty of the shaale is
believed to in
ncrease towaard the south
hern portion of the prosppective area
a. 4
 Core
C analysis
s from a se
econd well, F3-NC174,
F recorded TO OC values tthat ranged from
3.7% to 4.7%
% (average 4.0%), with th urity of 0.7 Ro.4
hermal matu
 A detailed an
nalysis of the e E1-NC174 well, drilledd in 1997, prrovides further informatio on on
th
he properties
s of Tannezuft “hot shale” in the Aw wabari Troug gh. The core e data show ws the
presence of Type
T II (oil prone)
p keroggen with TOOC values off up to 13%. The “hot sshale”
xisted over an interval from
ex f 7,244 to
t 7,267 ft, wwith leaner bbut still orga
anic-rich inte
ervals
above and be elow the “hott shale” interval, Figure XVII-15. 7
Upper
U Silurrian Tanne
ezuft Shale
e. nvestigation was
An in--depth geocchemical in
performe
ed recently on a serie
es of repres
sentative sh
hale sample
es from the
e Upper Sillurian
Tannezuft Formation urzuq Basin..5 The purp
n of the Mu pose of thiss study was to establish the
ock quality of
source ro o the exten
nsive Silurian Tannezuftt “cool shale
es” at the to
op of the Sillurian
section. (Geochem
mical analysis of the Up
pper Siluria n Shale in Jordan, as reported in
n our
separate
e Jordan cha ated the pottential for p rospective o
apter, indica organic-rich shale within the
dition to the organic-rich shale in the
Upper Silurian in add e Lower Silurian.)
The
T rock sam
mples from th
his upper intterval were m e III kerogen (gas prone)) with
mainly Type
some co
ontribution of
o mixed Type II and III kerogen ((gas/oil pron
ne) from marine/terrige
enous
sources, Figure XVIII-16.5 The rock samples showed a
an early to in
ntermediate stage of the
ermal
maturity with Tmax values of 435°
4 to 445°C, indicatin
ng the sourrce rock was in the early to
middle oil window (R
Ro of 0.6% to
o 0.9%) The
e organic co
ontent of the
e samples w
was characte
erized
as poor to
t fair, with TOC
T values ranging from
m 0.4% to 1..28%, indica
ating a mixed
d oxic to sub
b-oxic
depositio
onal environm
ment.
While
W the ove
erall Tannez
zuft Shale Fo
ormation in tthe Murzuq Basin is on
n the order o
of 300
m thick, it appears that only the
e basal (“hott shale”) uniit of the Silu
urian Tannezzuft Formatiion is
sufficienttly organic-rich to be included in ourr shale resou
urce assessm
ment.
Devonian
D Awaynat Wa
anin Forma
ation. The Middle-Late
e Devonian Awaynat W
Wanin
Formatio
on is also considered a potential
p sha
ale source ro
ock in the M
Murzuq Basin
n. However, only
limited in
nformation ex
xists for this unit. To da
ate, only the Silurian Tan muniyat has been
nnezuft-Mam
establish
hed as an efffective petro m.8
oleum system
June, 2013
3 XVIII-20
Figure XV
VII-15. TOC Values within th e E1-NC174 C
Core.
Modified from
m Luning et all. 2003.
Soource: Butcher, 2013.

2
June, 2013
3 XVIII-21
Figure XV
VII-16. Cross Plot
P Between S2 mg HC/g Rock
R and %TOOC for Tannezzuft Formationn, Field A, NC--115,
Murrzuq Basin.
Modified from GeoM
Mark Research, LTD (2009).
Soource: Hodairi, T. and Philp, P.,, 2011.
3.3 Resource
R Assessmen
A nt
The
T Tannezu e”, within the 5,670-mi2 prospective
uft “hot shale e area of th
he Murzuq B
Basin,
centration of 10 million barrels/mi2 of oil plus associated gas. The rrisked
has a resource conc
shale oil resource in--place is esttimated at 27
7 billion barrrels of shale
e oil plus 19 T
Tcf of assocciated
shale gas, with 1.3 billion
b barrells of shale oil
o and 2 Tccf of associa
ated shale gas as the rissked,
ble resource
e.
June, 2013
3 XVIII-22
4. KUFRA
K BAS
SIN
Introduc
ction
The
T Kufra Basin is a la 00-km2, rem
arge 400,00 mote intra-cra
atonic sag basin locate
ed in
southeas
stern Libya. The Paleoz
zoic structura
al and depossition historyy of the Kufrra Basin is similar
to that off the Murzuq
q Basin, dis
scussed earllier in this cchapter. How
wever, there
e is conside
erable
uncertain
nty as to the presence off sufficiently organic-rich
h source roccks in this ba
asin.
The
T Lower Silurian Tannezuft Forma
ation is desc ribed as up to 130 m thick in outcro
ops at
n margins, Figure XVII--17.9 Howe
the basin ever, the ba sal section of the Tann
nezuft Form
mation
containin
ng the Siluria
an “hot shale
e” in the Murzuq Basin a
appears to b
be missing in outcrops a
along
the north stern margins of the basin.10
hern and eas
In
n addition, the
t “hot sha
ale” unit was oration wellss drilled to date,
s absent in three explo
having been
b replace
ed by siltstones and sandstones in
n two dry exxploration we
ells drilled in the
northern part of the
e basin by AGIP
A in the late 1970ss and early 1980s (Bellini, 1991). The
absence of lower Silurian shales in these tw
wo Kufra Ba ation wells - - A1-NC-43
asin explora 3 and
3 - - suggestts that this area
B1-NC43 a may hav
ve been dep
posited as a sandy delta
a during the early
Silurian, representing the westw
ward continu
uation of the
e sandy low
wer Silurian iin western E
Egypt
he Tannezu
where th uft basal “ho
ot shale” is XVII-18.10
s also abse nt, Figure X Since then,, one
additiona
al exploration
n well drilled s noted the absence of the lower Siilurian “hot sshale”
d in 1997 has
in the Ku
ufra Basin.
an, organic-rich shales may be pre

Lower Siluria esent in the part of the Kufra
e western p
Basin.11 However, th
he areal disttribution of th
his shale un
nit is laterallyy highly varia
able with Sillurian
ot shale” occ
basal “ho currences de
eposited as linear featurres and patcches, surrounded by are
eas in
e basal “hot shale” is absent.10
which the
June, 2013
3 XVIII-23
Figure XVII-17. Stratigraphic Columnn of the Kufra Basin
June, 2013
3 XVIII-24
Fig
gure XVII-18. Early Silurian
n Paleogeograaphy of the Kufra Basin
Based on Keeleey, 1989; Semtneer et al., 1997; Selley,
S 1997b; Keeeley & Masoudd, 1998 and Luniing, 1999.
Source: Luuning et al. 19999
June, 2013
3 XVIII-25
XVII. Libya World Shale Gas and Shale Oil Resource Assesssment
EIA/ARI W
RECENT
T ACTIVITY
Y
Libya’s oil and gas exp

ploration, including the assessmen
nt of its sh
hale oil and
d gas
es came to a halt durin
resource ng the upris
sing that ovverthrew the
e governme
ent of Muam
mmar
Gaddafi. However, in late 201
12, the Cha
airman of L
Libya’s Natio
onal Oil Company, Mr. Nuri
Berruien, announced
d that the co
ompany is ex ptions for exxploring its unconvention
xamining op nal oil
and gas resources. One option
n discussed by Chairma
an Berruien is to intern
nally evaluate the
unconventional reso
ources and
d then brin
ng in intern
national companies w
with expertisse in
unconventional resou
urce explora velopment.122
ation and dev
REFERE
ENCES
1 Hussein Seddiq, 2004. “Libya Explorationn Overview and Future

F Opportunnities” National O
Oil Corporation, April.
a Montgomeryy, S.L., 2001. “G Ghadames Basin, Southern Tunnisia: A
no. 5, p. 765-780.
7
3 Rahmani, A., Kaced, M. and Arab, M., 20112. “The Potenttial of Shale Gass Plays in Algeriaa.” Sonatrach Amont/Internationnal Gas
Union Shale Gas Workshhop, Oran, Algeria, February.
4 Belaid, A. et al., 2010. “Thermal Historry and Source Rock
R Characteriization of a Paleeozoic Section in the Awbari TTrough,
Murzuq Bassin, SW Libya.” Elsevier
E Marine and
a Petroleum Geology,
G vol. 27 , p. 612–632.
5 Hodairi, T. and Philp, P., 2011.
2 “Geochemical Investigatiion of Tanezzuftt Formation, Muurzuq Basin, Libyya.” AAPG Searrch and
Discovery Article #10344, posted Augustt 8, 2011, adapteed from expand ed abstract pressentation at AAP PG Annual Convvention
and Exhibition, Houston, Texas,
T USA, April 10-13, 2011.
6 Aziz, A., 2000. “Stratigrapphy and Hydrocaarbon Potential of
o the Lower Palleozoic Successsion of License N NC-115, Murzuq Basin,
SW Libya.”” in Geological Exploration
E in Muurzuq Basin, Chaapter 16, Elsevieer Science B.V.,, p. 349-368.
7 Butcher, A.,
A 2013. “Chitinnozoans from thee Middle Rhuddaanian (Lower Llaandovery, Siluriaan) ‘Hot’ Shale iin the E1-NC1744 Core,
Murzuq Baasin, SW Libya.” Elsevier Review
w of Palaeobotanny and Palynolo gy xxx (2013).
8 Hallet, D., 2000. “Petroleuum Geology of Libya.”
L Elsevier, Amsterdam, thee Netherlands, pp. 508.
9 Grignani, D., E. Lanzoni and
a Elatrash, H.,H 1992. “Palaeeozoic and Mesoozoic Subsurfacce Palynostratigraphy in the Al Kufrah
Basin, Libyya.” Proceedings of the 3rd Sym
mposium on the Geology of Libyaa (Tripoli 1987), p. 1159-1227.
10 Lüning, S.
S et al. 1999. “Re-evaluation of SE Libya, NE Chhad): Does the Source
o the Petroleum Potential of thee Kufra Basin (S
Rock Barrier Fall?” Marinee and Petroleum
m Geology, vol. 16, p. 693-718.
11 Klitzsch, E.H., 2000. “The “ Structural development ofo the Murzuq and Kufra Bassins Significancee for Oil and M
Mineral
Explorationn.” in Geologicaal Exploration in Murzuq Basin, Chapter
C 7, Elsevvier Science B.V
V., p. 143-150.
12 Bauerovaa, L., 2012. “LLibya Renews Focus
F on Naturaal Gas, Plans to Explore Shale.” www.Bloomberg.com, Novem
mber 7,
2012.
June, 2013
3 XVIII-26
XVIII. Egyptt EIA/ARI W
XVIII.. EGY
YPT
SUMMA
ARY
Egypt
E has fou
ur basins in the Western
n Desert with
h potential fo
for shale gass and shale oil - -
Abu Gha
aradig, Alam
mein, Natrun and Shous
shan-Matruh VIII-1.1 The target horizzon is
h, Figure XV
nic-rich Khattatba Shale, sometimes referred to a
the organ as the Kabriit Shale or S
Safa Shale, w
within
er Middle Jurrassic Khatatba Formatio
the large on.
Fiigure XVIII-1. Hydrocarbon

n Basins of th e Western Desert, Egypt
Source: ARI, 2013.
June, 2013 XV
VIII-1
Our
O assessm
ment is that the Khatatb
ba Shale co
ontains apprroximately 5
535 Tcf of rrisked
shale ga
as in-place, with
w 100 Tc
cf of risked, technically rrecoverable shale gas resources, T
Table
XVIII-1. In addition, we estimatte that the Khatatba
K Sh ale containss about 114 billion barre
els of
risked sh
hale oil in-p
place, with 4.6 billion barrels
b of riisked, techn
nically recovverable sha
ale oil
es, Table XVIII-2.
resource
Table XVIII-1. Shaale Gas Reserrvoir Propertiees and Resources of Egypt

Abu Gharadig Alamein Naatrun Sh
houshan-Matruh
Basin/G
Gross Area
Basic Data
2 2 2 2
(7,670 mi ) (2,340 mi
m ) (4,8660 mi ) (7,080 mi )
Shale Formation Khatatba Khatatbba Khaatatba Khatatba
Geolo ogic Age M. Jurassic M. Jurasssic M. Juurassic M. Jurassic
Depositionaal Environment Marine Marinee Maarine Marine
2
Prospective Arrea (mi ) 6,840 2,340 4,860 4,420
Physical Extent
Organically Rich 1,500 1,000 1,200 1,000

Thickness (ft)
Net 300 200 2
240 200
Interval 11,000 - 13,0000 13,000 - 155,000 13,000 - 15,000 1
10,000 - 15,000
Depth (ft)
Average 12,000 14,0000 14,000 13,000
Reservoir Presssure Normal Normall No rmal Normal
Properties
Reservoir
Average TOC (wt.

( %) 4.0% 4.0% 4..0% 4.0%
Thermal Maturrity (% Ro) 1.15% 0.85% 0.885% 1.15%
Clay Content Low/Medium Low/Med ium Low/M
Medium Low/Medium
Gas Phase Wet Gas Assoc. Gas
G Assooc. Gas Wet Gas
Resource
2
GIP Concentraation (Bcf/mi ) 99.2 29.1 35.0 71.3
Risked GIP (Tccf) 325.7 16.7 41.6 151.2
Risked Recoveerable (Tcf) 65.1 1.3 3
3.3 30.2
ble XVIII-2. Sh
Tab hale Oil Reservvoir Propertiees and Resourrces of Egypt
Abu Gharadig
g Alamein
n Nattrun Sho
oushan-Matruh
Basin//Gross Area
Basic Data
2 2 2 2
(7,670 mi ) (2,340 mi ) (4,860 mi ) (7,080 mi )
Shale Formation Khatatba Khatatb
ba Khaatatba Khatatba
Geologic Age M. Jurassic M. Jurasssic M. Juurassic M. Jurassic
nal Environment
Deposition Marine Marine Maarine Marine
2
Prospective Area
A (mi ) 6,840 2,340 4,8860 4,420
Physical Extent

Thickness (ft)
Net 300 200 2440 200
Interval 11,000 - 13,0000 13,000 - 155,000 13,000 - 15,000 100,000 - 15,000
Depth (ft)
Average 12,000 14,000 14,000 13,000
Reservoir Preessure Normal Normall Norrmal Normal
Properties
Reservoir
Average TOC (wt. %) 4.0% 4.0% 4.0% 4.0%

Thermal Matu
urity (% Ro) 1.15% 0.85% 0.885% 1.15%
Clay Content Low/Medium Low/Mediium Low/M
Medium L
Low/Medium
Oil Phase Condensate Oil O
Oil Condensate
Resource
2
OIP Concentraation (MMbbl/mi ) 14.3 25.1 300.1 7.9
Risked OIP (B
B bbl) 47.1 14.4 355.9 16.8
Risked Recovverable (B bbl) 1.88 0.58 1..43 0.67
June, 2013 XV
VIII-2
INTROD
DUCTION
The
T northern
n portion off the Weste
ern Desert of Egypt ccontains a sseries of basins
underlain
n by organ
nic-rich sha
ales that have
h provid
ded the so
ource for the conventtional
hydrocarrbons production from these basins
s. The prim
mary hydroca
arbon basinss in the We
estern
Desert in
nclude Abu Gharadig,
G Alamein,
A Nattrun and Sho
oushan-Mattruh. The W
Western Dessert is
the locattion of man
ny of the major oil and
d gas fields of Egypt, including th
he more reccently
discovere
ed, large Jurrassic fields of Kanayes (discovered
d in 1992), O
Obayeid (disscovered in 1
1993)
ms (discovered in 1997)).2
and Sham
The
T basins have
h a thick
k sedimentarry sequence
e comprising
g Paleozoic through Te
ertiary
strata tha
at exceed 15
5,000 feet, Figure
F XVIII-2.3 Despite
e many yearrs of successsful discove
ery of
conventio
onal oil and gas deposiits, the large
e Western D
Desert hydro
ocarbon bassins of Egyp
pt are
still only lightly explored, particularly for theirr deeper form
mations.
The
T focus of our shale re
esource stud
dy is the Kh
hatatba Shale within the
e Middle Jurrassic
Khatatba
a Formation, also called the Kabrit Shale
S and the
e Safa Shale VIII-3.4
e, Figure XV
June, 2013 XV
VIII-3
Figure XVIIII-2. Generalized Lithostratigraphic Colum

mn of the Wesstern Desert oof Egypt.
Source: Younees, 2012 (Modifieed after Abdou,1 998).
June, 2013 XV
VIII-4
Figuree XVIII-3. Khaatatba Formatiion and Kabritt (Safa) Shale,, Shoushan-M

Matruh Basin, W
Western Deseert.
Source: Dolson, 2000.
June, 2013 XV
VIII-5
Egypt’s
E geolo
ogic history is complex and a full d iscussion off its geologyy and tectonics is
beyond the
t o this resource assessm
scope of ment. Howe hapter provides an overview
ever, this ch
that is inttended to he
elp place the
e shale oil an
nd gas resou
urces of the Western De
esert into con
ntext.
As such,, the study examined
e th
hree major shale
s source
e rocks in th
he Western Desert of E
Egypt
before es
stablishing th
he Middle Ju
urassic Khattatba Shale a
as the prima
ary target.
Silurian.
S A thick
t sequen
nce of Siluria
an siltstone, estimated a
at about 200
0 to 300 m iin the
Basur-1 and Kohka--1 wells, exis
sts in the no n Desert.5 T
orthwestern portion of tthe Western These
nes and silts
sandston stones thin to
t the south
h and east a
as shown byy the Foram
m-1 and She
eiba-1
wells.6 The
T sandsto
one and silts
stone units appear to re
est directly on Upper O
Ordovician glacial
y evidence of Silurian organic-rich
deposits without any o shales.8 Th
he Western Desert of E
Egypt
lacks a Silurian
S Tannezuft (“Hott Shale”) sou
urce rock eq
quivalent du
ue to a paleo-basementt high
and eros an sedimentts.7
sion of Siluria
Cretaceous.
C Cretaceou
us-age shale
e source ro
ocks within tthe Alam El-Bueib and
d Abu
Roash fo
ormations ex
xist across much
m of the Western
W De
esert. Howe
ever, these sshales have been
classified
d as margin
nal to moderrate source rock qualityy for oil and
d gas generation, with TOC
values generally rep
ported at les n, the Cretaceous-age ssource rockks are
ss than 2%. In addition
y immature in
thermally udy area.8 D
i significantt portions off the Westerrn Basin stu Due to these
e less
favorable
p and
a limited data,
d we ha
ave not included these Cretaceouss-age
source ro
ocks in our shale
s oil and
d gas resourc ent.
ce assessme
Jurassic.
J During
D ate Triassic and Jurasssic, a series of rift basin
the la ns formed in the
Western Desert. These
T rift ba
asins and their subseq
quent extension during the Cretacceous
provided the setting for the impo
ortant Khata
atba Formatiion and its tthick, black sshale depossition.
The Khattatba Shale (also called the Safa Sh
hale) has se
erved as the
e source rock for much o
of the
oil and ga
as found in the n Desert.2,3
t Western
The
T larger Khatatba
K Forrmation rang 000 feet to over 2,000 feet thick in the
ges from 1,0
Western Desert. The type sec
ction of the Kabrit (Sa fa) Shale M
Member with
hin the Kha
atatba
on ranges in thickness frrom 0 to ove
Formatio er 600 feet in
n the Weste
ern Desert, w
with an estim
mated
net pay of 0 feet, XVIII--Figure 4.3,9,2,10
o 200 to 300
June, 2013 XV
VIII-6
Fig
gure XVIII-4. Middle Jurasssic Khatatba FFormation Grooss Isopach
Source: ARI, 2013.
Detailed
D source rock ev
valuations of
o core sam
mples from tthe Shushan-1X well in
n the
southern portion of the Abu Gha
aradig Basin provided im
mportant datta on the resservoir prope
erties
of the Khatatba
K Shale. The TOC
T of the
e shale vari ed from 3.6
6% to 4.2%
% with a vittrinite
reflectance (Ro) of 1.0%
1 to 1.3%
%, placing the
t shale prrimarily in th
he wet gas and conden
nsate
window, Figure XVIII-5.3 The sh
hale contains
s mixed vitriinite-inertinitte kerogen d
derived from
m land
plants an
nd algae, im
mplying a mix
xture of marrginal marin e and contin nic matter.11 The
nental organ
combinattion of maximum tempe
erature and kerogen
k type
e places the
e Khatatba S
Shale primarily in
the wet gas/condens
g sate and volatile oil wind
dows with siignificant associated plu
us free gas iin the
pore space.
June, 2013 XV
VIII-7
Figure XV
VIII-5. TOC an
nd Maturity Daata, Jurassic- and Cretaceo us-Age Sourcce Rocks, Wesstern Desert, E
Egypt
Source: Youunes, 2012
ABU GH
HARADIG BA
ASIN
Geologic
G Se e 7,670-mi2 Abu Gharad
etting. The dig Basin iss an east-w
west trending
g half
graben with
w a depth to basemen
nt that excee
eds 30,000 ffeet. The ba nded on the north
asin is boun
by the Qattara Ridge
e and on the
e south by th
he Sitra Plattform. The JJurassic-age
e Khatatba S
Shale
dered the ma
is consid ajor hydroca e rock in thiss basin.2 We
arbon source 40-mi2
e have identified a 6,84
prospective area in this basin after exclud
ding the we
estern portio
on of the ba
asin which lacks
urassic depo
Middle Ju osits, Figure XVIII-4.
Reservoir
R Prroperties (P
Prospective 40-mi2 prospective area
e Area). Wi thin the 6,84 a, the
depth of the Khatatb
ba Shale in the Abu Gharadig
G Bassin ranges from 11,000
0 to 13,000 feet,
averaging 12,000 fee
et. The gros
ss interval off the Khatatb
ba Formatio
on ranges fro
om near 0 to
o over
et, averaging
2,000 fee g about 1,50
00 feet thick
k. The net sshale, using a net to gro
oss ratio of 0
0.2, is
estimated
d at 300 fee
et. Based on
n grain and bulk densityy data from tthe Betty-1 w
well, drilled iin the
south central portion of the basin
n, the porosity ranges fro
om 2.4% to 8.4%, avera
aging 5.7% fo
or six
June, 2013 XV
VIII-8
core sam
mples. The TOC
T of the shale, using
g data from the Shushan-1X well, ra
anges from 3.6%
to 4.2%, averaging 4%,
4 with therrmal maturity
y (Ro) value
es of 1.0% to
o 1.3%.
Resource
R As e 6,840-mi2 prospective
ssessment.. Within the e area of th
he Abu Gha
aradig
Basin, th
he Khatatba Shale has a resource concentrati on of 99 Bccf of wet ga
as and 14 m
million
barrels of nsate per mii2. The riske
o oil/conden ed resource
e in-place fo
or wet gas in
n the prospe
ective
area is estimated
e at
a 326 Tcf, with 65 Tcff as the rissked, techniccally recove
erable shale
e gas
resource
e, Table XVIIII-1. The risked resourc
ce in-place fo
or oil/conden
nsate in the prospective
e area
is estima
ated at 47 billion
b barrels with 1.9 billion
b barrells of the rissked, techniccally recove
erable
shale oil resource, Ta
able XVIII-2.
ALAMEIN BASIN
Geologic
G etting. The Alamein Basin is a larg
Se ge Jurassic rrift basin in the northwe
estern
o the Western Desert which was furrther extend ed during th
portion of he Cretaceou
us. The onsshore
portion of
o the basin is
i bounded on
o the north
h by the Med
diterranean Sea and on the south b
by the
Qattara Ridge.
R The Jurassic-age
e Khatatba Shale,
S which
h contains m
mixed Type II and III kero
ogen,
appears to be the main
m shale oil
o and gas target in th is basin. R
Remarkably, the entire basin
appears to be prospe
ective for the
e Khatatba Shale.
S
Reservoir
R Prroperties (P
Prospective 40-mi2 prospective area
e Area). Wi thin the 2,34 a, the
ba Shale in the Alamein Basin range
depth of the Khatatb es from 13,0
000 to 15,000 feet, avera
aging
eet. The gro
14,000 fe oss interval of
o the Khatatba Formatio
on averagess 1,000 feet with a porossity of
5.7%. Organic
O conttent ranges up to 10%, with an ave
erage of 4%
%, and the sshale is in th
he oil
thermal maturity
m wind
dow (Ro of 0.8%
0 %).12
to 1.0%
Resource
R ssessment.. Within the 2,340-mi2 prospective area of the
As e Alamein B
Basin,
the Khatatba Shale has a resou
urce concen
ntration of 25
5.1 million b
barrels of oil/condensate
e per
mi2 plus associated
a gas.
g The ris
sked resourc
ce in-place fo
or oil/conden
nsate in the prospective
e area
is estima
ated at 14 billion
b barrels
s, with 0.6 billion
b barrells as the rissked, techniccally recove
erable
resource
e, Table XVIII-2. The basin also ha
as associate
ed gas estim
mated at 17 Tcf of riske
ed in-
place, with about 1 Tcf
T as risked technically recoverable
e, Table XVIIII-1.
June, 2013 XV
VIII-9
NATRUN
N BASIN
Geologic
G Se
etting. The Natrun
N 4,860 mi2, iss a poorly de
Basin, covering an area of 4 efined
basin loc
cated betwee
en the majo
or oil and ga Western Dessert.13
as fields of tthe Nile Deltta and the W
The basin is bounded on the norrth by the Mediterranean
n Sea and o
on the south by the Katta
aniya
Horst. The
T Natrun Basin
B appea
ars to hold a favorable cconventional petroleum ssystem of so
ource
rock, res
servoir-seal, and timing
g of therma
al maturity. The Jurasssic-age Kh
hatatba Sha
ale is
considere
ed the majo
or hydrocarb
bon source rock
r in this basin.2 The
e entire basin appears to be
prospective for the Middle
M Jurass
sic Khatatba
a Shale, Figu
ure XVIII-4.
Reservoir
R Prroperties (P e Area). Wi thin the 4,860-mi2 prospective area
Prospective a, the
ba Shale in the Natrun Basin rang
ges from 13,000 to 15,0
000 ft, avera
aging
14,000 ftt. The gros
ss interval off the Khatattba Formatio
on ranges frrom near 0 to over 2,000 ft,
averaging about 1,20
00 ft thick. The net sha
ale, using a net to grosss ratio of 0.2
2, is estimatted at
240 ft, with a porosity
y averaging 5.7%. The TOC averag
ges 4% with thermal ma
aturity (Ro) va
alues
of 0.7% to 1.0%, placing
p the shale in the oil windo
ow. (Althoug
gh thermal modeled vittrinite
reflectance values indicated
i ov
ver-mature Jurassic so
ource rocks, borehole data from intra-
basinal sediments
s sh
howed a thermal maturitty in the oil w
window).Erro
or! Bookma
ark not defin
ned.
Resource
R ssessment. Within the 4,860-mi2 p
As prospective a
area of the N
Natrun Basin
n, the
a Shale has a resource concentratio
Khatatba on of 30.1 m
million barre ndensate per mi2.
els of oil/con
ed resource in-place for oil/condens
The riske sate in the prrospective a
area is estim
mated at 36 b
billion
barrels, with
w 1.4 billion barrels as the riske
ed, technica lly recovera
able resourcce, Table XV
VIII-2.
The basiin also has associated gas estimated at 42 Tccf of risked iin-place, witth 3 Tcf of rrisked
ble resource
es, Table XV
VIII-1.
SHOUSH
HAN-MATRU
UH BASIN
Geologic
G Se
etting. The
e Shoushan--Matruh Bassin is a larg
ge Jurassic rift basin in
n the
northwes
stern portion
n of the Western
W Des
sert which also was ffurther exten
nded during
g the
Cretaceo
ous. The ba
asin is bound
ded on the north
n by the Mediterrane
ean Sea and
d on the sou
uth by
the Qatta
ara Ridge. The Jurass
sic-age Kha
atatba Shale
e is the focu
us of our shale oil and
d gas
resource
e assessmen
nt in this bas d a prospecttive area of 4,420 mi2 in
sin. We have identified n this
basin aftter deleting the westerrn portion of
o the basin
n beyond th
he limits of Middle Jurrassic
depositio VIII-6.3,14,1 ,9,2,10
on, Figure XV
June, 2013 XVIII-10

Figure XVIIII-6. Shoushaan-Matruh Bassin, Khatatba Shales Depth and Gross Isopach
Source: ARI, 2013.
Reservoir
R Prroperties (P 20-mi2 prospective area
e Area). Wi thin the 4,42
Prospective a, the
ba Shale in the Shoush
han-Matruh Basin range 000 to 15,000 ft,
es from 10,0
averaging 13,000 ft. The gross
s interval off the Khatatb
ba Formatio
on ranges frrom near ze
ero to
00 ft averagiing 1,000 ft. The Khatattba Shale ha
over 1,50 as an organic content averaging 4%
% and
a therma
al maturity of
o Ro 1.0% to
t 1.3%, pla
acing the sh
hale in the w
wet gas/cond
densate win
ndow.
Core ana
alysis indicattes a porositty of about 5.7%.
5
2
Resource
R As
ssessment. Within the 4,420-mi
4 prrospective a Shoushan-Matruh
area of the S
Basin, th
he Khatatba Shale has a resource concentratio
on of 71 Bccf of wet gass and 7.9 m
million
barrels of nsate per mii2. The riske
o oil/conden ed resource
e in-place fo
or wet gas in
n the prospe
ective
area is estimated
e at 151 Tcf, with 30 Tcf as
s the risked technically recoverable
e resource, T
Table
XVIII-1. The risked resource in--place for oill/condensate
e in the prosspective are
ea is estimatted at
n barrels, with 0.7 billion
17 billion n barrels as the risked, technically recoverable
e resource, T
Table
XVIII-2.
June, 2013 XVIII-11

RECENT
T ACTIVITY
Much
M of the past
p explora
ation drilling in the Westtern Desert h
has targeted
d the Cretacceous
and shallower sedim
ments. Rece
ently, howev
ver, Apache
e has begun
n to successsfully explorre the
deeper Jurassic
J sed
diments, suc
ch as the Sa
afa Sandsto
one in the F
Faghur Basin
n of the We
estern
Desert. In 2010, Apache
A ann
nounced tha
at an uniden
ntified shale
e formation below the East
Bahariya
a Field holds
s “between 700 of oil”. The company sstated
7 million and 2.2 billiion barrels o
that, “We
e have two wells planne
ed to test th e later this yyear.”15 How
he idea here wever, no fu
urther
information is public
cally availablle as to activity or resu
ults involving
g the explorration for oil from
these sha
ales.
REFERE
ENCES
1 Wescott, W.A. et al., 2011. “Jurassic Rift Architecturee in the Northe astern Westernn Desert, Egypt..” AAPG Searcch and
Discoveryy Article #103799, posted Decem mber 19, 2011, adapted from pposter presentatiion at AAPG Intternational Confference
and Exhibbition, Milan, Italy, October 23-26, 2011.
2 J C. et al., 20001. “The Petroleum Potential of
Dolson, J. o Egypt.” in M..W. Downey, J. C. Threet, andd W. A. Morgann, eds.,
Petroleum
m Provinces of thhe Twenty-First Century: AAPG Memoir 74, p. 4453–482.
3 Younes, M.A.,
M 2012. “Hyydrocarbon Potentials in the Norrthern Western D
Desert of Egypt.” Crude Oil Exxploration in the World,
Prof. Mohhamed Younes (Ed.),
( ISBN: 978-953-51-0379-0, InTech
4 Dolson, J.C. et al., 2000. “The Petroleum
m Potential of Eggypt.” Presented to the Second W
Wallace E. Prattt Memorial Confference
on Petroleeum Provinces of
o the 21st Centuury, San Diego, California, Januuary 12-15.
5 Keeley, M.L., 1989. “The Palaeozoic Histoory of the Westeern Desert of Egyypt.” Basin Ressearch, vol. 2, p. 35–48.
6 El Hawat, A.S., 1997. “S
Sedimentary Bassins of Egypt: Ann Overview of D Dynamic Stratigrraphy.” In: Selleey, R.C., Ed.., African
Basins. Sedimentary
S Bassins of the Worldd, 3. Elsevier, Am
msterdam, pp. 339–85.
7 Luning, S. et al., 2000. “LLower Silurian ‘H
Hot Shales’ in Noorth Africa and A
Arabia: Regionaal Distribution annd Depositional M
Model.”
Earth-Science Reviews, vol.
v 49, p. 121–2200.
8 Moretti, I., 2010. “South Alamein
A Petroleuum System (Wesstern Desert, Egyypt).” Petroleum
m Geoscience, vv. 16, p. 121-1322.
9 Abdou, A..A. et al., 2009. “Petrography and Probable Reservoir
R Potenttiality of Subsurfrface Jurassic R
Rocks at Abu Ghharadiq
Basin andd Shoushan Subb-basin, North Western
W Desert, Egypt.” Austraalian Journal of B Basic and Applied Sciences, vool. 3, p.
1206-12222.
10 Ibraham, M.I.A. et al., 19997. “Paleoecoloogy, Palynofaciees, Thermal Matuuration and Hydrocarbon Sourcee-Rock Potentiaal of the
Jurassic-Lower Cretaceoous Sequence inn the Subsurfacee of the North E Eastern Desert, Egypt.” Qatar U
Univ. Sci. J. vol. 17,p.
153-172.
11 Peters, K. and Cassa, M.., 1994. “Appliedd Source Rock Geochemistry.”
G In Magoon, L.B. and Dow, W.G
G., eds., The Pettroleum
System frrom Source to Trap. AAPG Mem moir 60, p. 93-1117.
12 Younes, M., 2002. “Alam
mein Basin Hydrrocarbon Potenttial of the Jurasssic-Cretaceous Source Rocks, North Western D
Desert,
Egypt.” Oil
O Gas-Europeaan Magazine, voll. 28, p. 22-28.
13 Pigott, J.D
D. and Ali Sadeek, 2006. “Geovvalidating Basin Models of Yo-Y
Yo Tectonics – EExample: Wadi El-Natrun Basinn, West
Nile, Egypt.” AAPG Searrch and Discoveery #90061, AAP PG International Conference andd Exhibition, Perrth, West Austraalia 5-8,
Novembeer.
June, 2013 XVIII-12

14 Shalaby, M.R. et al., 20011. “Geochem

mical Characterisstics and Hydroocarbon Generation Modeling oof the Jurassic Source
Rocks in the Shoushan Basin,
B North Wesstern Desert, Egypt.” Marine annd Petroleum Geeology, vol. 28, pp. 1611–1624.
15 Dezembeer, Ryan, 2013. "Apache Pursuing Shale-Oil Drilling in Eggypt." Business Wall Street Joournal, 17 Mayy 2011.
http://online.wsj.com acceessed 2 Februarry.
June, 2013 XVIII-13

XIX. South Africa EIA/ARI World Shale Gas and Shale Oil Resource Assessment
XIX. SOUTH AFRICA
SUMMARY
South Africa has one major sedimentary basin that contains thick, organic-rich shales - -
the Karoo Basin in central and southern South Africa, Figure XIX-1.1,2,3 The Karoo Basin is
large (236,400 mi2), extending across nearly two-thirds of the country, with the southern portion
of the basin potentially favorable for shale gas. However, the basin contains significant areas of
igneous (sill) intrusions that may impact the quality of the shale resources, limit the use of
seismic imaging, and increase the risks of shale exploration.
Figure XIX -1: Outline of Karoo Basin and Prospective Shale Gas Area of South Africa
Source: ARI, 2013.
June, 2013 XIX-1

The Permian-age Ecca Group, with its organic-rich source rocks in the Lower Ecca
Formation, is the primary shale formation addressed by this assessment. Of particular interest
is the organic-rich, thermally mature black shale unit in the Whitehill Formation of the Lower
Ecca. This shale unit is regionally persistent in composition and thickness and can be traced
across most of the southern portion of the Karoo Basin.4
We estimate that the Lower Permian Ecca Group shales in this basin contain 1,559 Tcf
of risked shale gas in-place, with 370 Tcf as the risked, technically recoverable shale gas
resource, Table XIX-1. We have excluded the Upper Ecca shales in this basin from quantitative
assessment because their TOC content is reported to be below the 2% TOC standard used by
this resource assessment study.
Table XIX-1: Shale Gas Reservoir Properties and Resources of the Karoo Basin
Karoo
Basin/Gross Area 2
Basic Data
(236,400 mi )
Shale Formation Prince Albert Whitehill Collingham
Geologic Age L. Permian L. Permian L. Permian
2
Physical Extent

Thickness (ft)
Net 120 100 80
Interval 6,000 - 10,500 5,500 - 10,000 5,200 - 9,700
Depth (ft)
Average 8,500 8,000 7,800
Reservoir Pressure Mod. Overpress. Mod. Overpress. Mod. Overpress.
Properties
Reservoir
Average TOC (wt. %) 2.5% 6.0% 4.0%

Clay Content Low Low Low
Gas Phase Dry Gas Dry Gas Dry Gas
Resource
2
GIP Concentration (Bcf/mi ) 42.7 58.5 36.3
Risked GIP (Tcf) 385.3 845.4 327.9
Risked Recoverable (Tcf) 96.3 211.3 82.0
June, 2013 XIX-2

INTRODUCTION
South Africa is a net natural gas importer, primarily from neighboring Mozambique and
Namibia. As such, South Africa has given priority to exploration for domestic gas and oil.
Shale exploration is initiated via a Technical Cooperation Permit (TCP), which may lead to an
Exploration Permit (EP) and eventually to a production contract. The country has a corporation
tax of 28% and royalty of 7%, terms that are favorable for gas and oil development.
A number of major and independent companies have signed Technical Cooperation

Permits (TCPs) to pursue shale gas in the Karoo Basin, including Royal Dutch Shell, the Falcon
Oil & Gas/Chevron joint venture, the Sasol/Chesapeake/Statoil joint venture, Sunset Energy Ltd.
of Australia and Anglo Coal of South Africa.
1. KAROO BASIN
1.1 Introduction
The Karoo foreland basin is filled with over 5 km of Carboniferous to Early Jurassic
sedimentary strata. The Early Permian-age Ecca Group underlies much of the Karoo Basin,
cropping out along the southern and western basin margins, Figure XIX-1. The Ecca Group
contains a sequence of organic-rich mudstone, siltstone, sandstone and minor conglomerates.5
The larger Ecca Group, encompassing an interval up to 10,000 ft thick in the southern
portion of the basin, is further divided into the Upper Ecca (containing the Fort Brown and
Waterford Formations) and the Lower Ecca (containing the Prince Albert, Whitehill and
Collingham Formations), Figure XIX-2. The three Lower Ecca formations are the subject of this
shale resource assessment.
The regional southwest to northeast cross-section illustrates the structure of the Cape
Fold Belt of the Ecca Group on the south and the thermal maturity for the Ecca Group on the
north, Figure XIX-3.6
June, 2013 XIX-3

Figure XIX-2. Stratigraphic Column of the Karoo Basin of South Africa
Source: Catuneanu, O. et al., 2005.
June, 2013 XIX-4

Figure XIX-3. Schematic Cross-Section of Southern Karoo Basin and Ecca Group Shales
Source: McLachlan, I. and Davis, A., 2006.
Major portions of the Karoo Basin have igneous (sill) intrusions and complex geology,
with the most extensive and thickest sills concentrated within the Upper Ecca and Balfour
formations.7 This unusual condition creates significant exploration risk in pursuing the shale
resources in the Karoo Basin, Figure XIX-4.8 (Note that this map reflects the maximum extent of
intrusions, which are expected to be less within the target shale formations.) Local mapping
indicates that contact metamorphism is restricted to quite close to the intrusions. As such, we
removed 15% of the prospective area to account for the potential impact of igneous intrusions
and significantly risked the remaining resource.
The prospective area for the Lower Ecca Group shales is estimated at 60,180 mi2,
Figure XIX-5. The boundaries of the prospective area are defined by the outcrop of the Upper
Ecca Group on the east, south and west/northwest and the pinch-out of the Lower Ecca Group
shales on the northeast, Figure XIX-1. The dry gas window is south of the approximately 29o
latitude line. Given the thermal maturity information and the depositional limits of the Lower
Ecca shales, the prospective area of the Lower Ecca shales is primarily in the dry gas window.
June, 2013 XIX-5

Figure XIX-4. Igneous Intrusions in the Karoo Basin, South Africa
Source: Svensen, H. et al., 2007.
Figure XIX-5. Lower Ecca Group Structure Map, Karoo Basin, South Africa
Source: ARI, 2013.
June, 2013 XIX-6


Lower Ecca Shales. The Lower Ecca shales include the thick basal Prince Albert
Formation, overlain by the thinner Whitehill and Collingham Formations. Each of these
sedimentary units has been individually assessed and is discussed below.
Prince Albert Shale. The Lower Permian Prince Albert Formation has a thick, thermally
mature area for shale gas in the Karoo Basin. Depth to the Prince Albert Shale ranges from
6,000 to over 10,000 ft, averaging about 8,500 ft in the deeper prospective area in the south.
The Prince Albert Shale has a gross thickness that ranges from 200 to 800 ft, averaging 400 ft,
with a net organic-rich thickness of about 120 ft.
The total organic content (TOC) of the Prince Albert Shale within its organic-rich net pay
interval ranges from 1.5 to 5.5%, averaging 2.5%, Figure XIX-6.8 Local TOC values of up to
12% have been recorded.9 However, in areas near igneous intrusions much of the organic
content may have been lost or converted to graphite.
Figure XIX-6. Total Organic Content of Prince Albert and Whitehill Formations
Source: Svensen, H. et al., 2007.
June, 2013 XIX-7

Because of the presence of igneous intrusions, the thermal maturity of the Prince Albert
Shale is high, estimated at 2% to 4% Ro, placing the shale well into the dry gas window. In
areas near igneous intrusions, the formation is over-mature, with vitrinite reflectance (Ro) values
reaching 8%, indicating that the organic content has been transformed into graphite and CO2,
Figure XIX-7. The Prince Albert Shale was deposited as a deep marine sediment and is
inferred to have mineralogy favorable for shale formation stimulation.
Figure XIX-7. Carbon Loss in Lower Ecca Group Metamorphic Shale
Based on limited well data, primarily from the Cranemere CR 1/68 well completed in the
Upper Ecca interval, the Prince Albert Shale appears to be overpressured and has a high
thermal gradient.
Whitehill Shale. The organic-rich Lower Permian Whitehill Formation contains one of
the main shale gas targets in the Karoo Basin of South Africa. The depth to the Whitehill Shale
ranges from 5,500 to 10,000 ft, averaging 8,000 ft in the prospective area. The Whitehill Shale
has an estimated gross organic thickness of 100 to 300 ft,10 with an average net thickness of
100 ft within the prospective area, as shown by the isopach map on Figure XIX-8.11
June, 2013 XIX-8

Figure XIX-8. Isopach Map of the Whitehill Formation
Source: ARI, 2013.
The total organic content (TOC) for the Whitehill Shale in the prospective area ranges
from 3% to 14%, averaging 6%. Local areas have TOC contents up to 15%.4 In areas near
igneous intrusions, portions of the organic content may have been converted to graphite. The
main minerals in the Whitehill Formation are quartz, pyrite, calcite and chlorite, making the shale
favorable for hydraulic stimulation. The Whitehill Shale is assumed to be overpressured. The
thermal maturity (Ro) of the Whitehill Shale in the prospective area ranges from 2% to 4%,
placing the shale into the dry gas window.
The hydrogen and oxygen indexes of the Whitehill Formation indicate a mixture of Type I
and Type II kerogen.9 The Whitehill Shales was deposited in deep marine, anoxic setting and
contains minor sandy interbeds from distal turbidites and storm deposits.12,13
June, 2013 XIX-9

Collingham Shale. The Lower Permian Collingham Formation (often grouped with the
Whitehill Formation) contains the third shale formation addressed by this resource study. The
Collingham Formation has an upward transition from deep-water submarine to shallow-water
deltaic deposits.9 The depth to the Collingham Shale averages 7,800 ft within the prospective
area. Except for total organic content, the shale has reservoir properties similar to the Whitehill
Shale. It has an estimated gross organic thickness of 200 ft, a net thickness of 80 ft, and TOC
of 2% to 8%, averaging 4%. Thermal maturity is high, estimated at 3% Ro, influenced by
igneous intrusions. The shale is assumed to be overpressured based on data from the Upper
Ecca Group.
Upper Ecca Shales. The Upper Ecca Formation extends over a particularly thick, 1,500
m (~5,000 ft) vertical interval in the central and northern Karoo Basin. The Upper Ecca contains
two shale sequences of interest - - the Waterford and the Fort Brown. The Fort Brown
Formation accounts for the great bulk of the vertical interval of the Upper Ecca. These shales
are interpreted by some investigators to have been deposited in a shallow marine environment,2
although others categorize them as lacustrine.14
The organic content and thermal maturity of the Upper Ecca shales are considerably
less than for the Lower Ecca shales. The total organic content (TOC) is reported to range from
about 1% to 2%. With a thermal maturity ranging from 0.9% to 1.1% Ro, the Upper Ecca shales
area is in the oil to wet gas window.15
In the materials below, we provide a qualitative description for the Upper Ecca shales.
However, because their average TOC is below the 2% criterion set for the study, these shales
have been excluded from our quantitative assessment.
The boundaries of the prospective area for the Upper Ecca shales are defined by the
outcrop of the Upper Ecca on the east, south and west and the shallowing of the Lower Ecca
shales on the northeast. The shale oil window is north of the approximately 29o latitude line. A
significant basalt intrusion area of about 10,000 mi2 in the center of the prospective area has
been excluded. Major portions of the prospective area have igneous intrusions that have locally
destroyed portions of the organics, creating significant exploration risk.
Fort Brown Shale. The Fort Brown Shale, as described in the Cranemere CR 1/68
well, is a dark gray to black shale with occasional siltstone stringers. In this well, the Fort Brown
Shale exists over a gross interval of nearly 5,000 ft (1,500 m) from 7,012-11,997 ft. Sunset
June, 2013 XIX-10

Energy, the current permit holder in the area surrounding the Cranemere CR 1/68 well, reports
that 24-hour DST testing in one interval of the Fort Brown shale, from 8,154-8,312 ft, had a flow
rate of 1.84 MMcfd. The well is reported to have blown out at a depth of about 8,300 ft (2,500
m), requiring 10.5 pound per gallon mud to bring the well under control.
The prospective area for the Upper Ecca Fort Brown Shale is estimated at 31,700 mi2.
The Fort Brown Shale in the prospective area has an average depth of 6,000 ft and ranges from
3,000 to 9,000 ft. The shale has an estimated 600 ft of net organic rich thickness, based on
using a net to gross ratio of 20% and an average gross thickness of 3,000 ft. The shale has a
total organic content (TOC) that ranges from 1 to 2% and an estimated average thermal
maturity of 1.1% Ro (based on limited data).
Waterford Shale. The prospective area for the Upper Ecca Waterford Shale is
2
estimated at 20,800 mi . The Waterford Shale in the prospective area has an average depth of
4,500 ft, ranging from 3,000 to 6,000 ft. The shale has an estimated 100 ft of net organic rich
thickness within an average gross thickness of 500 ft. Total organic content ranges from 1 to
2%, with average thermal maturity, based on very limited data, of 0.9% Ro.
Prince Albert Shale. Within its 60,180-mi2 dry gas prospective area, the Prince Albert
Shale has a resource concentration of about 43 Bcf/mi2. Given limited exploration data, the
risked shale gas in-place is estimated at 385 Tcf. Based on favorable TOC and reservoir
mineralogy, balanced by complex geology and volcanic intrusions in the prospective area, ARI
estimates a risked, technically recoverable shale gas resource of 77 Tcf for the Prince Albert
Shale in the Karoo Basin.
Whitehill Shale. Within its 60,180-mi2 dry gas prospective area, the Whitehill Shale has
a resource concentration of about 59 Bcf/mi2. While somewhat more defined than the Prince
Albert Shale, the exploration risk for the Whitehill Shale is still substantial, leading to a risked
shale gas in-place of 845 Tcf. Based on favorable reservoir mineralogy but complex geology,
ARI estimates a risked, technically recoverable shale gas resource of 211 Tcf for the Whitehill
Shale in the Karoo Basin.
June, 2013 XIX-11

Collingham Shale. With a prospective area of 60,180 mi2 and with a resource
concentration of 36 Bcf/mi2, the risked gas in-place for the Collingham Shale is estimated at 328
Tcf, with a risked, technically recoverable shale gas resource of 82 Tcf.
Considerable uncertainty surrounds the characterization and assessment of the shale oil
resources of South Africa, particularly for the net organic-rich thickness and the vertical and
areal distribution of thermal maturity. Shale exploration is just starting in the Karoo Basin and
few data points exist, particularly for the Upper Ecca group of formations.
1.4 Recent Activity
Falcon Oil & Gas Ltd., an early entrant into the shale gas play of South Africa, obtained
an 11,600-mi2 TCP along the southern edge of the Karoo Basin. Shell obtained a larger
71,400-mi2 TCP surrounding the Falcon area. Sunset Energy holds a 1,780-mi2 TCP to the
west of Falcon. The Sasol/Chesapeake/Statoil JV TCP area of 34,000 mi2 and the Anglo Coal
TCP application area of 19,300 mi2 are to the north and east of Shell’s TPC, Figure XIX-9. 16
Figure XIX-9. Map Showing Operator Permits in the Karoo Basin, South Africa
Source: ARI, 2013.
June, 2013 XIX-12

Recently, Chevron announced that it would partner with Falcon Oil & Gas to pursue the
shale resources of the Karoo Basin, starting with seismic studies.17
Five older (pre-1970) wells have penetrated the Ecca Shale interval. Each of the wells
had gas shows, while one of the wells - - the Cranemere CR 1/68 well - - flowed 1.84 MMcfd
from a test zone at 8,154 to 8,312 ft. The gas production, considered to be from fractured
shale, depleted relatively rapidly during the 24-hour test. The CR 1/68 well was drilled to 15,282
ft into the underlying Table Mountain quartzite and had gas shows from six intervals, starting at
6,700 ft and ending at 14,650 ft, indicating that the shales in this area are gas saturated.
REFERENCES
1
McLachlan, I. and Davis, A., “Petroleum Exploration In The Karoo Basins, South Africa.” Petroleum
Agency SA, 2006.
2
Catuneanu, O. et al., 2005. “The Karoo Basins of South-Central Africa.” Journal of African Earth
Sciences, vol. 43, p. 211-253.
3
U.S. Geological Survey Digital Data Series 60, World Petroleum Assessment 2000,
http://pubs.usgs.gov/dds/dds-060/.
4
Branch, T. et al., 2007. “The Whitehill Formation – A High Conductivity Marker Horizon in the Karoo
Basin.” South African Journal of Geology, vol. 110, p. 465-476.
5
Johnson, M.R. et al., 1997. “The Foreland Karoo Basin, South Africa.” In: Selley, R.C., (ed.), African
Basins – Sedimentary Basins of the World, Elsevier, Amsterdam.
6
McLachlan, I. and Davis, A., 2006.
7
Chevallier, L. and Woodford, A.C., 1999. “Morpho-Tectonics and Mechanisms of Emplacement of the
Dolerite Rings and Sills of the Western Karoo, South Africa.” South African Journal of Geology, vol.
102, p. 43-54.
8
Svensen, H. et al., 2007. “Hydrothermal Venting of Greenhouse Gases Triggering Early Jurassic Global
Warming.” Earth and Planetary Science Letters, vol. 256, p. 554-566.
9
Faure, K. and Cole, D.,1999. “Geochemical Evidence for Lacustrine Microbial Blooms in the Vast
Permian Main Karoo, Parana, Falkland Islands and Haub Basins of Southwestern Gondwana.”
Palaeogeography and Palaeoclimatology, vol. 152, p. 189-213.
10
Visser, J.N.J., 1992. “Deposition of the Early to Late Permian Whitehill Formation During Sea-Level
Highstand in a Juvenile Foreland Basin.” South African Journal of Geology, vol. 95, p. 181-193.
11
Visser, J.N.J, 1994. “A Permian Argillaceous Syn- to Post-Glacial Foreland Sequence in the Karoo
Basin, South Africa.” In: Deynoux, M., Miller, J.M.G., Domack, E.W., Eyles, N., Fairchild, I.J., and
Young G.M. (eds.), Earth’s Glacial Record: International Geological Correlation Project 260. Cambridge
University Press, Cambridge, p. 193-203.
12
Smith, R.M.H., 1990. “A Review of the Stratigraphy and Sedimentary Environments of the Karoo Basin
of South Africa.” Journal of African Earth Science, vol.10, p. 117-137.
13
Cole, D.I. and McLachlan, I.R., 1994. “Oil Shale Potential and Depositional Environment of the
Whitehill Formation in the Main Karoo Basin.” Council for Geoscience (South Africa) Report, vol. 1994-
0213.
June, 2013 XIX-13

14
Horsfeld, B. et al., 2009. “Shale Gas: An Unconventional Resource in South Africa? Some Preliminary
Observations.” 11th SAGA Biennial Technical Meeting and Exhibition, Swaziland, 16-18 September, p.
546.
15
Raseroka, A.L., 2009. “Natural Gas and Conventional Oil Potential in South Africa’s Karoo Basin.”
AAPG International Conference and Exhibition, 15-18 November, Rio de Janeiro, Brazil.
16
Petroleum Exploration and Production Activities in South Africa, Petroleum Agency South Africa,
September 2010, http://www.petroleumagencysa.com/files/Hubmap_09-10.pdf.
17
Maylie, D., 2012. “Chevron Joins Shale Hunt in South Africa”. Wall Street Journal, December 14,
www.wsj.com accessed March 29, 2013.
June, 2013 XIX-14

XX. China EIA/ARI W
XX. CHINA
C
SUMMA
ARY
China
C has abundant shale gas and
d shale oil potential in
n seven pro
ospective ba
asins:
Sichuan, Tarim, Jung
ggar, Songliao, the Yang
gtze Platform
m, Jianghan and Subei, Figure XX-1
1.
Figure XX-1. China’s Sevven Most Prosspective Shalee Gas and Shaale Oil Basins are the
Jiangh
han, Junggar, Sichuan, Sonngliao, Subei, TTarim, and Yaangtze Platform.
Source: ARI, 2013.
June, 2013 XX
X-1
XX. China EIA/ARI W
China
C has an
n estimated 1,115 Tcf off risked, tech
hnically reco
overable sha
ale gas, mainly in
marine- and
a lacustrin
ne-deposited
d source roc n (626 Tcf), Tarim (216 Tcf),
ck shales off the Sichuan
Junggar (36 Tcf), and Songliao (16
( Tcf) bas
sins. Additio
onal risked, ttechnically re
ecoverable sshale
gas resources totalin
ng 222 Tcf exist
e in the smaller, struccturally more
e complex Y
Yangtze Plattform,
Jianghan
n and Subei basins. The risked sha
ale gas in-pllace for Chin
na is estima
ated at 4,746
6 Tcf,
tables XX
X-1A through
h XX-1E.
China’s
C also has consid
derable shale oil poten
ntial which iis geologica
ally less deffined.
Risked, technically
t recoverable shale oil res
sources in th
he Junggar, Tarim, and Songliao basins
are estim
mated at 32.2 billion barrrels, out of 643 billion b
barrels of rissked, prospe
ective shale oil in
place), Table
T XX-2A through XX
X-2C. Howev
ver, China’s shale oil ressources tend
d to be waxyy and
are store
ed mostly in lacustrine-d
deposited sh
hales, which may be cla
ay-rich and less favorab
ble for
hydraulic
c stimulation.
The
T shale ga e assessme nt for China represents a major upg
as and shale oil resource grade
from our prior year 2011
2 EIA/AR
RI shale gas
s assessmen
nt. Importan
ntly, this upd
date assesssment
ates a signifficant new information
incorpora i from ARI’s proprietary data base of geologic data
extracted ut 600 published techniical articles (mostly Ch
d from abou hinese langu
uage) as we
ell as
recent drrilling data.
Shale
S gas lea
asing and ex
xploration drrilling alread
dy are underrway in Chin
na, focused iin the
Sichuan Basin and Yangtze
Y Plattform areas and led by PetroChina, Sinopec, a
and Shell and the
government has set an ambitiou
us but proba
ably unachie
evable target for shale g
gas production of
5.8 to 9.7
7 Bcfd by 20
020.
June, 2013 XX
X-2
XX. China EIA/ARI W
Table XX-1A. Ch
hina Shale Gaas Resources and Geologicc Properties.
Sichuan
n Yan
ngtze Platform
Basin/G
Gross Area 2 2
Basic Data
(74,500 mi
m ) (
(611,000 mi )
Shale Formation
F Qiongzhu usi Longmaaxi Permiaan L. Camb brian L. Silu
urian
Geolo ogic Age L. Cambriaan L. Siluriaan Permiaan L. Cambbrian L. Siluurian
Depositionaal Environment Marine Marinee Marinee Marinne Marine
2
Prospective Arrea (mi ) 6,500 10,0700 20,9000 3,2550 5,0335
Physical Extent
Organically Rich 500 1,000 314 5000 1,0000

T
Thickness (ft)
Net 275 400 251 2755 4000
Interval 10,000 - 16,,400 9,000 - 15,,500 3,280 - 166,400 10,000 - 16,400
1 9,000 - 15,500
1
Depth (ft)
Average 13,200 11,5000 9,7000 13,2000 11,5500
Mod. Mod. Mod.
Reservoir Pressure Normmal Norm mal
Properties
Reservoir
Overpress. Overpresss. Overpre ss.

A
Average TOC (w wt. %) 3.0% 3.2% 4.0% 3.0%% 3.2%%
T
Thermal Maturiity (% Ro) 3.20% 2.90% 2.50%% 3.20% % 2.900%
Clay Content Low Low Low Loww Loww
Gas Phase Dry Gass Dry Gass Dry Gaas Dry Gas
G Dry Gas
G
Resource
2
GIP Concentrattion (Bcf/mi ) 109.8 162.6 114.1 99.44 147.1
Risked GIP (Tccf) 499.6 1,146.11 715.22 181.0 414.7
Table XX-1B. Ch
Jianghan
Basin/Grosss Area 2
Basic Data
(14,440 mi )
Shale Formmation Niu
utitang/Shuijintuo
o Longm maxi Qixiaa/Maokou
Geologic Age L. Cambrian L. Siluurian P
Permian
Depositional En
nvironment Marine Marrine M
Marine
2
Prrospective Area (mmi ) 1,280 670 1,230 650 1,100 2,080
Physical Extent
Orgganically Rich 533 394 394 700 7

700 7000
Th
hickness (ft)
Net 267 197 197 175 1
175 1775
Inteerval 9,840 - 16,400 8,200 - 12,000 110,000 - 14,760 3,300 - 7,000 7,000 - 10,000 10,000 - 13,120
Deepth (ft)
Aveerage 13,120 10,000 12,380 5,500 8,500 11,5500
Reeservoir Pressuree Normal Normal Normal Normal Noormal mal
Norm
Properties
Reservoir

% 6.6% 2.0% 2.0% 2.0% 2
2.0% 2.00%
Th
hermal Maturity (%
% Ro) 2.25% 1.15% 2.00% 0.85% 1.15% 1.800%
Cllay Content Low Low Low Low L
Low Lo w
Gaas Phase Dry Gas Wet Gas Dry Gas A
Assoc. Gas Weet Gas Dry Gas
G
Resource
2
GIIP Concentration (Bcf/mi ) 148.9 51.0 67.1 14.1 448.3 66..6
Riisked GIP (Tcf) 45.7 8.2 19.8 1.8 1
10.6 27..7
Riisked Recoverablee (Tcf) 11.4 1.6 4.9 0.2 2.7 6.9
June, 2013 XX
X-3
XX. China EIA/ARI W
Table XX-1C. Ch
ubei
Greater Su
Basic Data Basin
n/Gross Area 2
(55,000 mi
m )
Shalee Formation Mufushan Wuffeng/Gaobiajian n U. Permian
Geo ologic Age L. Camb rian U. Orddovician-L. Silurrian U. Permian
Deposition
nal Environmen
nt Marinee Marine Marine
2
Prospective Area
A (mi ) 2,0400 5,370 9,6220 1,3550 290
Physical Extent
Organically Rich
R 400 8200 8200 5000 500
Thickness (ft))
Net 300 2466 2466 1500 150
Interval 13,000 - 166,400 11,500 - 13,500
1 13,500 - 16,400 3,300 - 8,200
8 8,000 - 1,000
Depth (ft)
Average 14,7000 12,5000 14,5500 5,8000 9,000
Reservoir Preessure Normaal Normal Norm
mal Norm
mal Normaal
Properties
Reservoir
Average TOCC (wt. %) 2.1% %

1.1% 1.1%% 2.0%
% 2.0%
Thermal Matuurity (% Ro) %
1.20% 1.15%
% 1.455% 1.15% %
1.35%
Clay Content Low Loww Low w Low
w Low
Gas Phase Dry Gaas Wet Gas
G Dry Gas
G Wet Gas
G Dry Gaas
Resource
2
GIP Concentrration (Bcf/mi ) 118.66 66.00 87.8 35.88 55.4
Risked GIP (T
Tcf) 29.0 42.55 101.4 5.88 1.9
Risked Recovverable (Tcf) 7.3 10.66 25.4 1.55 0.5
Table XX-1D. Ch
Tarim
m
Basin/G
Gross Area 2
Basic Data
(234,200 mi )
Shale Formation
F L. Cambrrian L. Ordovvician M..-U. Ordovician
n Ketu uer
Geolo ogic Age L. Cambrrian L. Ordovvician M.-U. Ordovician L. Triaassic
Depositionaal Environmentt Marinee Marinne Marine Lacus trine
2
Prospective Arrea (mi ) 6,520 19,4220 10,4550 10,930 15,920
Physical Extent
Organically Rich
R 380 300 3000 3900 4000
Thickness (ft)
Net 240 170 1600 2400 2000
Interval 11,000 - 166,400 10,000 - 16,400
1 8,610 - 12,670
1 9,840 - 16,400
1 9,500 - 16,400
1
Depth (ft)
Average 14,6200 13,6990 10,7990 12,180 13,000
Reservoir Presssure Normall Normal Norm
mal Norm
mal Norm
mal
Properties
Reservoir
Average TOC (wwt. %) 2.0% 2.4%

% 2.1%% 2.5%% 3.0%%
Thermal Maturrity (% Ro) 2.0% 1.80%
% 0.900% 2.000% 0.900%
Clay Content Low Loww Low w Low w Low w
Gas Phase Dry Gass Dry Gas Assoc. Gas Dry Gas
G Assoc.. Gas
Resource
2
Risked GIP (Tccf) 175.9 377.55 32.88 232.3 161.2
June, 2013 XX
X-4
XX. China EIA/ARI W
Taable XX-1E. Ch
J
Junggar Songliao
Basin/Gross Area
A 2
Basic Data
2
(622,100 mi ) (1008,000 mi )
Shale Formattion Pingdiquan/Luccaogou Triiassic Qingshankou
Geologic Ag ge Permian Triiassic C
Cretaceous
positional Environment
Dep Lacustrinee Laccustrine L
Lacustrine
2
Prospeective Area (mi ) 7,400 88,600 6,900
Physical Extent
Organ nically Rich 820 8

820 1,000
Thickness (ft)
Net 410 4
410 500
Intervval 6,600 - 16,4400 5,0000 - 16,400 3,300 - 8,200
Depth (ft)
(
Averaage 11,500 100,000 5,500
Highly
Reservvoir Pressure Highly Overprress. Modd. Overpress.
Properties
Reservoir
Oveerpress.
Averag
ge TOC (wt. %) 5.0% 4
4.0% 4.0%
Thermaal Maturity (% Ro) 0.85% 0..85% 0.90%
Clay Co
ontent Medium Meedium Medium
Gas Phhase Assoc. Gaas Assooc. Gas A
Assoc. Gas
Resource
2
GIP Co
oncentration (B
Bcf/mi ) 64.7 6
60.5 45.0
Risked GIP (Tcf) 172.4 187.5 155.4
Risked Recoverable (Tcf)
( 17.2 1
18.7 15.5
Taable XX-2A. China

C Shale Oiil Resources aand Geologic Properties.
Jianghan Greatter Subei
Basin/Gross Area
Basic Data
2 2
(14,440 mi ) (55,0000 mi )
Shale Forrmation Longmaxi Qixia/Maaokou W
Wufeng/Gaobiajia an U. Perm
mian
Geologicc Age L. Silurian Permian U. Ordovician-L. Siluurian U. Perm
mian
E Marine Marinne Marine Marinee
2
P
Prospective Area (mi ) 670 650 1,100 5,370 1,3500
Physical Extent
Orrganically Rich 394 700 700 820 500

T
Thickness (ft)
Neet 197 175 175 246 150
Intterval 8,200 - 12,000 3,300 - 7,000 7,000 - 10,000 11,500 - 13,500 3,300 - 8,200
8
D
Depth (ft)
Avverage 10,000 5,500 8,500 12,500 5,8000
R
Reservoir Pressurre Normal Normal Normal Normal Normaal
Properties
Reservoir
Average TOC (wt. %)

A 2.0% 2.0% 2.0% 1.1% 2.0%
%
T
%
C Content
Clay Low Low Low Low Low
O Phase
Oil Condensate Oil Condensate
C Condensate Condenssate
Resource
2
O Concentration
OIP n (MMbbl/mi ) 5.0 28.5 5.7 7.0 6.2
R
Risked OIP (B bbll) 0.8 3.7 1.3 4.5 1.0
R
Risked Recoverab
ble (B bbl) 0.04 0.18 0.06 0.23 0.055
June, 2013 XX
X-5
XX. China EIA/ARI W
Taable XX-2B. China

C Shale Oiil Resources aand Geologic Properties.
m
Tarim Ju
unggar Songliiao
Basin/Grosss Area
Basic Data
2 2 2
(234,200 mi ) (62,100 mi ) (108,000 mi )
Shale Formmation M.--U. Ordovician Ketuer Pingdiquan/Lucao
P ogou Triassic Qingshaankou
Geologic Age M.--U. Ordovician L. Triassic Permian Triassicc Cretaceeous
Depositional Environment Marine Lacustrine Lacustrine Lacustrinne Lacustrrine
2
Prrospective Area (mmi ) 10,450 15,920 7,400 8,600 6,9000
Physical Extent
Organically Rich 300 400 820 820 1,0000

Th
hickness (ft)
Net 160 200 410 410 5000
Inteerval 8
8,610 - 12,670 9,500 - 16,400 6,600 - 16,4000 5,000 - 16,400 3,300 - 8,200
8
Deepth (ft)
Aveerage 10,790 13,000 11,500 10,0000 5,5000
Reeservoir Pressuree Normal Normal Highly Overpresss. Highly Overppress. Mod. Overrpress.
Properties
Reservoir

% 2.1% 3.0% 5.0% 4.0% 4.0%
%
Th
hermal Maturity (%
% Ro) 0.90% 0.90% 0.85% 0.85%% 0.90%%
Cllay Content Low Low Medium Medium m Mediuum
Oiil Phase Oil Oil Oil Oil Oil
Resource
2
OIIP Concentration (MMbbl/mi ) 11.9 32.5 40.9 43.3 66.44
Riisked OIP (B bbl) 31.1 129.5 108.9 134.1 229.22
Riisked Recoverablee (B bbl) 1.55 6.47 5.44 6.70 11.466
In
nitial drilling
g confirms China’s sh
hale gas a
and oil ressource pote
ential, but rapid
commerc
cialization may
m be challe
enging due to the typica
ally complexx geologic sttructure (fau
ulting,
high tecto
onic stress),, restricted access
a to ge gh cost and rrudimentary state
eologic data, and the hig
of in-country horizontal drilling an
nd fracturing
g services.
1. South
S China
a “Shale Corridor”:
C Sichuan,
S Jiianghan, S ns and Yan
Subei Basin ngtze
Platform.
P These
T areas
s have clas
ssic marine--deposited, quartz-rich, black shale
es of
Cambrian
C and
d Silurian ag
ge that are ro
oughly comp
parable to N
North Americcan analogs. The
Sichuan
S Basiin -- China’s
s premier sha
ale gas area
a -- has exissting gas pip
pelines, abun
ndant
su
urface wate
er supplies, and close proximity to
o major cities. Current exploratio
on is
fo
ocusing on the southwes
st quadrant of the basin
n, which is re
elatively lesss faulted and low
in
n H2S. The adjacent Yangtze Platform
P and
d the Jiang
ghan and S
Subei basinss are
sttructurally co
omplex with poor data control,
c but a
also located close to ma
ajor cities ce
enters
and still considered prosp
pective.
Shale
S targets
s in the southwestern portion
p of the
e Sichuan B
Basin are brrittle and dryy-gas
mature,
m but lo
ower in TOC
C (~2%) tha
an North Am
merican shale
es and furthermore still quite
fa
aulted. Petro
oChina’s firs
st horizontal shale well rrequired 11 m
months to drrill (vs 2 wee
eks in
North
N Americ
ca). The in
nduced fracttures grew p
planar due to high stre
ess and thiss well
June, 2013 XX
X-6
XX. China EIA/ARI W
produced a disappointing
d d. Shell tested 2.1 million ft3/day frrom a
g initial rate of 560 Mcfd
ertical well, but noted ho
ve ole instability
y and out-of-
f-zone deviation while drrilling horizontally
nearby. Sino
opec, BP, Chevron,
C Co
onocoPhillipss, Statoil, TO
OTAL and o
others also have
ex
xpressed in
nterest in th
he region. nt geologic and operattional
Assuming iits significan
is
ssues can be
b solved, the
t Sichuan
n may beco
ome China’ss premier sshale gas b
basin,
ca
apable of prroviding seve
eral Bcfd of supply
s within
n 20 years.
2. The
T Tarim Basin
B has relatively
r de
eep shale g al in marine-deposited black
gas potentia
e rich in carrbonate and often grapttolitic.
shales of Cambrian and Ordovician age that are
No
N shale lea
asing or drrilling have been reporrted, probab
bly because
e of this ba
asin’s
re
emoteness and
a extreme
e depth of the
e shale. Strructure is rellatively simp
ple but the shales
are mostly too
o deep, reac
ching prospe
ective depth only on uplifts where TOC unfortun
nately
ends to be lo
te ow (1-2%). Nitrogen co
ontamination
n (~20%) an
nd karstic co
ollapse strucctures
also are iss
sues. Shallower, lowe
er-rank Ord
dovician sha
ale and Trriassic lacusstrine
mudstone
m ha
ave potential. Horizonta
al wells alre
eady accoun
nt for half off convention
nal oil
production in the Tarim Basin,
B provid
ding a good foundation ffor applicatio
on in future sshale
development.
sin, while no
3. Junggar Bas ot the larges
st shale reso
ource in China, may ha
ave its best sshale
geology. Perrmian source
e rocks are extremely
e th
hick (average 1,000 ft), rrich (4% ave
erage
TOC;
T 20% maximum)
m and over-pressured. Triiassic sourcce rocks are
e leaner butt also
appear prosp
pective. Th
he structura
al geology o
of the basin
n is favorab
bly simple, while
hermal matu
th urity ranges
s from oil to
t wet gas within the prospective area. L
Large,
co
ontinuous shale oil and
d wet gas le
eads were id
dentified. T
The main risk in the Jun
nggar
Basin
B is the lacustrine rather than
n marine de
epositional o
origin of the
e shale and
d the
co
oncomitant issues
i of brittleness and
d “frack-abilitty”. Shell an
nd Hess are evaluating sshale
oil prospects in the simila
ar, smaller Santanghu Ba
asin just easst of the Jun
nggar Basin.
4. Songliao
S Ba e Songliao has thick L
asin, China’’s largest oil-producing region, the Lower
Cretaceous
C source
s rock shales in th
he oil to wet gas window
ws. While th
hese organicc-rich
shales are la
acustrine in origin and unfavorablyy rich in clay mineralss, they have
e the
advantages of
o being overr-pressured and naturallly fractured. Prospectivve shales occcur in
solated half-grabens at depths of 300
is 3 to 2,500
0 m but faulting is inten
nse. PetroC
China
co
onsiders the
e Songliao Basin
B to be prospective
e for shale exploration and has alrready
June, 2013 XX
X-7
XX. China EIA/ARI W
noted comm
mercial shale
e oil produ
uction here. Hess an
nd PetroCh
hina have jointly
onducted a study of shale/tight oil potential at giant Daqin
co ng oil field. Jilin Oilfield
d has
drilled and hydraulically
h y fractured deep
d horizo
ontal wells into a tightt sandstone
e gas
re
eservoir. Th
heir 1,200-m
m lateral, 11--stage frac ttechnology ccould be ap
pplied to sha
ale oil
re
eservoirs in the
t Songliao
o Basin.
5. Other
O ns. Severall other sedimentary ba
Basin asins in Chin
na have shale potentia
al but
co
ould not be
e quantified due to low geologic q
quality or inssufficient da
ata control. The
Turpan-Hami
T Basin, eas
st of the larrger Jungga
ar, has equiivalent Perm
mian organicc-rich
shales that are
a lacustrine
e in origin, oil-
o to wet ga
as-prone, an
nd appear p
prospective. The
Qaidam
Q Basiin, southeas
st of the Ta
arim, compri ses isolated
d fault-bounded depressions
co
ontaining Up
pper Triassic
c mudstone source rockks with high TOC; these appear oil p
prone
but are very deep. The Ordos Basiin has simp le structure but its Triassic shales have
lo
ow TOC and
d high clay content
c %), while Carrboniferous and Permian mudstone
(80% es are
co
oaly and duc
ctile. No sha
ale drilling has been rep
ported in thesse less prosspective area
as.
INTROD
DUCTION
China
C bundant shale gas and shale
has ab s oil ressource poten
ntial that is a
at the early sstage
of delineation, evalua
ation, and te
esting. Chin
na’s governm
ment is priorritizing shale
e developme
ent on
legal, tec
chnological, and comme
ercial fronts.. In Decem
mber 2011 th
he State Council approvved a
petition from the Ministry of Land
d and Resou
urces’ (MLR ) to separate
e the ownership of shale
e gas
from conventional re
esources, although the ownership
o off shale oil re
esources rem
mains unclea
ar. In
March 2012 the Tw
welfth Five-Y
Year Plan fo
or Shale Ga
as Developm
ment envisio
oned large-scale
cial development of China’s shale resources, while fiscal incentives and subsidies to
commerc
support shale
s investm
ment are under consideration.
However,
H the
e prevailing industry vie
ew, which iis shared by ARI, is th
hat geologicc and
industry conditions are
a considerrably less fav
vorable in C
China than in
n North Ame
erica. Nume
erous
es seem cerrtain to complicate and slow comme
challenge ercial develo
opment com
mpared with N
North
America.. In particu
ular, most Chinese
C sha
ale basins a
are tectonica
ally complexx with nume
erous
faults -- some
s seismically active -- which is not
n conducivve to shale d
developmen
nt. Similar isssues
owed China’s production
have slo n of coalbed
d methane, a distantly related uncconventiona
al gas
resource
e. CBM outp der 0.5 Bcfd following 20
put is still und 0 years of co
ommercial d
developmentt.
June, 2013 XX
X-8
XX. China EIA/ARI W
Furthermore, China’s serrvice sector is just begin

nning to acquire the neccessary capa
ability
for large--scale horizo
ontal drilling combined with
w massive
e multi-stage
e hydraulic sstimulation. Only
a small number
n of horizontal
h sh
hale gas and
d oil wells ha
ave been te
ested thus fa
ar, with gene
erally
low but at
a least mea
aningful prod
duction rates
s. Significan
nt commercial productio
on appears ssome
years in the future. Considerab
ble work is needed
n to de eologic swee
efine the ge et spots, devvelop
vice sector’s
the serv s capacity to effective
ely and eco
onomically drill and sttimulate mo
odern
horizonta
al shale we
ells, and ins
stall the exttensive surfface infrastrructure need
ded to tran
nsport
product to
t market.
In
ndustry is ca
autious regarding China’’s likely pace ment. Even in its
e of shale gas developm
best are
ea, PetroCh
hina engineers observe
ed: “the Siichuan Bassin’s conside
erable strucctural
complexiity, with exttensive fold
ding and faulting, appe
ears to be a significan
nt risk for sshale
ment.”1 And
developm d a BP offic
cial recently
y noted: “It w
will be a long time beffore China ccould
commerc
cialize its shale resource e way.”2 The
es in a large e National E
Energy Administration’s m
mean
shale gas
s output targ
get of 7.7 Bc
cfd by 2020 appears
a am bitious in thiis context.
Another
A issu
ue is data availability.
a Much of tthe basic g
geologic and
d well data
a that
commonly is publicly available in other co
ountries – an
nd essentia
al for resourrce and prosspect
on -- is cons
evaluatio sidered by China
C to be state secretts. To overrcome these
e data limitattions,
ARI has drawn on its extensiv
ve proprietarry China sh
hale geologyy data base
e, compiled from
mately 400 te
approxim echnical pap
pers published in Chine
ese language
e. Data loccations plotte
ed on
our China
a maps prov
vide an indic
cation of geo
ologic contro
ol (or lack the
ereof).
Four main on
nshore regio ed by this sstudy have shale gas a
ons assesse and oil pote
ential,
X-1. These include:
Figure XX
▪ South
S China Shale Corrid
dor (Sichuan
n, Jianghan, Subei basin
ns and Yang
gtze Platform
m).
▪ The
T Tarim, Ju
unggar, and Songliao ba
asins in northern China.
Additional
A ba
asins exist but
b may lack
k data contrrol or do nott appear to have large sshale
gas/oil po
otential (e.g.., Ordos, Qa
aidam, Turpa
an-Hami).
June, 2013 XX
X-9
XX. China EIA/ARI W
1. SOUTH
S CHIINA SHALE
E CORRIDOR : SICHUAN, JIAN
NGHAN, SU
UBEI BASINS,
YANGTZE
Y PLATFORM
P M
1.1 In
ntroduction and Geologic Setting
Organic-rich
O marine shalles, mostly gas-prone
g to
o thermally over-mature
e, underlie a vast
area of south-centra
s al and easte
ern China. This
T “Shale Corridor” co
omprises the Sichuan B
Basin
and adjo
oining Yangtze Platform
m in Sichua
an, Yunnan,, Guizhou, Hubei, and western H
Hunan
provinces
s, as well as
s the smaller Jianghan and
a Subei ba
asins in sou
utheastern C
China. Within
n this
broad re
egion, Paleo
ozoic shales
s in the Sic
chuan Basin
n and Yang
gtze Platform
m offer som
me of
China’s most
m prospe
ective shale gas potentia
al. Howeve
er, while the essential ro
ock quality in
n this
region ap
ppears favorrable and no
ot dissimilar with certain North Amerrican shaless (e.g., Marcellus,
Barnett), significant exploration
e challenges
c still
s exist. Th
hese include
e locally exce
essive depth
h and
high therrmal maturity
y and -- mos
st concerning
g – intense ffaulting and structural co
omplexity.
The n the South China Shale

T overall sedimentary sequence in e Corridor iss 6 to 12 km thick
and inclu
udes multiple ch shales of marine and non-marine
e organic-ric e origin within Pre-Camb
brian,
an, Silurian, Devonian, Permian, Trriassic, and Eocene forrmations. F
Cambrian, Ordovicia Figure
ustrates the stratigraph
XX-2 illu hy of the Sichuan
S Bassin and Yangtze Platfo
orm, highlig
ghting
potentially prospectiv
ve L. Cambrrian, L. Silurian, and U. P
Permian sou
urce rocks.
Paleozoic
P sh
hales in the South Chin
na Shale C
Corridor -- th ospective of this
he most pro
sequence
e and the clo
osest in cha
aracter to pro
oductive Norrth American
n shales -- tyypically are thick,
carbon- and
a mature within the
quartz-rrich, of marine depositional origin, and mostly thermally m
dry-gas to
t over-matu
ure windows
s. In contra
ast, the Triasssic and Eo
ocene shaless were depo
osited
primarily within fresh
hwater lacusttrine (rather than marine
e) environme
ents and ten
nd to be clayy-rich,
probably more ducttile, and thu
us less pro
ospective. Our work --- consistent with published
information by Petro
oChina, She
ell, and oth
hers -- indiccates that th
he Lower C
Cambrian, L
Lower
Silurian, and Upperr Permian marine
m shales in the S
Sichuan Ba
asin, Yangtzze Platform,, and
adjoining
g regions offe
er some of China’s
C best promise forr shale gas d
development.
June, 2013 XX
X-10
XX. China EIA/ARI W
Figure XX
X-2. Stratigrapphy of the Sichhuan Basin annd Yangtze Plaatform, Highlighting
Potentiaally Prospectivve L. Cambrian
n, L. Silurian, and U. Permiaan Source Roocks.
SICH
HUAN BASIN
N
ERA PERIOD EPOCH FORMATIO
ON AGE (Ma
a) THICKNESS
S (m)
Q
QUATERNARY 0-3 0 - 380
Upper 3 - 25 0 - 300
TERTIARY
Low er 25 - 80 0 - 800
C
CRETACEOUS 80 - 140 0 - 2000
Upper Penglaizhe
en 0
650 - 1400
Suining 340 - 500
0
MESOZOIC
JURASSIC Middle 140 - 195

5
Shaximiao
o 600 - 2800
0
Middle-Low er
e g
Ziliujing 200 - 900
0
Upper Xujiahe e 195 - 205
5 250 - 300
00
Middle Leikoupo o
TRIASSIC
Jialingjian
ng 205 - 230
0 900 - 170
00
Lower
Feixiangu uan
Changxiing
Upper 200 - 500
0
PERMIAN Longta
an 230 - 2700
Maokou u
Lower 200 - 500
0
Qixia-Liangsshan
PALEOZOIC
CARBONIFEROUS
S Mississippia
an Huanglon ng 270 - 320
0 0 - 500
Upper
SILURIAN 0 - 1500
0
Lower Longma axi
O
ORDOVICIAN 0 - 600
320 - 570
0
Upper Xixiangchhi
CAMBRIAN Middle Yuxianssi 0
0 - 2500
Lower Qiongzhusi
Dengying
g
Upper 200 - 110
00
SINIAN Doushantuo 570 - 850
0
Lower 0 - 400
PRE-SINIAN 850
So
ource Rock
k Conventio
onal Reservoir
Source: ARI, 2013.
The
T n Basin cov
Sichuan e 74,500-mi2 area in so
vers a large outh-central China, while
e the
structurally more complex
c an
nd sparsely drilled Ya
angtze Plattform coverrs a largerr but
discontin
nuous area to
o the south and
a east. The
T Sichuan Basin curre
ently produce
es about 1.5
5 Bcfd
of natura
al gas from convention
nal and low--permeability
ty sandstone
es and carb
bonates. T
These
reservoirrs occur maiinly in the Triassic
T Xujia
ahe and Feiixianguan fo
ormations, stored in com
mplex
structural-stratigraph
hic traps (ma
ainly faulted anticlines) tthat are disttributed acro
oss the basiin. A
limited vo
olume of oil also is prod
duced from overlying
o Ju rassic sandsstones. The
e convention
nal oil
June, 2013 XX
X-11
XX. China EIA/ARI W
and gas fields are un

nderlain and
d were sourc
ced by deep er organic-rich Paleozoic marine sh
hales,
n target of current
the main c shale
e gas exploration. Pro terozoic to L. Paleozoic gas fieldss also
have bee
en discovere
ed more rece
ently. Extre
emely high H 2S concentrations (up tto 50%) and
d CO2
(up to 18
8%) occur in sour gas fie
elds such as
s Puguang in east part of the basin. Levels
n the northe
of these contaminantts are much lower in the ocally significcant.3
e south but ccan still be lo
A number of technical jou

urnal articles
s have been
n published o
on the Sichu
uan Basin in
n both
Chinese and English
h, with the volume
v and quality of p ublic reportss increasing
g in recent yyears.
ARI extra
acted a sub
bstantial datta base on Sichuan Ba
asin source rock shale geology from 47
Chinese and 20 English
E lang
guage techn
nical article
es, comprising 23 crosss-sections, 714
well/outc
crop location
ns, and 1,46
62 total sam
mples, Figurre XX-3. T
This data se
et provides good
control of shale thick
kness, depth
h, structural geology,
g the
ermal maturiity, and orga
anic content. We
provide selected
s examples of specific
s geo
ologic data tto illustrate our conclusions. We then
mapped and charactterized the th
hree distinct Paleozoic sshale leads d
discussed be
elow.
X-3. Structurall Elements of Sichuan Basin and Adjoini ng Yangtze Pllatform Showing ARI-Proprrietary
Figure XX
Shale Data Locations and d High-Graded
d Areas for Caambrian, Silurrian, Permian Shales.
Source: ARI,
A 2013.
June, 2013 XX
X-12
XX. China EIA/ARI W
The
T Sichuan
n Basin / Ya
angtze Platfform region
n behaved a
as a passivve margin d
during
Sinian (P
Precambrian
n) to Mesozoic time, tra
ansitioning iinto a forela
and basin setting during
g the
Mesozoic
c to Cenozo
oic. Three major tecto
onic events punctuated this time in
nterval, inclu
uding
regional extension during
d aledonian and Hercynia
the Ca an orogeniess (Ordovicia
an to Permia
an), a
structural transitiona
al phase during
d the Indosinian to early Y
Yanshanian orogenies, and
compression during the
t late Yan
nshanian to Himalayan
H o
orogenies (C o Neogene).4
Cretaceous to
The
T modern
n-day Sichu
uan basin comprises four tecto
onic zones: the North
hwest
Depressiion, Central Uplift, and the East and
d South Fold
d Belts. The
e Central Uplift, characte
erized
by relativ
vely simple structure an
nd comparatively few fa
aults, appea
ars to be the
e most attra
active
region fo
or shale gas
s developme
ent. In contrast, the Ea
ast and Soutth Fold Beltts of the Sicchuan
Basin are
e structurally
y more comp
plex, charac
cterized by n
numerous clo
osely spaced
d folds and ffaults
with large offset; the
ese areas arre not considered prosp
pective for sshale gas de
evelopment. For
example, a cross-section throug
gh the northe
ern Sichuan Basin show
ws relatively simple strucctural
condition
ns in the Central
C ng abruptly into the highly faulted
Upliftt transitionin d and defo
ormed
eastern fold
f gure XX-4.5 The adjoining Yangtze
belt, Fig e Platform to
o the south and east is even
more structurally complex, but lacks
l data control
c and is quite cha
allenging to assess for sshale
developm
ment.
Figure XX
X-4. Northwesst-Southeast Structural
S Cro
oss-section off Northern Sicchuan Basin, SShowing Relattively
Simple Struccture in Centraal Uplift Transitioning into H
Highly Faultedd Fold Belt in tthe East.
Source: Zou
Z et al., 2011.
June, 2013 XX
X-13
XX. China EIA/ARI W
The
T new geo
ologic data indicate tha
at only the southweste
ern quadrantt of the Sicchuan
Basin me
eets the sta
andard explo
oration criterria for shale
e developme
ent: suitable
e shale thickkness
and deptth, dry to we
et gas thermal maturity, and absencce of extreme structural complexity. The
prospective area we
e mapped with
w new da
ata is consid
derably sma n the initial 2011
aller than in
EIA/ARI study. This
s emerging “sweet spot” in the south
hwest Sichu
uan Basin do
ominates Ch
hina’s
asing and drrilling activity, as it appears to offe r China’s be
shale lea est combina
ation of favo
orable
geology, good acces
ss with flat surface
s cond
ditions, exis ting pipeline
es, abundan
nt water supplies,
ess to major urban gas markets.
and acce m
Other
O parts of
o the Sichua
an Basin are ographically complex or have
e structurallyy and/or topo
elevated H2S contam
mination. The
T 2008 Sichuan earth
hquake, cen
ntered in We
enchuan Co
ounty,
occurred along activ
ve strike-slip
p faults in the
t northwe
est portion o
of the Sichu
uan Basin. This
as shale po
region ha otential but was screened out due to excessivve structura
al complexityy. In
addition, the conven
ntional rese
ervoirs in the northern portion of tthe Central Uplift can have
extremely high hydrrogen sulfide
e content, frrequently in excess of 10% by vollume, cause
ed by
thermoch
hemical sulfa n (TSR).6 Not
ate reduction N only doess H2S reducce gas reservves and incrrease
processin
ng costs, it is
s a dangero
ous safety ha
azard as welll: in 2003 a sour gas we
ell blew out iin the
Luojiazaii gas field, killing 233 villagers. Carbon dio
oxide conten
nt also can
n be high in
n the
northeas asin (~8%). Consequen
st Sichuan Ba ntly, northea
ast Sichuan w
was screene
ed out as we
ell.
The
T four ma
ain organic-rrich shale ta
argets in th
he Sichuan Basin are tthe L. Cam
mbrian
Qiongzhu
usi, L. Siluria xi, the L. Perrmian Qixia, and the U. Permian Lo
an Longmax ongtan forma
ations
and theirr equivalents
s, Figure XX
X-2. These units
u source
ed many of th
he conventio
onal reservo
oirs in
the Sichu
uan Basin. Most importtant is the L. Silurian Lo
ongmaxi Fm
m, which contains an ave
erage
1,000 ft of
o organically rich, black
k, graptolitic
c-bearing, si liceous to cherty shale. TOC conte
ent is
mostly lo
ow to mode
erate at up to 4%, con
nsisting ma inly of Type
e II kerogen. Figure XX-5
illustrates entional pet roleum well, ranging fro
s TOC distrribution in a deep conve om 0.4% to over
4%.7 Thermal matturity is high
h and incre
eases with depth, rang
ging from dry gas pron
ne to
ure (Ro 2.4%
overmatu % to 3.6%). Porosity me
easured from
m the Wei-201 and Ning
g-201 shale wells
was over 4% but this paramete
er is difficultt to measure uently underrestimated.8 The
e and frequ
Longmax
xi has exhib
bited gas sh eep conventional wells in the southern
hows in at least 15 de
Sichuan Basin.9
June, 2013 XX
X-14
XX. China EIA/ARI W
Fig
gure XX-5. TOOC Distribution of L. Siluriaan Longmaxi FFm in a Deep
Petrroleum Explorration Well, Sichuan Basin, Showing 0.4% % to Over 4%.
Source: Liu et al., 2011

2
The
T an Basin is the Camb
second shale gas target in the Sichua brian Qiongzhusi
on. Although deeper th
Formatio han the Long
gmaxi and m
mostly scree
ened out byy the 5-km d
depth
cutoff, th
he Qiongzhu
usi contains high-quality
y source roccks that pro
ovide further shale reso
ource
potential. The forma
ation was de
eposited und
der shallow marine con
ntinental she
elf conditionss and
has an overall
o thickn
ness of 250 to
t 600 m. Of
O particular note is the 60 to 300 m of high-gam
mma-
ray black ch has aboutt 3.0% TOC (sapropelic)) that is dry--gas-prone (a
k shale, whic about 3.0% Ro).
The
T Qiongzhusi black sh
hale is consid
dered the prrincipal sourrce rock for the Weiyuan
n gas
field in th
he southern Sichuan Bas
sin, where th
he organicallly rich hot shale is abou
ut 120 m thicck out
of 230 to
o 400 m of to on thickness. Mineralog y appears fa
otal formatio avorably britttle, being hiigh in
June, 2013 XX
X-15
XX. China EIA/ARI W
quartz an
nd other brittle minerals (65%) and fairly low in clay (30%). In 1966 a conventiona
al gas
wed nearly 1 million ft3/day from an unstimulate
well flow ed organic-ricch Qiongzhu
usi shale intterval
at a dep
pth of 2,800 m. PetroC
China recenttly tested th
he first horizzontal well ccompleted in the
Qiongzhu
usi at Weiyu e Activity below).10
uan field (see
The
T Yangtze
e Platform area
a is struc
cturally more
e complex than the Sichuan Basin,, with
only scan
nt well contrrol, very little
e of which has
h been pu
ublished. Th
he Paleozoic sequence here
has been tectonically deformed
d and partly
y eroded. Indeed, the
e shales are
e not contin
nuous
e in the Sichuan Basin but
deposits as they are b rather iso
olated remnant basins w
which are difficult
to high grade
g with current
c data
a availability. Neverthe less, Chevrron and BP have expre
essed
interest in the regio
on, while res
searchers have
h begun to map outt potentiallyy favorable sshale
ment areas.11
developm
Our
O analysis of the Yang
gtze Platform
m depends h
heavily on o
outcrop and road cut stu
udies,
such as the
t Cambria
an correlation shown in Figure XX-6
6; subsurface mains weak. For
e control rem
example, Figure XX
X-7 shows TOC
T vs dep
pth distributio
on for a 10
00-m thick o
outcrop of th
he L.
Cambrian Xiaoyanxi Formation in the Yanw
wutan-Lijiatuo
o area, Yang m.12 Black sshale
gtze Platform
als nearly 100 m thick wiith exception
here tota nally rich ave
erage 7.5% TOC. The u
underlying S
Sinian
Liuchapo
o Formation consists ma
ainly of chert with avera
age 2.3% T
TOC. Figure
e XX-8 show
ws an
outcrop photo
p of L. Cambrian black
b chert north
n of Gui yang city, G
Guizhou Pro
ovince, displa
aying
the unit’s
s strong bedd er.13
ding and britttle characte
The
T Jiangha
an Basin is a convention g region covvering 14,500-mi2
nal petroleu m producing
in the ce
entral Yangtze Platform
m of Jiangxi and Hube
ei provinces, close to tthe major city of
Wuhan. Jianghan is a rift ba
asin that de n the Centrral Yangtze Platform d
eveloped on during
ous to Tertia
Cretaceo ary time, indu
uced by tran
nspressional tectonics re
elated to Ind
dia’s collision
n with
Asia. So
omewhat ov
verlooked fo
or shale exp
ploration, the
e Jianghan Basin has Lower Paleozoic
shale so
ource rocks -- similar to
o those in Sichuan
S and
d the Yangttze Platform
m -- with suitable
thickness
s, depth, TO
OC, and Ro, although ev
ven in high-g
graded area
as they are m
mostly deep
p (4-5
km) and significantly
y faulted. Figure
F XX-9 illustrates tthe structura
al elements of the Jian
nghan
Basin, along with ARI-proprieta
A ary shale ga
as data loc ations and the high-grraded locatio
on of
Cambrian, Silurian, and
a Permian
n shale leads
s.
June, 2013 XX
X-16
XX. China EIA/ARI W
Figu
ure XX-6. Outtcrop Litholog
gy of the Camb
brian Sequencce Across thee Western Yanngtze Platform
m
Source: Guo
G et al., 200
06.
Figure XX-7.
X TOC vs Depth Distribution at Outcrrop of the L. CCambrian Xiaooyanxi Fm Blaack Shale, Yanngtze
Platform. Black Shalee Totals Nearlyy 100 m Thick with Averagee 7.5% TOC. TThe Underlyingg Sinian Liuchhapo
Fm is Mainly Chert with 2.33% TOC.
Source: Guo et al., 2007.
June, 2013 XX
X-17
XX. China EIA/ARI W
Figure XX-8.
X Outcropp Photo of L. Cambrian
C Blacck Chert Northh of Guiyang CCity,
Guizzhou Provincee. Note Beddiing and Brittlee Character. P
Pen for Scale.
Source:
S Yang
g et al., 2011.
Figure XX-9. Structtural Elementss Map of the Jianghan Basi n Showing AR RI-Proprietaryy Shale Gas Daata
a Relative Size of the Prosspective Areaas for Silurian and Permian Shales.
Locations and
Source: ARI,
A 2013.
June, 2013 XX
X-18
XX. China EIA/ARI W
The
T Jianghan Basin is structurally more
m comple
ex than the S
Sichuan Bassin, although
h less
so than the
t Yangtze Platform. Jianghan
J com
mprises a nu
umber of sm
mall fault-bou
unded upliftss and
depressio
ons. Quatternary alluv
vium covers
s most of tthe basin ssurface, refflecting Neo
ogene
subsiden
nce. Its struc
ctural history
y records La
ate Cretaceo
ous to Paleogene extenssion (ENE-W
WSW)
which originally form
med the grab
ben structure
es, Late Pale
eogence compression ((EW) and grraben
deformattion, then Neogene
N exttension (NE--SW and N W-SE) whicch rejuvenatted the grab
bens,
and finallly Late Neo
ogene comp
pression (NE
E-SW) which
h activated right-lateral strike-slip ffaults
that continue to be active today.14
1
The
T Jianghan Basin con o 10 km of Cretaceouss to Quaterrnary non-m
ntains up to marine
sedimentts overlying U. Paleozo
oic marine source rockks, Figure X
XX-10, with potential so
ource
rocks present in Sinian, L. Ca
ambrian, U. Ordovician , L. Silurian
n, Jurassic, and Paleo
ogene
formation
ns. The Eo
ocene Qianjiang Formation is the main conve
entional sand
dstone rese
ervoir,
self-sourrced by interrbedded lacustrine shales and trap ped within ffaulted anticclines overla
ain by
cap rocks
s of interbed
dded gypsum orites.15
m-rich evapo
The
T most prrospective source
s rock
ks for shale
e gas deve
elopment arre dry-gas-p
prone
Cambrian and Silurian units, along
a with liquids-rich P
Permian sha
ale potential. Recent sshale
analysis noted the average
a thickness of org n Longmaxi Formation to be
ganically ricch L. Silurian
120 m (390 ft).16 Measured
M TOC
T from th
he L. Camb
brian Shuijin
ntuo Formattion is favorrable,
ranging from
f o 7.78%.17 Thermal
5.35 to T matturity data a
are scarce but indicate g
gas-prone shales
(Ro 1.5%
% to 2.5%) in most of th
he basin, be
ecoming the
ermally overrmature in th
he northwesst (Ro
3.5% to 5%).18 In contrast,
c Eoc
cene lacustrrine shales iin the Jianghan Basin a
are immaturre (Ro
0.4%), lik
kely clay-rich
h, and not co
onsidered prrospective fo
or shale.
June, 2013 XX
X-19
XX. China EIA/ARI W
Fig
gure XX-10. Stratigraphy
S of
o the Jianghan n Basin, Highllighting Potenntially Prospecctive Sinian,
L. Cambrian, U. Ordovvician, L. Silurrian, Jurassic,, and Paleogene Source Roocks.
GHAN BASIN
JIANG
ERA
A PERIO
OD EPOCH FORMA
ATION
QUATER
RNARY Pleistocene
P Pingy
yuan
CENOZOIC
NEOGEENE Miocene Guangghusai
Oligocene Jinghe
ezhen
Eocene Qianjjiang
PALEOG
GENE Jins
sha
P
Paleocene Xingo
ouzhui
Shaashi
Paomagang
Upper Honghhuntao
CRETAC
CEOUS Luojin
ngtan
Lower
MESOZOIC
Xiaximiao
Middle
JURAS
SSIC Naijia
ashan
Lower Tongz huyian
Wanglo ongtan
Upper
Jiuig
gang
TRIAS SIC Middle Baddong
Jialing
gjiang
Lower
Da
aye
Daloong
Upper Wikoaping
PERM
MIAN Mao okou
Lower
Qix
xia
Chuan
nshan
Upper
CARBONIF
FEROUS Huanglong
Lower
DEVON
NIAN Middle
Middle Shamao
SILUR
RIAN eping
Luore
Lower
PALEOZOIC
Long
gmaxi
Wuffeng
Upper Lingx
xiang
Bao
ota
Miaopo
ORDOVICIAN Guniiutan
Dawwan
Lower Honghuuayuan
Fenxxiang
Nanjin
nguan
Upper Shanyooudong
Middle Qinjia
amiao
Shilon
ngdong
CAMBR
RIAN Tianhheban
Lower Shiipai
Shuijintuo
gyin
Deng
Upper
AN
SINIA Duosh
hantuo
Lower Nan
ntuo
Source Rock Conventiona

al Reservoir
Source: ARI, 2013..
Cambrian
C and Silurian sh
hales occur at non-prosspective depths of 5 to o
over 10 km iin the
western depressions
d ghan Basin, but are sha
s of the Jiang allower and m
may be prosspective on u
uplifts
in the ea
ast and norrtheast. or example, a regional cross-sectiion shows S
Fo Silurian sha
ale at
prospective depth (3-4 km) at the
e Yuekou, Longsaihu,
L Y
Yajiao-Xingo
ou uplifts, altthough signifficant
faulting here
h may ne
egatively impact shale developmen
d X-11.19 Sim
nt, Figure XX milarly, a dettailed
cross-sec
ction of the Mianyang Depression
D in
n the eastern
n Jianghan B
Basin showss L. Silurian to be
about 50
00-m thick (u
up to 1 km thick
t here), faulte d, and 4 to 5 km deep,, Figure XX--12.20
elsewh
June, 2013 XX
X-20
XX. China EIA/ARI W
The unde
erlying Cambrian section is about 1 km thick, fa
aulted, and uplifted to a
about 2-km d
depth
in the so
outheastern Jianghan Basin,
B Figurre XX-13.21 We identiffied three m
marine Paleozoic
source-ro
ock shale le
eads in the Jianghan Basin
B (L. Ca
ambrian, L. Silurian, an
nd Permian; see
below).
Figure XX
X-11. Regionaal Cross Sectiion of the Cenntral Jianghan Basin Showss Significant FFaulting Whichh May
Impaact Shale Devvelopment. Caambrian and Silurian
S Shaless are too Deepp (>5 km) to bbe Considered
Prosspective in thee Troughs, butt may be Suitaably Shallow oon the Uplifts..
Source: Zhang
Z et al., 2010.
2
Figure XX
X-12. Detailed
d Cross-sectio
on from Mianyaang Depressioon in the Easttern Jianghan Basin. The LLower
Silurian
S Sectio
on Here (“S”) is about 500-m
m Thick, 4 to 5 km Deep, annd Significantlly Faulted.
Source: Chen
C et al., 20
005.
June, 2013 XX
X-21
XX. China EIA/ARI W
Figure XX-13. Localizzed Cross Secctions in the S

Southeastern Jianghan Bassin.
The Cambriaan Section Herre is Faulted aand about 1 km
m Thick.
Source: Li
L et al., 2007.
Subei
S Basin English articcles available for this p
n. With only 13 Chinese and 7 E poorly
nted basin, mappable geologic
documen g datta are relati vely sparse X-14. The basin
e, Figure XX
covers a 14,000-mi2 portion of the
t lower Ya he coast in JJiangsu Province
angtze Platfform near th
north of Shanghai. Small conve
entional oil fields
f have b
been discovvered, the la
argest of which is
Sinopec’s structurally complex Jiangsu field near the center of th
he basin. A
Although situ
uated
y close to prosperous
enticingly p ncluding Sh
East China markets, in hanghai, the
e Subei Bassin is
structurally complex
x and quite deep, with Paleozoic shales mosstly 3.5 to 5 km below
w the
surface. Figure XX-15, a structtural cross-s
section thro
ough the ba
asin and adjjoining regio
on to
Shangha
ai, shows major
m faults and the de
epth to Pale ales.22
eozoic sourrce rock sha Dettailed
structure
e is likely to be
b even morre complex than indicate
ed here.
Sedimentary
S rocks in th
he Subei Ba
asin range ffrom L. Cam
mbrian to E
Eocene, inclu
uding
potentially prospectiv
ve marine shale
s source
e rocks of L.. Cambrian, L. Silurian, and U. Perrmian
age, Figure XX-16.23
2
Conglom
merates and mudstones of the U. C
Cretaceous to L. Paleo
ocene
Taizhou Group are the
t conventional petrole
eum targets in the basin
n, as well ass possible so
ource
emselves.
rocks the
June, 2013 XX
X-22
XX. China EIA/ARI W
Figure XX-14. Stru

uctural Elements Map of thee Subei Basin Showing ARII-proprietary SShale Gas Datta
Locations and
a Prospectivve Areas for L.
L Cambrian, LL. Silurian, andd U. Permian Shales.
Source: ARI,
A 2013.
Figure
F XX-15. Structural Cross-section of
o Subei Basinn and Adjoininng Region to Shanghai,
Sh
howing Major Faults and Deepth to Paleozzoic Source Roock Shales.
Source: Moore
M et al., 1986.
June, 2013 XX
X-23
XX. China EIA/ARI W
Figure XXX-16. Stratigraaphy of the Paaleozoic Strataa in the Subei Basin, Highligghting
Potentiaally Prospectivve L. Cambriann, L. Silurian, and U. Permiaan Source Roocks.
ERA PER
RIOD EPOC
CH MEMBER FORMATION LITHOLOGY / COMMENT
TS
Limestone
es/siliceous shale, chert,
c
P3c Changxing/Talung Fm
F
limestone
Upp
per
P 3l Longtan Fm Sandstones, mudstones,
m limeston
nes, coal.
PER
RMIAN
P 2g Kuhfeng Fm Siltstones, siliceous
s shale, and
d chert.
Low
wer P 2q Chihsia Fm Dark greyy limestones with ch
hert.
P 1c Chuanshan Fm Ligh
ht grey limestone.
C2h Huanglung Fm ey limestone/ dolomite.

Light gre
Upper C2l Laohudong Fm Light--dark grey dolomite..
Hezhou Fm Limesto
ones, marls, dolomit es.
CARBON
NIFEROUS C1g Gaolishan Fm Mudstone, siltstone, fine sandsstone.
Kinling Fm mestones with sand

Dark grey lim dstone.
Low
wer
Grey-green mudstones
m and sand dstones,
Laokan Fm
PALEOZOIC
argillaceous dolomite.
Grey-white
e quartzose sandsto
ones,
DEVO
ONIAN D3w Wutong Fm
conglo
omeratic sandstoness.
Upper S3m/S2f Maoshan/Fentou Fm
F Quartz sandsttone, siltite mudston
ne, shale.
SILU
URIAN
Low
wer S1g Gaojiabian Fm
m S
Shale, siltstone.
O3w Wufeng Fm Siliceou

us shales, mudstone
es.
Tangtou Fm Argillaceo
ous limestone and s hale.
Upper
Tangshan Fm Argillaceouss limestone and mud
dstone.
ORDO
OVICIAN
Dawan Fm Siliceous limestone and sha
ale.
Hunghuayuan Fm
m G
Grey limestone.
Low
wer
Lunshan Fm Grey do
olomite and limeston
ne.
Loushanguan, Grey and whhite thick-bedded do
olomite,
Upper/M
Middle ∈1l, ∈2p
Paotaishan Fms dark grey thick-bedded limesttone.
CAMBRIAN
Black carbonnaceous shale (uppeer); dark
Low
wer ∈ 1mu Mufushan Fm
m grey thin-b
bedded limestone (lo
ower).
Sourc
ce Rock
Mo
odified from Qi
Q & Zhu, 200
02.
The
T L. Camb
brian Mufush
han Formation is 91 to 758 m thickk (gross) in the Subei B
Basin.
Its lower portion (2 to
t 363 m thiick) contains
s dark grey to black mu
udstones and shale. So
ource
rock thickness is 40 to 250 m th
hick, averaging 120 m th
hick, with low
w-moderate organic rich
hness
(1.1 to 3..1% TOC, av %).24 This un
verage 2.1% nit appears tto be gas-prrone at prospective deptths of
4 to 5 km
m. Unfortun
nately, the Cambrian
C is
s deeper tha
an 5 km across nearly the entire S
Subei
Basin and 7 to > 9 km
m deep to th
he south and
d west of Sha
anghai.
June, 2013 XX
X-24
XX. China EIA/ARI W
The
T U. Ordov
vician Wufen
ng and L. Siilurian Gaoji abian forma
ations contaiin siliceous sshale
and mud c richness (0.6 to 1.3%
dstone with low organic % TOC). Th
hese units a ne at
are gas-pron
prospective depths of
o 3.5 to 5 km.
k The Wufeng
W Fm iss 4 to 214 m thick (gross) and con
ntains
grey and
d black silice
eous shales & mudstone. The L. S ojiabian Fm is 25 to 1,720 m
Silurian Gao
thick (grross) and contains
c darrk grey sha
ale with an upper laye
er of interb
bedded siltyy fine
sandston
nes. The co
ombined sou
urce rock thickness rang
ges from 75 to 450 m, a
averaging 25
50 m.
TOC is about
a 1.3%, lower than in
n the Cambrrian source rrocks.
The
T 1-km thiick U. Perm
mian Changx
xing/Talung formations also contain
n siliceous sshale
and mud
dstone of un
ncertain TOC
C that are gas-prone
g att relatively sshallow deptths (1 – 2.5 km).
Finally, black
b mudsttones of the
e U. Paleocene to M. E ning Group contain oil sshale
Eocene Fun
interbeds
s that forme
ed in a deep
p lake settin
ng and sourcced the bassin’s conven
ntional sandsstone
fields; the
ese mudston
nes are imm
mature to liqu
uids-prone (R o 0.9%).25
Ro ≈ 0.4% to
1.2 Reservoir
R Prroperties (P
Prospective Area)
Having
H discu
ussed the regional
r ology of th e South China Shale Corridor in
geo n the
preceding section, we now de
escribe the reservoir p
properties sspecific to the high-grraded
prospective areas in each basin.
Sichuan
S sin. The 10,070-mi2 hig
Bas gh-graded arrea defined by prospecttive depth an
nd Ro
distributio
on is located in the sou
uthwestern Sichuan
S bassin. Here the L. Siluria
an Longmaxxi Fm
contains about 1,000
0 ft of organ
nically rich, black, grapttolitic-bearin
ng, siliceouss to cherty sshale.
ntent is app
TOC con proximately 3%
3 and dry
y gas prone
e (Ro 2.9%).. In additio
on, the Cam
mbrian
Qiongzhu
usi Fm averages 500 ft
f thick, with C within its 6,500-mi2 p
h 3.0% TOC prospective area,
where it is in the dry gas thermall maturity window (3.2%
% Ro).
The
T Upper Pe
ermian Long
gtan and Low
wer Permian ations, best developed iin the
n Qixia forma
central and southeas
st Sichuan Basin,
B contain an averag
ge total 314 ft of organic-rich shale, with
TOC ranging from 2-6% (averag
ge 4%). Depth to shale
e within the prospective area (1 to 5 km)
averages
s 9,700 ft. These
T shales
s are dry-ga
as prone, witth vitrinite re anging from 2.0%
eflectance ra
to 3.0% (average
( 2.5
5%).
Shale
S targets
s in the Sich
huan Basin are quite diffferent from North Ame
erican shaless, but
the close
est North Am
merican anallog may be the
t relativelyy faulted central Pennsyylvania portiion of
the Marc
cellus Shale play.
June, 2013 XX
X-25
XX. China EIA/ARI W
Yangtze
Y Pla
atform. A specific pro
ospective arrea could no
ot be mapp
ped here du
ue to
structural complexity
y and the pa
aucity of data. Howeve r, activity byy major oil ccompanies in
n this
area sug
ggests there may be pottential, perha
aps in local synclinal are
eas. Reserrvoir propertiies of
L. Cambrian and L. Silurian
S form
mations in th
he Yangtze P
Platform gen
nerally are ssimilar to tho
ose in
huan Basin.
the Sich We assu
umed that prospective
p areas coulld be perha
aps 20% o
of the
prospective Sichuan Basin areas
s for each off the L. Cam
mbrian and L. Silurian forrmations.
Again,
A the sh
hale targets
s in the Yan
ngtze Platfo
orm do not closely rese
emble any N
North
American
n shale analogs. Perha
aps the struc
cturally com
mplex, dry-ga
as prone Utica Shale pllay in
Quebec is the closes
st North Ame
erican appro
oximation.
asin. The L.
Jianghan Ba L Cambrian Formation ((1,280-mi2 h
n Niutitang F high-graded lead)
has the best organic richness (6.6%), is dry-gas pro
one (Ro ~2.25%) but a
also the dee
epest
e 13,000 ft). The L. Silurian Longma
(average on (1,960-mii2 high-grade
axi Formatio ed lead) hass less
organic richness
r (TO
OC of 2.0%)), also is drry-gas prone
e (Ro ~2.0%
%), and is found at moderate
depth (av
verage 11,500 ft). Finally, the Perm Maokou Fm ((2,150-mi2 h
mian Qixia/M high-graded lead)
has lowe
er organic richness (2.0
0%), is still dry-gas
d pron
ne (Ro ~1.5
5%) and occcurs at shallower
depth (av
verage 9,000
0 ft). The ge
eothermal gradient in th
he Jianghan Basin is mo
oderate, simiilar to
26
that of the Sichuan Basin.
B
The
T relatively
y faulted Ma ale play in central Pen
arcellus Sha may be a distant
nnsylvania m
analog fo
or the Jiangh
han Basin, although
a Jian
nghan is stru
ucturally mucch more com
mplex.
Subei
S Basin
n. Marine-d
deposited source
s rock shales in the L. Cam
mbrian Mufu
ushan
Formatio
on average 120
1 m thick, with 2.1% average TO
OC. These a
are gas-pron
ne at prospe
ective
depths of
o 4 to 5 km. Source roc
cks in the th
he U. Ordovvician Wufen
ng and L. Silurian Gaojia
abian
formation
ns total an average
a 250
0 m thick, co
onsisting of siliceous sh
hale and mu
udstone with
h low
1.1% TO
OC; these allso are gas--prone at prrospective d epths of 3.5
5 to 5 km. The U. Perrmian
Changxin
ng/Talung fo
ormations co
ontain siliceo
ous shale an
nd mudstone
e of uncertain
n TOC (assu
umed
to be 2%
%) that is gas
s-prone at relatively shallow depths ((1 to 2.5 km).
The
T relatively
y faulted Ma
arcellus Sha
ale play in central Pen may be a distant
nnsylvania m
analog fo ough Subei is structurallyy much more
or the Subei Basin, altho e complex.
June, 2013 XX
X-26
XX. China EIA/ARI W
1.3 Resource
R As
ssessment
Having
H defined the rese
ervoir prope
erties of the
e high-grade
ed prospecttive areas in
n the
South China
C Shale
e Corridor, we now es
stimate the risked, tecchnically re
ecoverable sshale
es and original shale gas
resource s and shale oil
o in place fo
or each basin.
Sichuan
S sin. Much of
Bas o the Sichua
an Basin is sstructurally ccomplex and
d/or contamin
nated
with H2S and thus was
w screened
d out as non
n-prospectivve. Howeve
er, the southwest quadra
ant of
the basin
n has marine
e Paleozoic shales
s a prospecttive. Within our high-gra
that are aded prospe
ective
area, the
e Silurian Longmaxi Formation
F has
h an esttimated 287
7 Tcf of rissked, techn
nically
as resources
s out of 1,14
46 Tcf of rissked, shale g
gas in-place
e. The Cam
mbrian
Qiongzhu
usi Formatio
on has 125 Tcf
T of risked
d, technicallyy recoverab
ble shale gass resources from
500 Tcf of
o risked, sh
hale gas in-p
place. Perm
mian formatio
ons have an estimated 2
215 Tcf of rissked,
as resources
s out of a depth- and Ro--screened 715 Tcf of risked shale ga
as in-
place.
Based
B on the
ese data and
d assumptio huan Basin is China’s largest shale
ons, the Sich e gas
region, with
w an estim
mated 2,361 Tcf
T of risked
d, prospectivve shale gass in-place, off which 626 T
Tcf is
considere
ed risked, technically
t recoverable
r shale gas resources, Table XX-1. These fig
gures
exclude the majority
y of the basin area, which was scre
eened out due to excesssive depth, H2S,
and struc
ctural complexity issues
s. Further more
m ed study is rrecommended to define
detaile e and
map thes
se paramete
ers and refin
ne the still po
oorly undersstood shale g
gas resourcce potential o
of the
Sichuan Basin.
Yangtze
Y Pla
atform. Using Sichua
an Basin rreservoir prroperties an
nd an assu
umed
prospective area 20
0% as large as Sichuan
n’s, the L. C
Cambrian and L. Siluria
an shales o
of the
Yangtze Platform arre estimated
d to have 14
49 Tcf of rissked, technically recove
erable shale
e gas
resource
es out of 596
6 Tcf of risked shale gas in-place.
Jianghan Ba
asin. The L. Cambria
an has an e
estimated 1
11 Tcf of rissked, techn
nically
as resources
s, out of a de
epth- and Ro -screened 4
46 Tcf of riskked shale ga
as in-
place. The
T L. Siluria
an Longmax
xi Fm is pros
spective with mi2 high-gra
hin a 1,960-m aded lead, ad
dding
an estimated 7 Tcf of
o risked, te
echnically recoverable s hale gas resources outt of a depth-- and
Ro-screened 28 Tcf of ale gas in-place. The P ermian Qixia
o risked sha a/Maokou Fm is at moderate
depth (9,000 ft average). ARI mapped a 3,830-mi2 high-graded
d lead for th
he three the
ermal
maturity windows, with
w an esttimated 10 Tcf of riskked, techniccally recove
erable shale
e gas
June, 2013 XX
X-27
XX. China EIA/ARI W
resource
es, out of a depth-
d and Ro-screened 40 Tcf of riisked shale gas in-place
e. Jianghan
n also
has a minor Permia
an shale oil play contain
ning 5 billio n barrels off resource in-place, with 0.2
billion ba
arrels as the risked, technically recov
verable shal e oil resourcce.
Subei
S Basin. Although geologic
g datta are scarce 0-mi2 high-grraded
e, ARI identiified a 2,040
lead in th
he L. Cambrrian Mufusha
an Formation
n with an esstimated 7 Tccf of risked, technically sshale
gas recoverable reso
ources, out of
o a depth- and
a Ro-scree
ened 29 Tcf of risked sh
hale gas in-p
place.
The L. Silurian Gaob
biajian Forma
ation appearrs to be prosspective with 0-mi2 high-grraded
hin a 14,990
ding an estim
lead, add mated 36 Tc
cf of risked, technically
t rrecoverable shale gas re
esources ou
ut of a
depth- an
nd Ro-screen
ned 144 Tcff of risked sh
hale gas in-p
place. The p
poorly define
ed Permian sshale
may be prospective
p 640-mi2 area
within a 1,6 a, with 2 Tcff of risked, ttechnically re
ecoverable sshale
gas resources out off 8 Tcf of ris
sked shale gas
g in-place.. Subei also
o has a mino
or Permian sshale
oil play containing
c 1 billion barrrels of resource in-placce with 0.1 billion barre
els as the rissked,
ble shale oil resource.
1.4 Recent
R Activ
vity
The
T Sichuan
n Basin by fa
ar is China’s e shale leasing and drilling area. Drilling
s most active
programs
s currently are underway by Petro
oChina, Sino Shell, while numerous other
opec, and S
Chinese and foreign companies are negotiating initial le
ease position
ns. The Min
nistry of Land
d and
es began drrilling shale delineation
Resource d wells
w in the S
Sichuan Bassin in 2009. PetroChina
a and
Sinopec, which are engaged in
n shale dev
velopment J V’s in North
h America, each hold large
ease position
legacy le ns in the bas
sin. Earlier this year Sh
hell and CNP
PC were aw
warded the 3
3,500-
km2 Fush
hun-Yongchuan block, lo
ocated in the
e southern S
Sichuan closse to a legaccy Shell tigh
ht gas
exploratio
on block. The
T Fushun
n-Yongchuan
n block is C
China’s first foreign-inve
ested produ
uction
sharing contract
c for shale gas. Shell also is
s pursuing jo
oint studies on two othe
er Sichuan B
Basin
shale blo
ocks (Zitong,, Jinqiu), which would give the comp
pany a total shale/tight a 0 km2
area of 8,500
ed.27
if awarde
Shale
S explora
ation drilling
g results in the
t Sichuan Basin have
e been mixe
ed. PetroCh
hina’s
first repo
orted horizon
ntal shale ga
as exploratio
on well, loca
ated near th
he city of Ch
hengdu, targ
geted
the Siluriian Longmax
xi Formation
n. The Wei 201-H1 wel l, which emp
ployed a 3,5
540-ft long la
ateral
gging-while-drilling tech nology,28 co
and was drilled with modern log ompleted its drilling pha
ase in
011 after 11 months. However, this
March 20 s well tested
d a disappoin
nting 450 Mcfd average
e over
a 44-day
y period, fo
ollowing a la e, 11-stage slickwater frac comple
arge-volume etion which was
June, 2013 XX
X-28
XX. China EIA/ARI W
seismic.29
monitored using real-time micros
Elsewhere
E in the Sichuan
n Basin, PettroChina hass fracture sttimulated at least five ve
ertical
wells tarrgeting the Longmaxi Formation and two vvertical wellss targeting the Qiongzhusi
on.30 PetroC
Formatio China’s first horizontal
h Qiiongzhusi we
ell (Wei 201-H3), locate
ed in the Weiyuan
gas field, is the only
y horizontal reported in detail by P
PetroChina. The well te
ested this 110-m
ck shale at a depth of 2,600
thick blac 2 m, wh
here seismicc had indicatted a well-developed na
atural
31
fracture system.
s Lo
og and core analysis showed the Q iongzhusi avveraged 67%
% quartz con
ntent,
22% clay
y, and 2.3% TOC but on
nly about 2.0% porosityy with 100 nD permeability (core-ba
ased).
The horizontal latera
al was less than half of
o its planne
ed 5,000-ft length beca
ause of bore
ehole
stability problems
p encountered during
d drilling
g.
PetroChina’s
P planned 9--stage fractu
ure stimulattion encountered high horizontal sstress
and succ
cessfully pla
aced only 6 stages. Ga
as productio
on peaked a
at 1.15 MMccfd and decclined
rapidly to
o 300 Mcfd, averaging 580
5 Mcfd du
uring the 60
0-day flow te
est. PetroCh
hina inferred
d that
the fracs
s had planarr rather than
n preferred complex ge
eometry and
d the stimula
ated volume
e was
much sm xpected.32 Still,
maller than ex S the testt showed the
e Qiongzhussi shale can be productivve.
Separately,
S Sinopec
S hyd
dro-fractured
d its Fangsh
hen-1 well in
n Guizhou in
n May 2010
0 and
expects to start co
ommercial shale
s gas production
p i n Liangping
g County, n
near Chong
gqing,
Sichuan in 2013. Sinopec’s rece
ent Qianye-1 well in Qia
anjiang, also
o near Chongqing, reporrtedly
a 100 Mcfd.33 No furthe
peaked at er details are
e available frrom Sinopecc’s shale pro
ogram.
In
n Novemberr 2009 Shell signed the initial agree
ement with P
PetroChina to jointly exxplore
for shale
e gas at the Fushun block, southern
n Sichuan B
Basin, receivving the PSC
C in March 2
2012.
Shell spu
ud its first well
w in December 2010, focusing on an Longmaxxi Fm.34 By April
n the Siluria
e company had drilled fiv
2012 the ve deep explloration well s: one verticcal data well, two vertica
al frac
nd two horrizontal frac wells.35
wells, an Whole
W core
e and full p
petrophysica
al logging ssuites
confirmed good reso
ource potenttial, although in-situ we
ell testing de
etermined th
hat the forma
ation,
vorably over-pressured,, had an un
while fav nfavorably h
high stress gradient. High breakdown
pressure
es and fluid leakoff resu
ulted in poor stimulation
n. Neverthe
eless, one o
of Shell’s ve
ertical
exploratio
on wells rep ed at 2.1 milllion ft3/day.
portedly flowe
Shell
S followed
d its first tw
wo vertical Sichuan wellss with two h
horizontal prroduction tessts at
the Fush
hun block. The compa
any noted significant
s fa
ault-related problems, ssuch as freq
quent
June, 2013 XX
X-29
XX. China EIA/ARI W
drilling out of zone and

a resulting doglegs that
t compliccated well co
ompletion. Completion time
d from over 100 days/we
improved ell initially to
o about 53 d
days/well, bu
ut still longer than typica
al 10-
day completion times
s in North Am
merica. She
ell did not re port producttion from its horizontal w
wells.
ConocoPhillip
C ps recently was
w awarded
d two shale exploration blocks in the Sichuan B
Basin.
Chevron is conductting a Joint Study with
h Sinopec o
of the Qiann
nan shale g
gas block in
n the
Yangtze Platform, lo
ocated nortth of Guiyang city, Gu
uizhou Proviince, and ju
ust south o
of the
Sichuan Basin. Che
evron initiate
ed seismic acquisition
a o
over the blocck in July 20
011 and spu
ud its
first test well there during
d Q1 20
012. BP, Co
onocoPhillip
ps, ENI, Exxo
onMobil, Sta
atoil, and TO
OTAL
e reported in
also have nterest in lea
asing shale gas blocks in the Sichu
uan or Yangtze Platform
m. As
of late 20
010 BP was
s reported ne w Sinopec for a shale gas explora
egotiating with ation block a
at the
m2 Kaili block
2,000-km k near Chev
vron’s Qiannan block. In
n July 2011 ExxonMobil was reporte
ed by
Sinopec to be evalua 644-km2 Wuzhishan are a in the Sich
ating the 3,6 huan Basin. Statoil rep
ported
negotiating with PettroChina forr a shale ga
as block an d at one po
oint estimatted 50 MMccfd of
productio NI signed a memorandu
on potential by 2015. EN um of undersstanding with
h CNPC on sshale
gas in ea
arly 2011.
North
N Americ
can shale gas
g n and EOG Resources also
operatorrs Newfield Exploration
reported conducting detailed sh
hale gas eva
aluations in the Sichuan
n Basin durring the passt few
years. Newfield
N conducted a detailed joint study
s evalua
ation with Pe
etroChina at the Weiyuan
n gas
field but decided in 2006
2 not to proceed. EOG
E originallly planned tto make a d
decision on sshale
on in Sichua
exploratio an by late 20
010 but has been silent o
on the project for the pa
ast two yearss.
d Subei Basins. The on

Jianghan and nly reported shale activitty in the Jian
nghan Basin
n was
Sinopec’s Decembe ort of “gas flows in a shale gas e
er 2010 repo exploration well” (no details
provided). The sam oted that BP was eval uating Perm
me report no 0-km2
mian shale iin the 1,000
Huangqia
ao block, the
e only explorration activitty noted thuss far in the S
Subei Basin.
June, 2013 XX
X-30
XX. China EIA/ARI W
2 TARIM
T BAS
SIN
2.1 In
The
T Tarim Ba
asin, located
d in western China’s Xin
njiang Autono
omous Regiion, is the la
argest
onshore sedimentary
y basin in China
C 000 mi2). S
(234,0 Surface eleva
ation of thiss remote bassin is
y flat at abou
relatively ut 1,000 m above
a sea le
evel. The c limate is dryy but aquiferrs which und
derlie
the lightly populated
d region co
ould supply frac water . XX-17 show
Figure X ws the strucctural
elements m Basin, as well as loca
s of the Tarim ations of ARII-proprietaryy data used in conducting
g this
study.
Fig
gure XX-17. Structural
S Elem
ments Map of the
t Tarim Bassin Showing A ARI-Proprietarry Shale Gas
Data Loccations and Prrospective Areeas for Shale Gas and Shalle Oil Explorattion.
Source: ARI,
A 2013
June, 2013 XX
X-31
XX. China EIA/ARI W
PetroChina
P and
a Sinopec
c produced an average
e 261,000 b
b/d of oil frrom conventtional
reservoirrs in the Tarrim during 2011
2 and are
e investing heavily to d
double outpu
ut there by 2
2015.
The basin also produced 1.6 Bc
cfd of natura
al gas in 201
11 that was transported
d to Shangha
ai via
the two 4,000-km West-to-East
W nal petroleu
t pipelines. Convention um depositss, totaling ovver 5
arrels of oil and 15 Tcf of gas, were sourced
billion ba d mainly byy organic-rich Cambrian
n and
Ordovicia
an shales – considered
d the princip
pal targets ffor shale ga
as and oil e
exploration in the
Tarim Ba
asin.
The
T Tarim Ba
asin is sub-d
divided by fa
ault and fold nto a series of seven distinct
d systems in
structural zones, comprising three uplifts and
a four de
epressions. h to south tthese
From north
include the
t Kuqa Depression,
D Tabei Uplift, North D
Depression, Tazhong U
Uplift, South
hwest
Depressiion, Tanan Uplift
U and So
outheast Depression. C
Cross-section
n A-A’, Figu
ure XX-18, shows
a north-tto-south tran
nsect across
s the centra
al Tarim Bassin, revealin
ng generallyy simple reg
gional
structure
e characteriz
zed by shallo
ow dip angle
e and few fa
aults (note e
extreme vertiical exaggerration
of 25x).36 Unfortuna
ately, the main Cambria
an and Ordo
ovician shalle targets arre buried de
eeper
k over most of the ba
than 5 km asin, plungin
ng to a maxximum deptth of 10 km
m or more in
n the
structural troughs.
However,
H inte
erior anticlin
nes within th
he Tarim Bassin include u
uplifted area
as that appe
ear to
be (bare
ely) depth-prrospective for
f shale de
evelopment (<5 km). F
For example
e, Figure X
XX-19
shows Cambrian
C and
d Ordovician
n source roc
ck shales att prospective
e depths ran
nging from 4 to 5
km acros
ss the Tazho
ong Uplift, but
b even herre shale is ju
ust within th
he depth limit for comme
ercial
evelopment.37
shale de 3
Even though much of the Mid
d-Upper Ord
dovician secction was lo
ocally
removed by erosion during the Late
L Paleozo
oic Hercynia
an Orogeny,, a considerable thickne
ess of
this unit remains.
r Ge
eochemistry
y indicates th
hat the conve
entional oil ttrapped in th
he Tazhong Uplift
an rather than Cambrian source rockks.38
originated mainly from Ordovicia
Multiple
M petro
oleum sourc
ce rocks of various
v agess occur in th
he Tarim Bassin, including the
Cambrian, Ordovicia
an, Carbon
niferous, Triiassic, Crettaceous, an
nd Tertiary, Figure XX
X-20.
Marine-d
deposited bla
ack shales of
o Cambrian and particu
ularly Ordoviician age arre considere
ed the
most imp
portant sourc he basin.39 The Ordoviccian units incclude the He
ce rocks in th etuao, Yijian
nfang,
Lianglitag
ge and equ
uivalent forrmations, while L. Cam
mbrian source rock units include
e the
Xiaoerbu
ulake Formattion and equ
uivalent units
s.
June, 2013 XX
X-32
XX. China EIA/ARI W
Figure XXX-18. South-nnorth Cross-seection of the Central

C Tarim Basin Showinng Generally SSimple Structuure as
Well as Migration
M Path
hways for Oil (Red)
( and Gass. Note that Cambrian and O Ordovician Soource Rock Shhales
are Too
o Deep (>5 km
m) for Commerrcial Shale Devvelopment in Most of the Basin, but Locaal Uplifts mayy be
Proospective (verrtical exaggeraation = 25x).
Source: Zhu
Z et al., 2012.
mic Depth Secction across t he Tazhong U

Figurre XX-19. Inteerpreted Seism Uplift, Tarim Basin, Showingg
Cambrian
n and Ordovician Source Ro ock Shales at Prospective D
Depth of 4 to 5 km (vertical exaggeration = 5x)
Source: Xiao
X et al., 200
00.
June, 2013 XX
X-33
XX. China EIA/ARI W
Figurre XX-20. Straatigraphy of the Tarim Basiin, Highlightinng Prospectivee

Cambrian, Ordovician, Carboniferous, Triassic,
T Cretaaceous, and TTertiary Sourcee Rocks.
TA
ARIM BASIN
ERA PERIOD
D EPOCH
H FORMATION
N AGE (Ma) THICKNESS (m)
QUATERNAR
RY Q
CENOZOIC
N2a
TERTIAR
RY N1w
Eh
K2y
OUS
CRETACEO K1y
MESOZOIC
J 3k
J 2t
JURASSIC J2y
J1k
TRIASSIC
C
Shazijing
Upper
PERMIAN
N Aqiaqun 290 0 - 780
Middle-Low
wer Aqiaqun
Upper-Middle Xiaohaizi
CARBONIFER
ROUS Kalashayi 290 - 355 0 - 691
Lower
Bachu
DEVONIA
AN 355 - 405 0 - 241
PALEOZOIC
Upper
SILURIAN
N Middle 405 - 439 0 - 517
Lower
0 - 300
Upperr Hetuao (O1-2) 439 - 459
org-rich
0 - 150
ORDOVICIIAN Middle
e Yijianfan (O2) 459 - 478
org-rich
0 - 50
Lowerr Lianglitage (O
O3) 478 - 505
org-rich
Upper Qiulitage 2918
CAMBRIA
AN Middle Awatage 505 - 600 125
Lowerr Xiaoerbulakee 74
SINIAN 600+ 200 - 1100
Source Ro
ock Conventiona
al Reservoir
Source: ARI,
A 2013.
The
T Lower Ordovician He
etuao (O1-2) shales -- im
mportant source rocks -- appear to b
be the
most pro
ospective, although TOC
C generally is under 2% hales range from 48 to 63 m
%. These sh
thick and
d consist off carbonace
eous and ra
adiolarian-be
earing siliceo
ous mudsto
one that app
pears
brittle. The
T Mid-Ordo
ovician Yijia
anfang (O2) Saergan
S Forrmation, pre
esent in the K
Keping Uplifft and
Awati De
epression, co
ontains black marine-de
eposited mud
dstones 10 m to 30 m th
hick, with TO
OC of
0.56% to
o 2.86% (av
verage 1.56
6%). Uppe
er Ordovicia
an Lianglitag
ge (O3) sha
ales occur in
n the
Central Tarim,
T Bach
hu, and Tabe
ei areas, wh
here they arre 20 m to 80 thick, ca
arbonate-rich
h, but
with relattively low TO
OC (average
e 0.93%). Thermal
T matturity of the Ordovician is mostly dryy-gas
prone, fo
or example with
w Ro rangiing from 2.0% to 2.6% i n the Guche
eng-4 well at depths of 3
3,200
to 5,700 m on the ea he Tazhong Uplift, Figurre XX-21.40
ast flank of th
June, 2013 XX
X-34
XX. China EIA/ARI W
Figure XX-21.
X Vitrinitte Reflectancee (Ro) of the Mid
M to Upper O
Ordovician Shaale Sequence in the Guchenng-4
Well, Tarim Basin
B Ranges from <2% at a Depth of 3,2200 m to 2.7% at a Depth of 5,700 m.
Source: Lan et al., 2009.
The
T Cambria
an organic-rrich shales, such as th ulake Formation, consist of
he Xiaoerbu
abyssal to
t bathyal fa
acies mudsto
ones that are
e well develo Manjiaer De
oped in the M epression an
nd the
eastern Tarim
T and Keping
K Upliffts. Cambriian formatio
ons include tthe Qiulitage, Awatage, and
Xiaoerbu
ulake formations. TOC is fairly high
h (1.2% to 3
3.3%) in the
e Lower (C1) and Middle
e (C2)
Cambrian Formation
ns and exc
ceeds 1% over
o about two-thirds o
of the Cam
mbrian seque
ence.
Evaporitic dolomites, potential ca
ap rocks, oc
ccur in the m
middle Camb
brian, with extensive sallt and
e beds totaling 400 to 1,400 m thick
anhydrite k. Net orga
anically-rich shale thickn
ness ranges from
120 m to
o 415 m, ave
eraging abou
ut 120 m (40 mal maturityy is mostly w
00 ft). Therm within the dryy gas
window (R
( o > 2.5%) in deep area
as.
June, 2013 XX
X-35
XX. China EIA/ARI W
The
T organic content of the
t Cambria
an and Ordovician shales in the T
Tarim consissts of
kerogen, vitrinite-like
e macerals, as well as
a bitumen. Regionallly, TOC va
aries widely with
structural location, ranging
r from
m as much as 7% in t he troughs to only 1-2
2% in the uplifts,
reflecting
g the paleo depositional
d l environmen
nt. For exa
ample, Figurre XX-22 illu
ustrates the TOC
distributio
on within the Lower Pa
aleozoic secttion in the M
Milan-1 well, located on
n the flank o
of the
Tadong Uplift
U in the eastern Tarrim Basin.41 Lower Cam
mbrian forma
ations in thiss well have up to
4% TOC
C, while Low
wer Ordovician units ha
ave mostly 2
2% or less TOC, althou
ugh neither is at
prospective depth at this particullar location (5,200-5,700
( 0 m).
Figure XX-22. Stratigraphy and

a TOC Distrribution of Cambrian and
Ordoviccian Shales in the Milan-1 W
Well, Tarim Bassin.
Source: Hu
u et al., 2009.
June, 2013 XX
X-36
XX. China EIA/ARI W
2.2 Reservoir
R Prroperties (P
Prospective Area)
New
N geologic
c informatio
on gathered by ARI sin ce the 2011 study indicates that sshale
formation
ns in the Tarim are cons
siderably de
eeper than p
previously m
mapped. The
e new data show
that a sig
gnificant amo
ount of the Ordovician
O and,
a particula
arly, the Cam
mbrian resource is subje
ect to
the 5-km
m prospectiv
ve depth “h
haircut”. No
ote that ad
dvancementss in shale well drilling
g and
completio
on technolog
gy could add
d back the large resourcce that existts in the 5-6
6 km depth rrange
in this ba
asin.
In
n addition, significant
s nitrogen
n con
ntamination (5-20%) is prevalent in Paleozoicc and
Mesozoic
c reservoirs throughout the Tarim Basin.
B Eleva
ated nitroge
en apparentlyy was cause
ed by
thermal maturation of
o nitrogen-rrich minerals (ammoniu
um clays, evvaporates) iin Cambrian
n and
an sapropelic source ro
Ordovicia ocks. Unforttunately, nitrrogen conce
entration ten
nds to be hig
ghest
on the ve
ery structura or shale gas.42
al uplifts that are most prrospective fo
Another
A pote
ential “geoh
hazard” is karstic colla
apse of Orrdovician sttrata cause
ed by
dissolutio
on of underlying carbonate rocks, which
w locallyy disrupts th
he shale stra
ata and also
o may
introduce
e copious formation
f water
w detrimental to sh
hale gas prroduction. Similar karrsting
negatively affects po
ortions of th
he Barnett Shale
S play, locally sterilizing a sma
all portion o
of the
e there.43 Figure XX-23
resource 3, a seismic time section
n from the n
northern Tarrim Basin, shows
local karrst collapse structures disrupting Ordovician
O sstrata.44 Ka onsidered a geo-
arsting is co
hazard th
hat would ne
eed to be avoided during
g shale deve
elopment.
Within
W 520-mi2 pros
its 6,5 brian organicc-rich shale averages 3
spective area the Camb 380 ft
thick, witth relatively low 2% TO
OC in the dry
y-gas therm
mal maturity window (Ro of 2%). The L.
Ordovicia a ly 19,420 mii2, with abou
an prospectiive area is approximatel ut 300 ft of o
organic-rich sshale
that also is in the dry
y-gas window (Ro of 1.8 n has a 10,930-mi2 shale
8%). The U.. Ordovician e gas
prospective area, witth 390 ft of high-TOC sh
hale in the d
dry-gas wind
dow (Ro of 2
2.0%). A 10
0,450-
mi2 shale
e oil prospec
ctive area allso exists for the U. Ord
dovician, ave
eraging 300 ft of organicc-rich
shale witth Ro of 0.9%. In additio
on, the L. Triassic
T is prrospective fo
or shale gass and oil witthin a
mi2 prospectiive area, ave
15,920-m eraging 400 ft of high-TO
OC shale witth Ro of 0.9%
%.
June, 2013 XX
X-37
XX. China EIA/ARI W
Figure XX-23.
X Seismiic Time Sectio
on from Northeern Tarim Bassin Showing LLocal Karst Coollapse Disruppting
Ordovician Strata.
S Karsting is a Geo-hazard to be Avvoided Duringg Shale Develoopment.
ource: Zeng et al., 2011.

So
2.3 Resource
R As
ssessment
Compared
C wiith our 2011 study, new more comp overage and revised map
plete data co pping
of the Ta
arim Basin in
ndicates thatt Ordovician and Cambrrian shales a
are considerrably deeperr than
previously mapped and the pro
ospective arrea is consiiderably sm
maller. Mostt of the bassin is
considere
ed too deep for comm
mercial shale
e developm ent (>5 km
m), with onlyy portions o
of the
interior uplifts
u raised
d to prospec
ctive depth. The 20% nitrogen co
ontent and karst disrup
ptions
further re
educed shalle gas resou
urces. On the other ha
and, we add
ded newly rrecognized sshale
plays in the mid-upp
per Ordovicia
an and L. Trriassic. We
e now estima
ate that the Tarim Basin
n has
216 Tcf and erable shale gas and oil resources.
a 8 billion barrels of risked, techniically recove
d 6,520-mi2 high-graded
L. Cambrian shale coverrs a reduced d area, with an estimate
ed 44
Tcf of ris
sked, technic
cally recoverable shale gas resourcces out of 17
76 Tcf of rissked shale g
gas in
place. L. Ordovician n its 19,420--mi2 high-gra
n shale within aded area co
ontains an e
estimated 37
77 Tcf
of risked, shale gas in-place, wiith 94 Tcf off risked, tecchnically recoverable ressources. Th
he U.
an shale gas lead conta
Ordovicia ains 265 Tcff of risked sshale gas in
n-place with 61 Tcf of rissked,
technicallly recovera
able shale gas
g resourc
ces. In add 0,450-mi2 sh
dition, a 10 hale oil prosspect
contains an estimate
ed 31 billion
n barrels of risked shalle oil in-placce with 1.6 billion barre
els of
risked, te
hale oil reso
ources.
June, 2013 XX
X-38
XX. China EIA/ARI W
L. Triassic sh
hale has sha ntial within a 15,920-mi2 prospective
ale oil poten e area, estim
mated
at 6.5 biillion barrels
s of risked, technically recoverable
e shale oil rresources o
out of 129 b
billion
barrels of
o risked, sha
ale oil in-plac
ce. In additiion, the L. T riassic could
d hold an esstimated 16 T
Tcf of
risked, te
echnically recoverable associated ga
as resourcess out of 161 Tcf of risked
d gas in-placce.
2.4 Recent
R Activ
vity
No
N shale gas
s or shale oil leasing or drilling
d activi ty has been reported in the Tarim B
Basin.
One pos
sitive indicattion is the wide
w comme
ercial appliccation of horizontal drilling in the T
Tarim
Basin during the pas
st decade, with the techn
nique alreadyy accounting
g for about h
half of the ba
asin’s
onal oil prod
conventio duction.45 This
T advance
ed drilling ca
apability pro
ovides a goo
od foundatio
on for
future shale development in the Tarim Basin
n.
3 JUNGGAR BASIN
3.1 In
Like its large

er neighbor the Tarim Basin,
B 62,000-mi2 JJunggar Ba
the 6 asin is located in
st China’s Xinjiang
northwes X region. Howev
ver, the Jun
nggar is less remote from marketss and
services than the Tarim and offe
ers better inffrastructure. Xinjiang’s ccapital of Urrumqi (population
n) is situate
3 million ed in the south-centra
s al Junggar Basin, whille PetroChina’s moderrn oil
technolog
gy center is
s at Kelama
ayi. Local industry and
d population
n are growin
ng rapidly in
n this
resource
e-rich area. With mostly
y level surfac
ce elevation
n just above 1,000 m, th
he climate iss less
harsh tha
an in the Ta
arim and agrriculture is more
m develop
ped. Figure
e XX-24 sho
ows the strucctural
elements
s of the basin as well as
s locations of
o ARI-propriietary shale data used in conducting
g this
study.
The
T Junggarr Basin is undergoing
u rapid deve
elopment of its rich oill, gas, and coal
resource
es. It produc
ced an averrage 218,00
00 bbl/day o
of oil and 0.5
5 Bcfd of na
atural gas d
during
2011, witth output ex
xpected to ris
se to 400,00
00 bbl/day a
and 1.0 Bcfd
d by 2015. T
The Jungga
ar has
extensive
e and highly
y prospective
e yet comple
etely unteste
ed shale gass and oil deposits in mu
ultiple
formation
ns and geolo
ogic settings
s. ARI’s initia
al data and a
analysis sug
ggest that the Junggar B
Basin,
while not China’s la
argest shale
e resource, actually ma
ay be its be
est overall in
n terms of sshale
geology and reserv
voir potentia
al. Shell and
a Hess re
ecently sign agreements with
ned study a
PetroChina on shale oil projects in outlying areas
a of the Junggar Basin.
June, 2013 XX
X-39
XX. China EIA/ARI W
Figu
ure XX-24. Strructural Elemeents Map of thhe Junggar Baasin Showing
ARI-Proprieetary Shale Gaas Data Locattions and Locaation of Shalee-Prospective Areas.
Source: ARI,
A 2013.
The
T Junggar Basin is an asymmetric
c cratonic ba
asin with a th
hrusted soutthern margin
n and
mostly gently
g dippin
ng north, west
w and ea
ast margins.. The bassin contains up to 9 kkm of
Carbonife
erous and younger strata, Figure
e XX-25. Four main source roccks are pre
esent:
46
Carbonife
erous, Perm
mian, Triassic
c, and Juras
ssic. Of the
ese, the Perrmian is con
nsidered the most
important due to its very
v high TO
OC and good
d genetic po tential, follow
wed distantly by the Tria
assic.
The Junggar is a thermally
t im
mmature bas
sin with ab
bnormally low
w heat flow
w. Gas window
d only in the North Tiansshan forelan
maturities (Ro > 1%) are attained nd region at d
depths of grreater
out 5 km.47
than abo
June, 2013 XX
X-40
XX. China EIA/ARI W
Figure XX-255. Stratigraphyy of the Jungggar Basin, Higghlighting

Prospeective Permiann and Jurassicc Source Rockks.
JUNGGAR BASIN
N
ERA PERIOD EPOCH FORMATION AGE (Ma) THICKNESS (m)
Y
QUATERNARY Q Xiyu 0 - 2.6 350 - 20466
CENOZOIC Dushanzi 2.6 - 5.3 207 - 19966
N Taxihei 100 - 3200
5.3 - 23.3
TERTIARY Shawan 150 - 5000
Anjihaihe 23.3 - 32 44 - 800
E
Ziniquanzi 32 - 65 15 - 855
K2 Donggou 65 - 96 46 - 813
CRETACEOUS
S
K1 Tugulu 96 - 145.6 84 - 964
Kalaza 50 - 800
J3 145.6 - 157.11
Qigu 144 - 6833
MESOZOIC
Toutunhe 200 - 6455

JURASSIC J2 157.1 - 178
Xishanyao 137 - 9800
Sangonghe 148 - 882
J1 178 - 208
Badaowan 5
100 - 625
T3 Baijiantan 208 - 227 123 - 457
7
TRIASSIC T2 Kelamay 227 - 241 250 - 450
0
T1 Balkouquan 241 - 245 30 - 269
P3 U
Upper Wuerhe 245 - 257
830 - 1850
0
Lo
ower Wuerhe
e
P2 257 - 270
PALEOZOIC
PERMIAN Xiazijie 850 - 1160

0
Fengchen 430 - 1700
0
P1 270 - 290
Jiamuhe 1800 - 400
00
C2 Talieguia 290 - 320
C
CARBONIFEROU
US
C1 Baogutu 320 - 354
DEVONIAN 354
Source Rock
k Conventionall Reservoir
Source: ARI, 2013.
Lower Carbo etroleum source rocks are up to 1,300 ft thiick, while U

oniferous pe Upper
Carbonife
erous sourc ach up to 1,000 ft thickk.
ce rocks rea bed as dark grey
These are describ
mudstone of marine character, with TOC of 0.5% to 2..4% (Type II, III). The Carbonifero
ous is
oo deep (> 5 km) but shoals to less than 3 km
mostly to m depth in u
uplifted portio
ons of the b
basin.
The Jura
assic is a coa
al-bearing, non-marine
n unit
u that is ri ch in clay, p
probably ducctile, and thu
us not
suitable for
f shale-typ
pe hydraulic stimulation.. Both Jurasssic and Ca
arboniferous units have lower
and more
e variable TO
OC, mainly Type
T III, and
d are conside
ered poor qu
uality source
e rocks.
The
T dominan
nt Permian source
s rocks were dep osited prima
arily in lacustrine and ffluvial
environm
ments and have
h exceptionally high TOC of up
p to 20% (T
Type I/II kerrogen, not ccoal),
making them one of the world’s richest.48 The
T Permian
n is considered liquids-rrich (Ro= 0.7
7% to
June, 2013 XX
X-41
XX. China EIA/ARI W
1.0%) at target depth

hs of 2-5 km
m. Although Permian so
ource rocks are too dee
ep for comme
ercial
ment in the troughs, they
developm y do shoal to
o prospectivve depth of le
ess than 4 kkm along som
me of
basin flan
nks and inte
erior uplifts.
The
T single most importan
nt source roc
ck is the Mid
d-Permian P Formation (known
Pingdiquan F
as Lucao
ogou in the
e south), a lacustrine to
o deltaic de
eposit up to
o 1,200 m tthick presen
nt. It
consists of grey to black
b mudsto
ones, oil sha
ales and do
olomitic mudstones interrbedded with
h thin
sandy mudstones, shaly
s siltston
nes, siltstone
es and fine sandstoness. Hydrocarrbon source
e rock
s in the Ping
thickness gdiquan ran
nges from 50
0 m to a re markable 65
50 m. Figu
ure XX-26 shows
detailed stratigraphy and TOC profiles
p for tw
wo outcrop ssections in th
he Permian Lucaogou F
Fm of
the soutthern Jungg
gar Basin. Approxima
ately 300 to
o 700 m off organic-ricch but therrmally
immature
e lacustrine mudstone is
s present, with
w TOC ave
eraging 5% and reachin
ng a maximu
um of
20%.49
Triassic
T sedim
ments are more
m widely distributed across the eastern Jun
nggar Basin than
the Perm
mian, with th
he depocenter at the fro
ont of the Tiianshan mountains. Th
he Mid- to U
Upper
Triassic Xiaoquango
ou Group (including Ka
aramay, Hua
angshanjie, and Haojiia
agou formattions)
contains up to 250 m of dark mudstones
s and thin ccoals depossited under fluvial-lacusstrine
condition
ns.
Conventional
C oil deposits
s in the eas gar sourced by these units occur in the
stern Jungg
Fukang, North Dong
gdaohaizi, Wucaiwan,
W an
nd Jimursarr structural d
depressions (“sags”). T
These
deposits include the Cainan, Wucaiwan, Hu
uoshaoshan
n, Shanan, B
Beisantai, Sa
antai and G
Ganhe
oilfields which
w produ
uce from co
onventional reservoirs
r o
of Carboniferous, Permiian, Triassicc and
Jurassic age.
The
T Junggarr Basin is characterize
ed by muc h simpler sstructural geology than
n the
tectonica
ally more complex shale
e basins of southern
s Ch
hina. While some edge
es of the Jun
nggar
Basin ca
an be structu
urally complex, particula
arly along itss thrusted ssouthern ma
argin, most o
of the
basin inte
erior has gentle dip angle and relatively few fau
ults. Such siimple structu
ure is consid
dered
favorable
e for shale gas/oil develo
opment.
June, 2013 XX
X-42
XX. China EIA/ARI W
Figure XX-26.
X Detaileed Stratigraph
hy and TOC Prrofiles for Twoo Outcrop Secctions in the P
Permian Lucaoogou
Fm, Southern
S Junggar Basin. Approximately
A y 300 to 700 m of Organic-riich but Thermmally Immaturee
Lacusstrine Mudston ne is Present, with TOC Aveeraging 4% (MMaximum 20% %).
Source: Carroll
C and Wartes,
W 2003.
orth-south structural crosss-section across

For example, Figure XX--27 shows a regional no
the entirre Junggar Basin, illustrating the relatively siimple interio
or structure
e as well ass the
sted southerrn margin.50 Note that Permian an
overthrus nd Jurassic source rockks are quite thick
but too deep
d (>5 km) in most of the central basin trough
h. These un
nits become
e shallower tto the
north butt also thin ou
ut on structural uplifts.
June, 2013 XX
X-43
XX. China EIA/ARI W
In
n particular, on the north
hwest flank of the Junggar Basin, P
Permian thro
ough Cretacceous
strata dip
p quite gentlly (1° southe
east) toward
ds the centra
al trough, Fig 9.51,52
gures XX-28 and XX-29
Again, fa
aults here arre relatively few on the basin interio
or side of th
he section b
but become more
prevalent along the shallow
s wes
stern basin margin.
m Thiss gently dipp
ping northwe
est margin o
of the
Junggar Basin hosts
s a highly pro
ospective sh
hale gas/oil lead. This p
part of the JJunggar acco
ounts
for over 40%
4 of the basin’s
b conventional oil reserves
r and
d has good e
existing infra
astructure.
Figure XX-27. Regio onal North-sou uth Structural Cross-sectio n Across the JJunggar Basin. The Basin hhas
Relativeely Simple Strructure, Apart from its Overrthrusted Soutthern Margin. Permian and Jurassic Souurce
Rocks arre Very Thick but
b Too Deep (>5 km) in thee Central Basiin Trough. Thhese Units Beccome Shallow wer to
the No orth but Thin Out on Structtural Uplifts. V
Vertical Exagggeration is 3.7xx.
Source: Qiu
Q et al., 2008.
Figuree XX-28. Detaailed Structuraal Cross-sectio

on Trending NNorthwest-souutheast Acrosss the Northweest
Margin of
o the Junggarr Basin, Based d on Seismic and Well Dataa. Permian (P), Triassic (T),, Jurassic (J), and
Cretaceouus (K) Strata Dip
D Gently into o Basin. Faultts are Few in tthe Basin Inteerior but Becoome More Prevvalent
Along the
t Basin Marg gin. No verticcal exaggeration.
Source: Zhu
Z et al., 2010.
June, 2013 XX
X-44
XX. China EIA/ARI W
Figure XX-29.
X Structuural Cross-secction Trendingg Northwest-sooutheast Acrooss the Northw west Margin oof the
Junggar Basin,
B Showin ng Convention nal Oil Fields. Permian (P), Triassic (T), JJurassic (J), aand Cretaceouus (K)
Strata Dip Gently into the Basin. Faaults are Few in
i the Basin Innterior but Become More Prrevalent Alongg the
Bassin Margin. Vertical exaggeeration is 6x.
Sourc
ce: Jin et al., 2008.
2
The
T southeastern Jungg
gar Basin also
a has rela
atively simp
ple structure
e. Permian
n and
Jurassic source rock shales are
e thick but too deep (> ern basinal axis.
>5 km) near the southe
hales shoal but also thiin onto the intra-basin high to the north, Figure XX-30. Even
These sh
near intrra-basinal uplifts
u structture is relattively simple
e. Figure XX-31 sho
ows conventtional
sandston
ne reservoirs
s in the Cainan oil field
d, central Ju
unggar Basiin, sourced by Permian
n and
Jurassic shales whic
ch may be prospective for shale d
development further to the south in the
deep Fuk h.53
kang Trough
Reservoir
R essure often is abnorma
pre ally elevated in the Junggar Basin. For example
e, the
Huo-10 well,
w located
d on an antic
cline in the southern Ju
unggar, teste
ed pressuress of 50% to over
100% ab static levels in Eocene and Cretacceous forma
bove hydros ations at de
epths of 2,00
00 to
3,500 m, Figure XX--32.54 Such overpressuring generallly is favorab
ble for shale
e developme
ent as
it could increase
i sha
ale gas storrage and de
eliverability. As one author noted, referring he
ere to
conventio
onal objectiv
ves: “The Triassic
T and
d Permian o
overpressure
ed bodies sshould hencce be
considere
red as an imp
portant obje ure [conventtional] natura
ective for futu ral gas explo
oration becau
use it
is not currently feasiible to penettrate into the
e overpressu
ured bodies because off their deep b
burial
angji depresssion.”55
depth in the study arrea, especiallly in the Cha
June, 2013 XX
X-45
XX. China EIA/ARI W
Figure XX-30. South

h-north Orientted Structurall Cross-sectioon Across the Southeasternn Junggar Bassin.
Vertical exaggeration
e 33.5x.
Source: Chen
C et al., 20
003.
Figure XX-31. Southh-north orienteed structural cross-section

c across the Caainan oil field, central Jungggar
Basin. The conventioonal sandston
ne reservoirs here
h were souurced by Perm mian and Jurasssic shales in the
Fukang Trough
T to the south, where they may be prospective foor shale development. Verrtical exaggeraation
10x.
Source: Chen
C et al., 20
003.
June, 2013 XX
X-46
XX. China EIA/ARI W
Figu
ure XX-32. Ovver-Pressuring
g in Eocene annd Cretaceouss Formations
at th
he Huo-10 Well, Southern Juunggar Basin..
Sourrce: Pa et al., 2009.
3.2 Reservoir
R Prroperties (P
Prospective Area)
Permian
P lacu
ustrine muds
stones and shales
s in the
e Junggar B
Basin cover a net prospe
ective
area of approximate m 2, based on
ely 7,400 mi o depth an
nd thermal m
maturity ma
apping. The
e net
organic-rrich portion of the Ping
gdiquan/Luca
aogou forma
ations avera
ages about 820 ft thickk and
11,500 ftt deep, with average
a 5%
% TOC that is window (Ro off 0.85%).
s in the oil w
Triassic
T lacus
strine mudsttones and sh
hales cover a net prosp
pective area of approxim
mately
8,600 mii2, based on
n depth and thermal ma
aturity mapp ing. The ne
et organic-rich portion o
of the
Triassic formations averages
a ab
bout 820 ft thick and 1 0,000 ft dee
ep, with ave
erage 4.0% TOC
he oil windo
also in th ow (Ro of 0.85%). No mineralogica
m al data are available for the Permia
an or
Triassic shales.
s
June, 2013 XX
X-47
XX. China EIA/ARI W
3.3 Resource
R As
ssessment
Highly
H prosp
pective Perm
mian lacustrine mudston
nes and shalles in the Ju
unggar Basin are
estimated
d to have 5.4 billion barrrels of risked
d, technicallly recoverab
ble shale oil resources, o
out of
109 billio
on barrels off risked oil in
n-place. In addition,
a the
ere could be
e 17 Tcf of riisked, techn
nically
as resources
s associated
d with the Pe
ermian shale
e oil depositts, out of 17
72 Tcf
of risked shale gas in-place. Wh
hile not Chin
na’s largest shale resou
urce base, th
he Junggar B
Basin
Permian shales are considered
c particularly
p attractive
a ba
ased on theirr favorable tthickness, so
ource
hness, overr-pressuring, and simp
rock rich ple structura
al setting. However, their lacusstrine
depositio
onal setting is complete
ely unlike th
he marine-d
deposited No
orth Americcan shales. The
Junggar Basin shale
e appears clloser to the REM seque
ence in Ausstralia’s Cooper Basin, w
which
has had promising ex
xploration te
esting for sha
ale but is no
ot yet fully co
ommercial.
Triassic
T lacus
strine mudstones and shales
s in the
e Junggar B an estimated 6.7
Basin have a
billion ba
arrels of risked, technica
ally recovera
able shale o il resources, out of 134
4 billion barre
els of
risked sh
hale oil in-pllace. In addition, there
e could be 1
19 Tcf of rissked, techniccally recove
erable
shale ga
as resources
s associated
d with the Triassic
T shal e oil depossits, out of 1
187 Tcf of rrisked
shale gas in-place. The
T Triassic is considere
ed less prosspective due
e to lower TO
OC, althoug
gh the
simple sttructural settting and ove
er-pressuring
g are favorab
ble.
3.4 Recent
R Activ
vity
n April 2012 Shell and Hess

In H signed oChina’s Turpan-
d joint studyy agreementts with Petro
Hami un
nit to evalua
ate shale oil in the Santanghu Ba
asin, an outtlying portion
n of the ea
astern
Junggar Basin. PetroChina reported they had previo
ously drilled 35 wells in
n this basin
n with
actory results
unsatisfa s.
Hong
H based Envirro Energy’s TerraWest Energy sub
Kong-b bsidiary ope
erates a coa
albed
methane production sharing con
ntract with pa
artner Petro e 655-km2 Liiuhuanggou PSC
oChina. The
is located
d just west of
o Urumqi in
n the southern Junggar Basin. In ad
ddition to the CBM pote
ential,
Enviro Energy
E has reported on
n the shale potential o
of the blockk. The 300
0-m thick (g
gross)
Jurassic Badaowan Formation contains
c coa
aly carbonacceous mudsttone that wa
as deposited
d in a
non-mariine environm
ment. Third
d-party engiineering con
nsultancy N
NSAI estimatted the unrrisked
prospective resource
es within the
e carbonace
eous shale o
of the Jurasssic Badaow
wan Formation of
C to be 1.512
this PSC 2 Tcf (best estimate), res
stricted to a maximum d 00 m.56 No sshale
depth of 1,50
test wells
s have been drilled on th
his property.
June, 2013 XX
X-48
XX. China EIA/ARI W
4 SONGLIAO
S BASIN
4.1 In
The
T Songliao
o Basin in no
ortheast China is an im
mportant petrroleum producing region
n that
a oil potential. The 108,000-mi2 basin hostss China’s larrgest oil field
also has shale gas and d, the
Daqing complex,
c cu
urrently prod
ducing abou
ut 800,000 b
bbl/day. Only in recen
nt years hass the
natural gas
g potential of the Son
ngliao becom
me recognizzed, with ne
ew gas disco
overies in m
mainly
shallow (<1.5
( km) Cretaceous
C sandstone
s and volcanic reservoirs. The therma
al maturity o
of the
Songliao
o Basin is re
elatively low and much of
o the conve
entional natu
ural gas is b
believed to be of
biogenic origin.57 Fig
gure XX-33 shows the structural el ements of th
he basin as well as loca
ations
of ARI-prroprietary da
ata used in conducting
c th
his study.
Fig
gure XX-33. Prospective
P Shale Oil Area for the Cretacceous in the
Songliao Basin,
B Showing
g ARI-Propriettary Data Loccations.
Source:
S ARI, 2013.
2
June, 2013 XX
X-49
XX. China EIA/ARI W
Sedimentary
S rocks in the
e Songliao Basin
B are prrimarily Cretaceous non
n-marine dep
posits
along with minor Up hick.58
pper Jurassiic, Tertiary and Quater nary strata, totaling up to 7 km th
These sttrata rest unconformably
y on Precam
mbrian to Palleozoic meta
amorphic an
nd igneous rrocks.
The main
n source rocks are Low
wer Cretace
eous organicc-rich shaless which form
med in lacusstrine
settings, reflecting regional la
ake anoxic events, bu
ut they are
e unevenly distributed and
concentrrated in discrrete sub-bas
sins.
Figure XX-34 shows that the L. Cretaceous S aojia -- and in particula

Shahezi, Ya ar the
nkou (Late Cenomanian
Qingshan C n) and Nenjiang formatio
ons -- are th
he principal source rockks (as
well as important
i re
eservoirs the
emselves). Deposited under deep
pwater lacusstrine condittions,
these un o black mudstone and shale interb
nits consist of bedded with
h gray siltsto
one. Silicicclastic
rocks of alluvial
a and fluvial origin
n overlie the lacustrine sh
hale sequen
nces.
Figure XX-34. Stratigraphy of thee Songliao Bassin,

High
hlighting Poteentially Prospeective Lower C
Cretaceous Soource Rocks.
Source: ARI, 2013.

2
The
T Nenjiang
g Fm ranges
s from 70 to 240 m thick , while the Q
Qingshankou
u Fm is 80 to
o 420
m thick (both gross).. Burial dep
pth ranges fro
om 300 to 2
2,500 m. Sh
hales and mudstones co
ontain
mainly clay
c minerals with som
me siltstone. TOC rang
ges from 1% to 5% ((maximum 1
13%),
June, 2013 XX
X-50
XX. China EIA/ARI W
primarily Type I-II ke

erogen (in th
he Qingshan
nkou) and Tyypes II-III (N
Nenjiang). T
The Qingsha
ankou
ally within th
is therma he oil to wet gas window
ws (0.7% to 1.5% Ro), w
while the you
unger Nenjia
ang is
in the oil window (ma
aximum 0.9%
% Ro).
These
T Cretac ce rocks are believed to
ceous sourc o have expulsed only so
ome 20% off their
ation capacity.
hydrocarrbon genera Freque
ently over-p and naturallly fractured, the
pressured a
Nenjiang
g and Qingsh
hankou shalles exhibit strong gas sh
hows and trravel time de
elays on aco
oustic
logs. Pe
etroChina considers the
e Songliao Basin to be
e prospectivve for shale exploration
n and
reported that comme
ercial oil prod
duction alrea urred from sshale there.559
ady has occu
The
T Songliao
o Basin com
mprises six main structtural elements: the cen
ntral depresssion,
north plu
unging zone
e, west slope
e zone, norrtheast upliftt, southeastt uplift, and southwest uplift.
Four disttinct tectonic
c phases oc
ccurred in th
he basin: pre and compression
e-rift, syn-rifft, post-rift, a
phases. Prospectiv
ve L. Cretac
ceous units are restrictted to nume
erous small isolated syyn-rift
basins, usually
u half--grabens tre
ending NE-S
SW that rang 0 to 800 mi2 in size.60 This
ge from 300
reduces the shale prrospective area
a and also requires a
an understan
nding of eacch individual sub-
basin’s subsidence
s history.
h
5, a regionall NW-SE trending structtural cross-section, show

Figure XX-35 ws the altern
nating
uplifts an ons within the Songliao
nd depressio o basin. De
eformation iss milder here than in S
South
China bu
ut still signifficant with major
m norma
al faults. O
Organic-rich L. Cretaceo
ous Qingsha
ankou
Formatio
on (K2qn), th
he most prospective sha
ale oil targe
et, ranges frrom 200-400
0 m thick an
nd 0-
s the basin.61
2,500 m deep across 6
Elevated
E lev
vels of carb mon within Cretaceous sandstone and
bon dioxide are comm
volcanic reservoirs in
n the Songliao Basin. About one d
dozen high-concentratio
on (70-99%)) CO2
gas fields
s have been
n discovered
d to date, tottaling 6.5 Bccf of proved reserves. Isotopes ind
dicate
the CO2 is mainly magmatic
m in origin, emp
placed betw
ween 72 and
d 48 Ma alo
ong deep-se
eated
p faults.62 For
strike-slip F example
e, Figure XX
X-36 shows seismic crosss-sections in the Chan
ngling
Depressiion of the So
ongliao, whe
ere northeas
st-trending sstrike-slip fau
ults are asso
ociated with CO2.
Carbon dioxide
d conta
amination is
s a potential risk for shalle gas explo
oration in the
e Songliao B
Basin,
much les
ss so for shale
s oil tarrgets, althou
ugh it is m grated into high-
more likely tto have mig
permeab
bility sandsto
ones than intto low-perme
eability shale
es.
June, 2013 XX
X-51
XX. China EIA/ARI W
Figuree XX-35. Regional NW-SE Structural

S Cross-section of Songliao Bassin. Organic-rrich Cretaceouus
Qin
ngshankou Fo ormation (K2q
qn) is about 2000-400 m thickk and 0-2,500 m Deep Acrosss the basin.
Source: Wu
W et al., 2009
9.
X-36. Seismicc cross sections in Changlin

Figure XX ng Depressionn of Songliao Basin, showing deep northheast-
trending strikke-slip faults associated
a with CO2 contam
mination (scalle, location noot noted).
Source: Luo
L et al., 2011.
June, 2013 XX
X-52
XX. China EIA/ARI W
4.2 Reservoir
R Prroperties (P
Prospective Area)
Lower Cretac
ceous lacusttrine mudsto
ones in the Songliao Ba
asin cover a net prospe
ective
area of approximate m 2, based on
ely 6,900 mi o depth an
nd thermal m
maturity ma
apping. The
e net
organic-rrich portion of
o the Qings
shankou mud
dstones tota
al about 1,00
00 ft thick an
nd average 5
5,500
ft deep, with
w 4.0% TO
OC that is in
n the volatile oil window (average 0.9
9% Ro). Carbon dioxide
e was
assumed
d to be abou hale reservoirs. Natural fractures have been re
ut 10% in sh eported in ce
ertain
t basin but have not been quantified.
parts of the
4.3 Resource
R As
ssessment
The
T Lower Cretaceous
C lacustrine mudstones
m and shales in the Son
ngliao Basin
n are
estimated
d to hold ap
pproximately
y 229 billion barrels of rrisked shale
e oil in-place
e with 11.5 b
billion
barrels of
o risked, te
echnically re
ecoverable shale
s oil ressources. N
Note that the
ese depositss are
located in
n isolated ha
alf-graben rift basins and may be di fficult to extract due to tthe high-clayy and
likely ductile nature
e of the roc
ck. In addition, there may be 16 Tcf of rissked, techn
nically
as resources
s associated
d with the sh
hale oil depo
osits, out of about 155 T
Tcf of
risked sh
hale gas in-p
place.
The
T Songliao
o Basin lack
ks a suitable
e commercia
al North Am
merican shale
e analog, ass it is
structurally complex and of lacustrine sedim
mentary orig in. The Eoccene Green River Form
mation
of Wyom
ming, which formed
f in an
n inter-monta
ane lake settting, is a po og albeit of lower
ossible analo
thermal maturity
m and less faulted
d.
4.4 Recent
R Activ
vity
During
D 2010 Hess and PetroChina
P reportedly cconducted a joint study of shale/tig
ght oil
potential at giant Daqing oil field
d in the Song
gliao Basin a
and also disscussed exp
panding the sstudy
area. Ho
owever, Hes
ss’ last updatte on this pro
oject came o
on January 2
26, 2011.
Separately,
S the Jilin Oilffield Company has drille
ed and masssively fractu
ured at leasst ten
deep horrizontal wells in a tight sandstone gas
g reservoiir at Changling gas field
d in the southern
Songliao
o Basin. Th
hese wells targeted
t the
e low-perme glouku tightt sandstone at a
eability Deng
depth of about 3,600
0 m, but the
e technology
y also could
d be applied
d to tight/sha
ale oil reservvoirs.
n wells typic
The Jilin cally drilled 1,200-m ho
orizontal late
erals that we
ere stimulatted in 11 sttages
isolated using sliding
g sleeves. However, th
he frac fluid
d used was heavy guarr gel, ratherr than
er, and propp
slickwate pant was res n wells were reportedly ssuccessful.633
sin-coated sand. All ten
June, 2013 XX
X-53
XX. China EIA/ARI W
5 OTHER
O BAS
SINS
Several
S other sedimenta
ary basins in
n China eith
her do not a
appear to b
be prospectivve or
have sha
ale potential that could not
n be quanttified due to
o insufficient geologic da
ata. The Turpan-
Hami Ba
asin, east of
o the largerr Junggar, has equivallent Permian organic-riich shale th
hat is
lacustrine
e in origin, oil- to wett gas-prone
e, and appe
ears prospe
ective. The
e Qaidam B
Basin,
southeas
st of the Tariim, comprise
es isolated fa
ault-bounde
ed depressio
ons containin
ng Upper Triassic
mudstone source roc
cks with high
h TOC; these are very deep.
e appear oil prone but a
The
T Ordos Basin
B has sim
mple structu
ure but the T
Triassic sha
ales have low
w TOC and very
high clay
y content (4
40-60%). It is not clearr whether a recently drrilled shale ttest well acctually
produced
d gas from the shale formation
f orr rather from
m adjacent tight sandsstones which
h are
commerc
cially produc Basin.64 The
ctive on a larrge scale in the Ordos B e Carbonifero
ous and Perrmian
mudstones in the Orrdos are coa
aly and appe
ear ductile. F
Finally, eastt-central China’s North C
China
Basin (Huabei) is a conventiona
al oil and gas producing region thatt contains Carboniferouss and
k shales tha
Permian source rock at are stratig
graphically a
and lithologically similar to those in the
asin and nott considered
Ordos Ba d prospective
e. No shale
e drilling hass been reporrted in these
e less
prospective areas.
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June, 2013 XX
X-58
XXI. Mongoolia EIA/ARI W
XXI. MONGO
OLIA
SUMMA
ARY
Mongolia
M has
s limited bu
ut locally sig
gnificant sha
ale gas and
d oil potentia
al located in
n the
eastern and southea
astern portio
ons of the country, Fig
gure XXI-1. The narrow
w and elong
gated
Tamtsag and East Gobi
G rift bas
sins - - which resemble
e the oil-pro
oductive bassins of north
heast
China -- contain lac
custrine mudstone and coaly sourrce rocks w
within the Lo
ower Cretacceous
Tsagaantsav and equivalent form
mations.
Figuree XXI-1. Sedimentary Basi ns of Mongolia
Souurce: ARI, 2013
June, 2013 XX
XI-1
Risked,
R techn
nically recov
verable reso
ources are e
estimated att 4 Tcf of sh
hale gas and 3.4
billion ba
arrels of shalle oil out of 55
5 Tcf and 85
8 billion barrrels of riske
ed shale gass and shale o
oil in-
place, Ta
ables XXI-1 and
a XXI-2.
Tablee XXI-1. Shalee Gas Resourcces and Geoloogic Propertiees of Mongoliaa.

East Gobi
G T
Tamtsag
Baasin/Gross Area
Basic Data
2 2
(24,5600 mi ) (66,730 mi )
Shale Formation Tsagaaantsav Tsaagaantsav
Geologic Age L. Cretaceous L. Cretaceous
C
Depossitional Environmeent Lacustrine Lacustrine
2
Prospectiive Area (mi ) 4,6990 5,440
Physical Extent
Organicallyy Rich 6000 500

Thickness (ft)
Net 3000 250
Interval 6,000 - 10,000
1 5,0000 - 9,000
Depth (ft)
Average 8,0000 7,000
Reservoirr Pressure Norm
mal Normal
Properties
Reservoir
Average TOC
T (wt. %) 4.0%% 3.0%
Thermal Maturity
M (% Ro) 0.800% 0.80%
Clay Conttent Mediium M
Medium
Gas Phasse Assoc. Gas Asssoc. Gas
Resource
2
GIP Conccentration (Bcf/mi ) 31.3 23.6
Risked GIP (Tcf) 29.3 25.7
Risked Reecoverable (Tcf) 2.33 2.1
Table XXI-2. Shalee Oil Resourcces and Geolo gic Propertiess of Mongolia..
Eastt Gobi T
Tamtsag
Basin/Gross Areaa
Basic Data
2 2
(24,5660 mi ) (6,,730 mi )
Shale Formationn Tsagaaantsav Tsaagaantsav
Geologic Age L. Crettaceous L. Cretaceous
C
Depo
ositional Environment Lacuustrine Laacustrine
2
Prospecctive Area (mi ) 4,690 5,440
Physical Extent
Organicaally Rich 6
600 500
Thickneess (ft)
Net 3
300 250
Interval 6,000 - 10,000 5,000 - 9,000
Depth (fft)
Average 8,000 7,000
Reservo
oir Pressure No rmal N
Normal
Properties
Reservoir
Averagee TOC (wt. %) 4..0% 3.0%

Thermaal Maturity (% Ro)) 0.880% 0.80%
Clay Co
ontent Me dium M
Medium
Oil Phaase O
Oil Oil
Resource
2
OIP Concentration (MMb
bbl/mi ) 45.5 39.3
Risked OIP (B bbl) 4
43 43
Risked Recoverable (B bbl)
b 1
1.7 1.7
June, 2013 XX
XI-2
The
T organic-rich shales of Mongolia
a are therm
mally immatu
ure near the
e surface, lo
ocally
forming combustible
c e oil shale, but
b reach oiil maturity (m
maximum Ro of 0.8 to 1.0%) in de
eeper
areas ran
nging from 7,000
7 to 8,00
00 ft. However, these trroughs are rrelatively sm
mall and disru
upted
by extens
sive faulting.
In
n addition, northweste
ern Mongolia has ma
arine-depositted organicc-rich shale
es of
Devonian
n age that more
m closely resemble North
N Americca commerccial shale lith
hology. Spo
oradic
oil seeps
s have been reported in this remote region but no sign
nificant oil ffields have been
discovere
ed. Data on this Devonian shale deposit
d are extremely limited. Mosst other are
eas in
Mongolia
a are covered by non-pro asement tha t lacks sedim
ospective ba mentary stra
ata.
Mongolia
M has
s an establis
shed conven
ntional oil an
nd gas invesstment regim
me with rela
atively
low royalty (12.5%) and corpora
ate income tax (25%). Nearly all o
of the counttry’s sedime
entary
eased for co
basins have been le onventional petroleum e
exploration. Regulation
ns governing
g the
ment of deep
developm p shale oil/g
gas resource
es have not yet been prromulgated in Mongolia
a. No
shale leasing or ex
xploration drilling
d activ
vity has occcurred, alth
hough Petro
o Matad Lttd. is
evaluatin
ng the Khoid Ulaan Bulag oil shale deposit.
d
INTROD
DUCTION
With
W a popula out 3 million people, Mon
ation of abo ngolia has tthe world’s lowest population
density – only 1.8 in p km2 or about
nhabitants per a half th
hat of Cana
ada. Mining
g developme
ent is
helping to boost Mon
ngolia’s GDP
P by an expected 25% p
per annum o
over the com
ming decade
e and
per-capitta GDP is ex
xpected to re
each $10,00
00 by 2020, up three-folld from the ccurrent level. Oil
consump
ption is rising
g rapidly as the
t country develops
d ble mineral and coal deposits,
itss considerab
including
g what soon may be the world’s large mine at Oyu Tolgoi.
est copper m
Most
M of Mong
golia is cove
ered by igne metamorphic rocks but tthere are se
eous and m everal
relatively
y shallow and sparsely drilled
d sedim
mentary basin
ns, Figure X
XXI-1. Oil prroduction is small
at about 5,000 bbl/da
ay, limited to
o two oil fields in the Ea
ast Gobi Bassin in southe
eastern Mon
ngolia
e border witth China.
near the Mongolia
M ha
as no comm
mercial natu
ural gas pro
oduction norr gas
pipeline infrastructurre. Petroleu
um drilling se
ervices are a
available loccally in the East Gobi B
Basin,
while add
ditional capa
ability may be sourced out
o of oil field
ds in northea
ast China.
Three
T of Mon
ngolia’s sed
dimentary ba
asins may h
have limited shale oil potential, butt only
two basin
ns could be quantitative
ely evaluated
d; geologic data are sp
parse. The m
most prospe
ective
June, 2013 XX
XI-3
areas forr both conve

entional and
d shale oil exploration
e a
are the Eastt Gobi and Tamtsag ba
asins.
These ba
asins are relatively small and somewhat comple
ex structurally; only the East Gobi B
Basin
has small commercia
al oil producttion.
n addition, th
In here is a no
on-productive
e and poorlyy defined De
evonian dep
posit in north
hwest
Mongolia
a close to th
he border with
w Russia that
t may ha
ave conventiional and sh
hale oil pote
ential,
although public data
a there are lacking. Th
hese include
e Riphean–Cambrian ccarbonates w
which
formed on
o platforms
s of the Sib
berian passiv
ve margin, predating a
assembly of the presen
nt-day
Mongolia
an basemen
nt. Devonian shale also
o is presentt here and oil seeps have been n
noted.
Carbonife
erous–Perm
mian coal and
a coaly mudstone samples im
mmediately postdate tthese
Paleozoic collisions and represe
ent the begin
nning of non
n-marine de
eposition in ccentral Mong
golia.
portedly is lo
TOC rep ow (0.58% to
o 1.68%) an 9 to 441).1 Moreover, tthese
nd oil prone (Tmax of 429
source ro mote, poorly understood,, and appea r to have little shale oil p
ocks are rem potential.
1. EAST
E GOBII BASIN
1.1 In
ntroduction
The mi2 East Gob

T 25,000-m bi Basin is lo
ocated in so
outheastern Mongolia clo
ose to the border
with Chin
na, accessib
ble along th
he main highway betwe pitol Ulan Bataar and n
een the cap north-
central China.
C Mongolia’s only significant commercial
c oil-producin
ng region, th
he basin is a
along
strike witth and simillar to oil-pro
oductive Me
esozoic rift b
basins in no
ortheast Chiina, where m
much
more ge
eologic data
a are availa
able. The East Gobi Basin sharres similar stratigraphyy and
structural geology with these adjoining basin
ns in northwe
est China.
The
T East Go
obi Basin co
omprises a number of discontinuou unded rift basins
us, fault-bou
containin
ng Jurassic to
t Early Crettaceous fluv ents, Figure XXI-2. The thick
vial to lacusttrine sedime
Lower Crretaceous shales that occur in the East
E Gobi B asin frequen gh TOC but were
ntly have hig
deposited
d under lacustrine cond
ditions. The
ermal maturrity of the shale is imm
mature at sh
hallow
depths, becoming
b oill prone in the ghs that sou rced the sha
e deep troug allow conven
ntional oil fie
elds.
June, 2013 XX
XI-4
Fiigure XXI-2. Stratigraphy

S of
o Shale Sourcce Rocks and Conventional Reservoirs inn Mongolia
Source: ARI,, 2013
The
T East Gob
bi Basin con
ntains four main
m sub-bassins within a 200- by 40
00-mi area th
hat is
defined broadly by gravity and ata.2
d seismic da The ssub-basins contain disccontinuous deep
depressio
ons, separa
ated by base
ement highs that are exxposed overr much of th
he region. D
Deep,
fault-bounded trough
hs with good
d quality sou
urce rock mu
udstones can occur. Ho
owever, the deep
areas (>6,000 ft) co
over only a relatively small area. The largesst sub-basin
ns are the U
Unegt
2 2
(3,090 mi
m ) and Zuunbayan (1,6
600 mi ), Fig
gure XXI-3. Uplifted fau
ult blocks occcur within tthese
troughs, some formin
ng conventio
onal oil traps
s.
June, 2013 XX
XI-5
Figuree XXI-3: Seismic Line Acro

oss the Zuunb bayan and Uneegt Sub-basinns within the E
East Gobi Basin
Showing theeir Relatively Small
S Size andd Complex Sttructure.
Source: Manas Petroleum Corp.,

C 2012
Conventional
C reservoirs in the East Gobi Basin
n currently p
produce abo
out 5,000 bb
bl/day
from two clinal oil fields. The Zu
o small antic out 6
uunbayan o il field has produced a total of abo
million ba
arrels from shallow
s deptths (2,000 to
o 2,500 ft), w
while the nea
arby Tsagaan Els oil field
d has
produced
d smaller volumes
v from depths of
o 4,265 to
o 4,600 ft. ds produce from
Both field
conventio
onal reservo
oirs comprising lacustrin
ne siltstoness, sandstone
es and cong
glomerates w
within
the Tsag
gaantsav and
d Zuunbayan
n formations
s, which werre sourced b
by the interb
bedded lacusstrine
shales. Original oil in place at the two fields totaled an estimate
ed 150 Mmilllion barrels. Oil
verages 28°° API.3
gravity av
Each
E sin contains up to 13,00
sub-bas 00 ft of Midd le Jurassic tto Tertiary ssedimentary rock,
including
g thick lacusttrine-depositted mudston
ne. Northeasst-trending, mainly norm
mal and strikke slip
(left-laterral) faults bo
ound the su
ub-basins. The structu on includes Mid-
ural history of the regio
Jurassic to Early Cretaceous
C rifting (north-south exttension), Ea
arly Cretace
eous north-ssouth
compression and inversion alon
ng pre-existting faults, rrenewed sed
dimentation and right-la
ateral
ment along
displacem g northeast faults durring the M
Mid-Cretaceo
ous, followe
ed by postt-Late
Cretaceo
ous east-wes
st shortening
g.
Basement
B in the East Go
obi Basin co
onsists of me
etamorphose
ed sandston
ne and carbo
onate
of the Pa van Tolgoy sequence. The oldestt sedimentarry unit is the Lower to Mid–
aleozoic Tav
Jurassic Khamarkho
oovor Forma
ation, a pre--rift sequencce consisting
g of up to 2
2,500 ft of ffluvial
nes and lacu
sandston ustrine-deltaiic shale, including thin ccoal seams. Although a potential so
ource
June, 2013 XX
XI-6
rock, the
e Khamarkho
oover seldo
om crops ou
ut and rema
ains poorly u
understood. Unconform
mably
overlying
g this unit is
s the Sharly
yn Formation
n, containing
g up to 600
0 ft of fluvia
al sandstone
e and
conglome
erate with minor
m lacustriine shale.
Overlying
O the
e Sharlyn Fm
F are the primary sha
ale targets iin the East Gobi Basin
n, the
sagaantsav and Zuunba
Lower Crretaceous Ts ayan formati ons. The Tssagaantsav Fm, a late ssynrift
sequence
e 1,000 to 2,300
2 ft thick
k that locally can contain
n thick oil sha
ale, is mainlly an organicc-rich
shale section interbe
edded with dark
d gray sa
andstones a
and conglom
merates, siltsstones, brigh
ht-red
d basalt. Th
tuffs, and he unit grade
es upward from alluvial ffan to lacusttrine facies, becoming a lithic
sandston
ne reservoir at the Tsaga
aan Els and Zuunbayan oil fields.
A 125-m thick
k core sectio
on in the Tsa onsisting of finely
agsaantsav Fm was desscribed as co
laminated
d mudstone
e and micritte, dolomitic
c breccia, a
and calcare
eous siltston
ne. These fine-
grained units are in
nterbedded with grains ally graded sandstone beds
stone and tthin, norma
ed as distal lacustrine tu
interprete urbidites. An
noxic, stratiffied lake-botttom conditio
ons are indiccated
by micro-lamination, biogenic py
yrite, high TO
OC, and carrbonate preccipitation. T
TOC ranges from
ale, mainly oil-prone
1.5% to 15% for sha o Typ
pes I and II kerogen. S
S1 and S2 vvalues are a
above
0.5 and 10, vely, indicating good quality source rocks. The
1 respectiv ermal maturity is immatu
ure to
middle oil
o window. Oil
O quality is
s waxy with
h 20-35% pa
araffin and high pour p
point. Oil tyyping
indicates
s a lacustrine ce.4
e algal sourc
The
T other po
otential shale he Lower C retaceous Z
e target is th Zuunbayan F
Formation, w
which
consists of up to 3,2
200 ft of sa
ands and miinor interbed
dded shaless and tuffs deposited d
during
Hauteriviian to Albian
n time underr non-marine
e to paralic e
environmentts. Howeverr, the Zuunb
bayan
is coaly, probably cla
ay-rich, and likely less brittle,
b thus n
not a very prrospective ta
arget for sha
ale oil
developm
ment.
Deep
D portions (6,000 to 10,000
1 ft) off the Unegt, Zuunbayan, and other ssub-basins iin the
East Gob
bi Basin may be oil pron
ne and offerr potential s hale oil targ
gets. Burial history mod
deling
suggests
s that peak oil
o generation occurred during
d the C
Cretaceous ((90 to 100 M
Ma), continuiing at
a lower rate to the present day
y. Howeverr, the East G
Gobi Basin is structurally complex,, with
us closely sp
numerou paced faults that
t may lim
mit its potenti al for shale oil developm
ment.
June, 2013 XX
XI-7
1.2 Reservoir
R Properties
Within
W 690-mi2 high
the 4,6 h-graded pro
ospective are
ea of the Un
negt and Zuunbayan tro
oughs
in the Ea
ast Gobi Ba
asin, the Low
wer Cretace
eous Tsagaa
antsav Form
mation contains an estim
mated
300 ft (net) of organic-rich lacus
strine shale at an averag
ge depth of 8,000 ft. T
TOC average
es an
estimated
d 4.0% and is oil-prone ging 0.8%). Porosity m
e (Ro averag may be signifficant (6%) g
given
the silty lithology. Th
he reservoir pressure gra
adient is norrmal.
1.3 Resource
R Assessmen
A nt
The
T Tsagaan
ntsav Forma
ation contain
ns an estima hale gas in-place
ated 29 Tcf of risked sh
and 43 billion
b barrels
s of risked shale
s oil in-p
place, of wh
hich 2.3 Tcf of associate
ed shale gass and
1.7 billion barrels of shale oil may
m be techn h risked), Table XXI-1. The
nically recovverable (both
nternational analog appe
closest in he oil-prone window of tthe REM laccustrine shales in
ears to be th
the shalllow western
n Cooper Ba
asin, although these ha
ave not yett been provven commerrcially
productiv
ve.
1.4 Exploration
E n Activity
No
N shale oil or shale ga
as exploratio
on or leasing
g has occurrred in the E
East Gobi B
Basin.
Calgary-b
based Mana
as Petroleum Corp. is conducting petroleum exploration for conventtional
targets in
n this basin
n but has no d its shale potential.5 London-bassed Petro M
ot discussed Matad
Limited is
s evaluating
g Khoid Ulaa
an Bulag oil shale depossit in Block IV for poten
ntial mining. This
deposit reportedly
r has
h similar mineralogy to the Gree ormation in Wyoming, USA,
en River Fo
containin
ng carbonate
e, quartz, an
nd feldspar mineralogy.
m Extended F
Fischer Ana
alysis yielded
d one
6
liter of 29
9° API oil fro
om a 10-kg sample.
s
2 TAMTSAG
T BASIN
2.1 In
ntroduction
Although
A geo milar to the East Gobi Basin, the 6,700-mi2 T
ologically sim Tamtsag Bassin in
extreme eastern Mongolia has no
n commerc
cial oil and g
gas producttion. The ba
asin comprisses a
number of
o isolated, fault-bounde
f ed troughs th
hat trend WS
SW-ENE alo
ong an exten
nt of about 8
80 by
300 km, Figure XXI--4. Just as in the Eastt Gobi Basin
n, potential source rockks are the L
Lower
Cretaceo
ous Tsagaan uunbayan formations, wiith TOC ave
ntsav and Zu eraging abou
ut 3%.
June, 2013 XX
XI-8
Figure XXI-4. Westeern Tamtsag Basin

B Showing Small Isolatted Structural Troughs wheere Source Roock
Shales are
a Buried to Over
O 5,000 ft and
a May Reachh Oil-window Thermal Matuurity.
Source: Petro
P Matad Ltd., 2012
In
nternally the
e Tamtsag Basin
B comprises a num
mber of uplifted fault bllocks and d
down-
faulted grabens
g ated by rifting and Mid
crea d-Cretaceouss basin inve ure XXI-5.7 Late
ersion, Figu
Cretaceo
ous transpre
ession forme
ed structura otably tilted fault
al traps in cconventionall targets, no
blocks and anticlines
s. Structura
al complexity
y is most prronounced in the southw
west, decrea
asing
towards the northea
ast. The basement co
onsists of D
Devonian to Permian m
metamorphicc and
intrusive rocks.8
June, 2013 XX
XI-9
Figure XX
XI-5. Seismic line
l in the Tsaamtsag Basin Showing Souurce Rocks Buuried to a Deptth of about 6,0000 ft.
Source: Petroo Matad, 2010
The
T Tamtsag
g Basin conttains up to 13,000
1 ft of Mid-Jurassicc to Tertiaryy non-marine
e and
volcanic sedimentarry rocks. Grain
G texture
e fines upw
ward from co
oarse contin
nental rift-fill and
fluvio-deltaic conglomerates and sandstone
e in the low
wer section transitionin
ng into lacusstrine
mudstones and shale
es. The bas
sal Upper Ju
urassic conssists mainly o
of volcanic d
deposits (ba
asaltic
sitic) with minor
to andes m interbe
edded sedim
ments. The
e overlying Lower Crettaceous dep
posits
consist of
o fluvio-deltaic conglo
omerates an
nd sandsto nes that fine upward into deepw
water
lacustrine
e shales. Younger
Y nozoic conglomerates, ssandstones, and mudsto
Cen ones cover m
much
sozoic units.9
of the basin, concealling the Mes
The
T Tamtsag
g Basin is on trend with
w the Ha
ailaer Basin
n of northeastern Chin
na, a
stratigrap
phically and genetically similar Mesozoic rift ba sin. Althoug
gh the Haila
aer Basin ha
as not
experienced shale ex
xploration, itt is oil produ
ucing and thu
us has much
h better data
a control. Similar
to the Tamtsag, the
e Hailaer Ba
asin actually
y comprisess over 20 in
ndividual fau
ult-bounded sub-
sits and carrbonaceous mudstoness within the upper portion of the L
basins. Coal depos Lower
ous Nantun Formation are
Cretaceo a considerred the majo
or petroleum
m source roccks in the Ha
ailaer
Basin. The
T Hailaer Basin oil fie
elds produce
e with high w
water cut an
nd have loca
ally elevated
d CO2
levels.
June, 2013 XX
XI-10
The
T Nantun Formation was
w depositted within fa
an delta fron
nt, pro-fan d
delta, marsh
h and
lacustrine
e environme
ents. Organ
nic carbon content
c of th
he organic-rich mudston
ne within thiss unit
ranges frrom 0.23% to
t 16.67%, averaging
a 2.56%. The mudstone b
becomes oil--prone (Ro a
above
elow a depth of about 6,500 ft, Fig
0.7%) be gure XXI-6,110 while Tmaxx averages 4
447°C with most
5°C, indicatiing oil-prone kerogen.111
samples above 435 Limited conventiona
al oil produ
uction
n the Hailaerr Basin, evidently due to poor reservvoir condition
occurs in ns and high water satura
ation.
In additio
on, the Lowe
er Cretaceou
us conventio
onal sandsto
one reservoiirs can conta
ain elevated
d CO2
levels of up to 90%, which has been
b isotopically linked with granite
e intrusions emplaced d
during
the Yans ny.12
shan Orogen
XI-6. Vitrinite Reflectance Increases

Figure XX I to About
A 0.8% Roo at a Depth of 2.5 Km in the Wuerxun Trrough
of China’s
C Hailaeer Basin, Adjacent to the Taamtsag Basin in Mongolia.
Souurce: Liu et al., 2009

2
June, 2013 XX
XI-11
2.2 Reservoir
R Properties
P
Within
W 440-mi2 high
the 5,4 h-graded pro
ospective are
ea that is distributed am
mongst nume
erous
small troughs within the Tamtsag
g Basin, the Lower Creta
aceous Tsag
gaantsav Fo
ormation con
ntains
an estimated 250 feet (net) of organic-rich
o lacustrine sshale at an a
average dep
pth of 7,000 feet.
TOC ave
erages an estimated
e 3.0% and is oil-prone (R
Ro averagin
ng 0.8%). Porosity ma
ay be
significan
nt (6%) given
n the silty lith
hology.
2.3 Resource
R Assessmen
A nt
The
T Tsagaan
ntsav Forma
ation contain
ns an estima
ated 26 Tcff of shale ga
as and 43 b
billion
barrels of
o shale oil in
n-place, of which
w 2.1 Tcff of associate
ed gas and 1.7 billion ba
arrels of sha
ale oil
may be technically recoverable (both riske
ed), Table X
XXI-1. The closest inte
ernational an
nalog
appears to be the oill-prone wind
dow of the REM
R lacustrin
ne shales in the shallow
w western Co
ooper
Basin, although these have not yet
y been pro
oven comme
ercially produ
uctive.
2.4 Exploration
E n Activity
No
N shale oil or
o shale gas
s exploration
n or leasing has occurre
ed in the Tamtsag Basin
n, nor
does the
e basin pro
oduce oil orr gas from conventiona
al reservoirrs. PetroCh
hina is currrently
conductin
ng exploratio
on drilling for convention
nal reservoirrs in this bassin.
REFERE
ENCES
1 Petroleum
m Authority of Moongolia, personaal communicationn, July 2011.
2 Prost, G..L., 2004. “Tecctonics and Hyddrocarbon Systeems of the Easst Gobi Basin, Mongolia.” Am
merican Associaation of
Petroleum
m Geologists, Buulletin, vol., 88, p.
p 483-513.
3 Pentilla, W.C.,
W 1994. “Thee Recoverable Oil
O and Gas Resoources of Mongoolia.” Journal off Petroleum Geoology, vol. 17, p. 89-98.
4 Johnson, C.L., Greene, T.J., Zinniker, D.A., Moldowan, J.M., Henddrix, M.S., and Carroll, A.R., 2003. “Geochhemical
Characteristics and Corrrelation of Oil and Nonmarine Source Rocks ffrom Mongolia.”” American Asssociation of Pettroleum
Geologistts, Bulletin, vol., 87, p. 817-846.
5 Manas Peetroleum Corp., Corporate
C mber, 2012, 29 p .
Preseentation, Septem
6 Petro Mattad Limited, Interrim Results for thhe Six Months Ended
E 30 June, 22012, 10 p.
7 Petro Mattad Limited, Corpporate Presentattion, November 2010.
8 Henk, A., Davaa, B., Geeerdts, P., Vogler, M., and Wem mmer, K., 2007. “Structure and Evolution of thee Tamtsag Basiin / NE
Mongolia.” Geophysical Research Abstraacts, vol. 9, p. 24415.
9 Geerdtz, P.,
P Vogler, M., Davaa,
D B., and Henk,
H A., 2006. “Evolution of thhe Tamtsag Bassin / NE-Mongolia — part I: Bassin Fill.”
Poster, TSK 11 Goettingeen,
June, 2013 XX
XI-12
XXI. Mongoolia World Shale Gas and Shale Oil Resource Assesssment
EIA/ARI W
10 Liu, X.Y
Y., Deng, H.W., Di, Y.X., Gao, X.P., Wang, J.K., and Long, G G.Q., 2009. “H High Quality Souurce Rocks of Nantun
Formationn in Wuerxun Deepression, Hailaer Basin.” Petrooleum Geology aand Testing, vol.. 31, p. 68-73 (inn Chinese).
11 Wang, J.G., Chen, G.P., and Wang, T.Q
Q., 2010. “The Geochemical
G Coal Measure Strata and Coal-D
Chaaracteristics of C Derived
Hydrocarrbon in Huhehu Sag, Hailaer Baasin, China.” American Associaation of Petroleuum Geologists, Search and Disscovery
Article #10266.
12 Gao, Y.Q
Q., Liu, L., and Hua, wsonite-Bearing Sandstones in Hailaer
H W.X., 20099. “Petrology and Isotopic Geocchemistry of Daw
Basin, Noortheastern Chinna.” Applied Geoochemistry, vol. 24, p. 1724-17338.
June, 2013 XX
XI-13
XXII. Thailand EIA/ARI W
XXII. THA
AILAND
D
SUMMA
ARY
While
W no sha
ale gas/oil exploration
e activity
a has been reportted to date in Thailand
d, this
large Southeast Asia
an country has
h significa
ant prospecttive shale ga
as and shale oil potentiial, in
at, Northern Intermontan
the Khora ne and Centtral Plains ba
asins, Figure
e XXII-1.
ure XXII-1. Pro

Figu ospective Shaale Gas and Shhale Oil Basins of Thailand..
Source: ARI, 2013
June, 2013 XX
XII-1
The
T Khorat Basin
B in northeast Thailand has a
an estimated
d 5 Tcf of rrisked techn
nically
as resources, Table XX
recoverable shale ga XII-1. In add
dition, shale oil potentia
al in the Norrthern
Intermon
ntane and Ce
entral Plains
s basins cou
uld be substtantial but w
was not quan
ntified due tto the
o available public data. Block faulting has dissrupted Thaiiland’s onshore shale basins
paucity of
and may
y complicate
e future sha
ale drilling and developm nd’s shale gas/oil
ment. Overrall, Thailan
g but needs to be better defined by ffurther data gathering and analysis.
potential is promising
Table XX
XII-1. Shale Gas
G Reservo
oir Propertiess and Resourrces of Thailand.
Khorat
Basin/Grosss Area
Basic Data
2
(32,400 mi )
Shale Formmation Nam Duk Fmm
Geologic Age Permian
Depositional En
nvironment Marine
2
Prrospective Area (mmi ) 1,750
Physical Extent
Orgganically Rich 400

Th
hickness (ft)
Nett 200
Inteerval 6,000 - 12,0000
Deepth (ft)
Aveerage 9,000
Reeservoir Pressuree Mod. Overpresss.
Properties
Reservoir

% 3.0%
Th
hermal Maturity (%
% Ro) 2.50%
Cllay Content Low
Gaas Phase Dry Gas
Resource
2
GIIP Concentration (Bcf/mi ) 83.0
Riisked GIP (Tcf) 21.8
Riisked Recoverable (Tcf) 5.4
Thailand’s
T gre
eatest poten
ntial appears
s to be shale
e gas depossits contained
d in Permian
n and
Triassic shale sourc
ce rocks in the Khorat, the countrry’s largest onshore sedimentary b
basin.
These shales can be locally thick,
t nic-rich, dry gas prone
organ uried, and over-
e, deeply bu
pressure
ed. Deposite
ed under shallow marine
e conditionss, they are likely to mine
eralogically b
brittle
and suita
able for hydraulic fractu
uring. The Khorat
K Basi n has an exxisting gas p
pipeline netw
work,
local drillling rigs, and
d active inde
ependent oill and gas prroducers wh
hich could fa
acilitate shale
e gas
developm
ment.
Thailand’s
T sh
hale oil pote
ential appea
ars to be m olated sub-basins
more limited. Small iso
within th ntain organic-rich shale
he Northern Intermontane and Central Plainss basins con es of
Oligocen
ne to Early Miocene
M age. These units
u source
ed the basin
n’s conventio
onal oil deposits,
including
g the 30,000-b/d Sirikit-1 oil field. Th
hermally imm
mature oil shale depositts that are lo
ocally
June, 2013 XX
XII-2
mined att the surfac

ce may conttain mobile hydrocarbon
ns at depth
h. Howeverr, these low
w-rank
Tertiary shales
s were deposited under
u lacustrine sedime ntary conditions and ma
ay be high in
n clay
content with
w low “frac
ckability”.
INTROD
DUCTION
During
D the pa
ast three de
ecades Thailand has bu
uilt up a substantial oil and natura
al gas
productio
on industry. The country
y produced 393,000 b/d
d of crude oil and liquidss in 2011 an
nd 3.6
Bcfd of natural
n i 2011.1 Nearly
gas in N 90% of
o its curren t petroleum output com
mes from offsshore
fields in the Gulf of Thailand
d, with only limited p
production ffrom small onshore ffields.
Approxim d’s primary energy co nsumption is supplied by natural gas,
mately 40% of Thailand
including e country’s power genera
g most of the owing vehicle fuel usage
ation and gro e.
Essentially
E all of the oil and gas curre
ently producced in Thaila
and comes frrom conventtional
sandston
ne and carb
bonate reserrvoirs. While a handfu
ul of coalbed
d methane exploration wells
were drilled in Thaila
and during 2004-6,
2 witho
out commerccial successs, and some low-permea
ability
carbonattes are being
g targeted in
n convention
nal anticlinal traps in the
e Khorat, the
ere have bee
en no
reports of e/tight oil or gas explora
o unconventional shale ation & deve
elopment to
o date. The
e only
tangible sign of activ
vity for Thailand’s uncon
nventional rresources was an MOU signed betw
ween
Statoil and
a PTTEP in January
y 2011 cov
vering poten
ntial joint sstudies of cconventional and
unconventional resou
urces in Tha es.2
ailand and otther countrie
ARI’s
A review
w of publishe
ed geologic at Thailand has three main
c literature i ndicates tha
onshore sedimentary
y basins which may hav
ve unconven
ntional oil an
nd gas poten
ntial, Figure XXII-
1. These
e include the
e large Khorrat Basin in the
t northeasst; a series o
of smaller, issolated pull--apart
basins (s
such as Ma
ae Sot) in th
he Northern Intermonta ne Basin, w
where shale oil depositss are
being mined; and the
e similarly co
omplex Cen
ntral Plains B
Basin, which
h hosts the 3
30,000-b/d S
Sirikit-
1 oil field
d.
Permo-Triass
P sic shale so
ource rocks in the Khorrat Basin, th
hought to have sourced
d the
overlying
g Permian carbonate
c conventional
c reservoirs,, may offer Thailand’s best shale
e gas
e potential. These marine-deposite
resource ed shales arre thick, org
ganic-rich, w
within the dryy gas
thermal maturity
m window, often over-pressur
o red, and ma
ay be minera
alogically brrittle. The K
Khorat
Basin ho
osts an existing gas pipe
eline network, a local su
upply of suita
able drilling rigs, and a small
group of active indep
pendent oil and
a gas prod
ducers.
June, 2013 XX
XII-3
Oil-prone
O sha
ale/tight res
sources in Thailand
T ap
ppear to be
e less prosp
pective, alth
hough
available
e geologic in
nformation is scanter. The most o
obvious oil-prone shale
e potential is the
downdip extension of
o lacustrine
e oil shale (s
solid minera
al) deposits which are m
mined on a small
scale in the
t northern
n inter-monta
ane basins. Similar sha
ale/tight oil d
deposits also
o may be pre
esent
in the Central
C Plain
ns Basin. These
T oil-prrone shaless appear less prospecttive due to their
lacustrine
e origin, low
w apparent thermal ma
aturity, as w
well as the general pa
aucity of pu
ublicly
available
e subsurface
e geologic da
ata.
1. KHO
ORAT BASIIN
1.1 In
ntroduction
The
T Khorat Basin
B in norrtheast Thailand appearrs to have tthe country’ss best shale
e gas
potential. Thailand’s
s largest ons
shore sedime
entary basin 0-mi2 petrolifferous Khora
n, the 35,000 at lies
e southern half
within the h of the Khorat
K Plateau, a large roughly circcular physiog
graphic provvince.
Ringed by
b mountain
n ranges, the
e Plateau ittself is relatiively flat witth 200-m avverage eleva
ation.
Drained by the Moin and Chi Rivers, the Khorat Pla
ateau receives less rain
nfall than ce
entral
Thailand, with more extreme dry
y and wet seasonality. The local e
economy of this rural arrea is
mainly ag
gricultural ba
ased, with fe
ew large citie
es or industrrial centers.
The
T Khorat Basin
B is sep
parated from
m the Sakon Nakhon Ba
asin to the n
north by the
e Phu
Phan antticline. The Khorat rests
s on the Indo
ochina tecto
onic micropla
ate, which iss bordered b
by the
Shan Th
hai and Sou
uth China plates
p to th
he west and
d north, resspectively. Its sedime
entary
sequence
e comprises
s a series of Late Cambrian through
h Recent stra
ata, which a
are interrupte
ed by
numerou mities and dominated by Permo--Carbonifero
us unconform ous, Triassic/Mesozoic, and
Tertiary/ Quaternary deposits. Figure
F XXII-2
2 illustrates the stratigra
aphy and pe
etroleum sysstems
horat Basin.3 The shallo
of the Kh ow marine to
o basinal Pe
ermian Saraburi Group iis considere
ed the
primary source
s rock,, while the fluvial to lacu
ustrine Triasssic Kuchina
arai and Hua
ai Hin Lat Grroups
offer add
ditional sourc
ce rock pote
ential. Perm
mian dolomite
e and karste es form the main
ed limestone
conventio
onal petroleu
um reservoirrs.
The
T structura
al Khorat Ba
asin depress
sion was inittiated during
g the Middle
e Paleozoic,, with
widespre
ead deposittion of clas
stic and ca
arbonate se
edimentary rocks, beg
ginning with
h the
Carbonife
erous Si Tha n.4 Tectonic
at Formation c extension d
during the Ea
arly Permian
n broke the basin
apart into
o numerous horst and graben blocks separated by high-ang
gle normal fa
aults. Carbo
onate
osits of the Pha Nok Kh
reef depo hao Formatio
on formed o
on regional h
highs, while clastic and sshale
June, 2013 XX
XII-4
deposits of the Na
am Duk Fo
ormation we
ere depositted in the troughs, w
with some a
areas
hing 20,000 feet thick. Mixed sediments of th
approach he Hua Na Kham Form
mation were then
deposited
d during the
e Middle to Upper Perm
mian. Later basin-scale
e compressio
on and inve
ersion
caused regional
r uplift and thrustting. Seism
mic and therm
mal maturityy data indica
ate that uplifft and
erosion removed
r 3,0
000 to 9,000 feet of sedim
mentary covver during this event.
Figure XXXII-2. Stratigrraphy and Petroleum Systemms of the Khoorat Basin. Shhallow Marine Permian Saraaburi
Group iss the Primary Source
S Rock. The Fluvial to
o Lacustrine TTriassic Kuchhinarai and Huuai Hin Lat Grooups
Also Have
H Potential. Permian Do olomite and Kaarsted Limestoones are the M
Main Conventional Petroleuum
Reservoirs.
R
Source: Thaailand Ministry off Energy, 2007.
June, 2013 XX
XII-5
Following the
e Indosinian orogeny, Ea
arly Triassicc continental and lacustrrine sedimen
nts of
the Kuch
hinarai Group began to unconforma
ably fill the e
extensional g
grabens of tthe Khorat B
Basin.
A second orogenic collision ma
arked by vo
olcanics folllowed, afterr which Late
e Triassic ffluvial
clastics were
w depositted. A further erosional or non-dep ositional hia
atus occurred
d until the M
Middle
to Late Jurassic, after
a which non-marine
e clastics a nd shales of the Kho
orat Group were
d. After a Middle Crettaceous periiod of deforrmation and volcanic evvents, evapo
deposited orites
and clastics of the Mahasarakha
M am Formatio
on were dep
posited. Fin
nally, the Te
ertiary Himalayan
orogeny brought abo
out regional uplift
u and ero
osion, removving up to 6,000 feet of rock.
Figure XXII-3
3 shows a southwest-northeast o
oriented seissmic time ssection from
m the
western Khorat Basiin. It highlig
ghts possible Permian S
Saraburi Grroup and Triiassic Kuchiinarai
Group so
ource rock shales
s and carbonates,
c which
w may b
be prospectiive for shale
e gas explora
ation.
These sttrata are ove
erlain by fluv
vial and alluv
vial clastic ro
ocks of the JJurassic Kho
orat Group; tthese
are not considered
c prospective
p due to theirr low TOC ccontent. No
ote significa
ant faulting o
of the
Saraburi Group and, to a lesser extent, Kuch
hinarai Grou
up rocks.
Figure XXII-4
4 is a south
h-north orien
nted seismicc time sectiion from the
e eastern K
Khorat
Basin. Here,
H the low
w-TOC Carbo
oniferous Si That Forma
ation is overlain by posssible conventtional
reservoirrs of the Permian Pha Nok
N Khao Formation.
F T
The primaryy Saraburi F
Formation so
ource
rock doe
es not appea
ar to be pres
sent in this part of the b
basin, while
e the Huai H
Hin Lat Form
mation
source ro
ock is relatively thin. These
T Carboniferous, P
Permian, an
nd Triassic rrocks were block
faulted and
a overlain by fluvial and
a urassic Khorat Group. This
alluvial clastic rockks of the Ju
prelimina
ary informatiion suggests
s that the western
w Kho
orat Basin m
may be more
e prospectivve for
shale gas
s exploration
n than the ea
ast.
Figure XXII-5 is a sch

hematic, no
on-directiona
al cross-secction of the Khorat B
Basin
ng conventional petroleum play conc
illustratin cepts. Note the Permo-Triassic sou
urce rock sha
ales -
- the prim
mary targets
s -- are quite
e discontinu
uous, block ffaulted, and
d eroded in many portio
ons of
the basin
n. The patc
chy shale diistribution and structura
al and erosio
onal comple
exity are like
ely to
complica
ate shale gas
s exploration
n in the Khorrat Basin.
June, 2013 XX
XII-6
Figure XX
XII-3. Southweest-Northeast Seismic
S Time Section in Weestern Khoratt Basin, Show
ws Permian Saraburi
Group an
nd Triassic Ku
uchinarai Grou up Source Rocck Shales andd Carbonates, Overlain by FFluvial and Allluvial
Classtic Rocks of the
t Jurassic KKhorat Group.
Figuure XXII-4. So
outh-North Seismic Time Seection from Eaastern Khorat Basin, Showiing Low-TOC
Carbooniferous Si That Formationn Overlain by Conventional Reservoirs oof the Permian Pha Nok Khaao
Formatio
on. The Sarab buri Formation
n Source Rock Does Not Apppear to be Prresent in this Part of the Baasin,
While th
he Huai Hin Laat Formation Source
S Rock iss Relatively T hin. Note Siggnificant Faulting of the Perrmo-
Carbonifferous Sequennce.
June, 2013 XX
XII-7
Figurre XXII-5. Schematic Non-directional Cro oss-section of the Khorat Baasin, Showingg Conventionaal
Petroleum Play Conceepts. Note thee Primary Perm mo-Triassic Soource Rock Shales are Disccontinuous, BBlock
Faulteed, and Partlyy Eroded acrosss the Basin. This Structurral Complexityy may Compliccate Shale Gaas
Exxploration.
Although
A the Khorat Bas
sin is overma
ature for oil, a small num
mber of con
nventional na
atural
gas disco
overies have
e been mad
de. These fields
f target Permian ca
arbonate and Triassic cclastic
reservoirrs within antticlines and stratigraphic traps. N
Natural gas likely was ssourced by older
organic-rrich Permo-T
Triassic shalles, with gas
s being gene
erated during the Early T
Tertiary follo
owing
Cretaceo
ous burial, and then possibly migratiing along fra
actures and faults cause
ed by extenssional
rifting.5
Figure XXII--6 illustrate

es a detailed seismicc structure time map
p and strucctural
interpreta mall gas field in the central Khoratt Basin. No
ation of a sm ote the deep
p Triassic so
ource
rock “kitc plifted anticlinal fold thatt formed a co
chen”, the up onventional gas trap, an
nd the interp
preted
clockwise ong strike-sllip faults that created thi s local struccture.
e rotation alo
UK-based
U ind
dependent Salamander
S Energy hollds several license bloccks in the K
Khorat
Basin. At
A last reporrt, Salamand
der was acq
quiring 3D s eismic, cond
ducting basin modeling, and
planning its first exp
ploration well in 2012-13 to test co
onventional Permian ca gets.6
arbonate targ
Earlier th
his year Yan
nchang Petro
oleum, Chin
na’s fourth la
argest state--owned petrroleum comp
pany,
reportedlly entered into a contra
act with Thailand’s Min
nistry of Energy to exp
plore natural gas
opportun
nities in the Khorat. Coastal
C Enerrgy and Hesss also havve interests in Khorat B
Basin
blocks bu
ut have not reported
r activity in the past
p two yearrs.7,8
June, 2013 XX
XII-8
Figure XXXII-6. Seismicc Structure Tim

me Map and In nterpretation of Small Gas Field in the Khorat Basin. Note
Deep Triaassic Source Rock “Kitchen n”, Anticlinal Fold, and Inteerpreted Clockkwise Rotationn along Strikee-Slip
Faults.
Source: Salamander Energyy PLC.
1.2 Reservoir
R Properties
Thick,
T organic-rich sourc
ce rock sha
ales and ca
arbonates off Permian a
and Triassicc age
occur at prospective
e depth in the
t Khorat Basin, altho
ough mapping the loca
ation and sizze of
depth-screened area
as is not po
ossible with current data
a. These sh
hales are th
hermally dryy-gas-
prone to over-maturre, with little
e or no liqu
uids potentia
al. Deposite
ed under sh
hallow marin
ne to
basinal sedimentary
s y conditions,, these shales are thou
ught to havve sourced the conventtional
Permian carbonate and Triass
sic clastic reservoirs o f this regio
on, including
g two signifficant
producing gas fields..
Shallow
S mariine shales also
a occur in
n the Carbo
oniferous Si That Forma
ation, typica
ally at
depths below
b 00 feet.9
13,00 However,
H ba
asin maturitty modeling estimates that this unit is
thermally
y over-mature and not prospective for shale g
gas development (Ro off 3 to 4%). The
Early Pe
ermian Nam Duk Forma
ation contain
ns several tthousand fe
eet of contin
nental to sh
hallow
marine sediments,
s in
ncluding som
me organic--rich shale. TOC reporrtedly can e
exceed 3%, while
depth ranges from 8,000
8 to more than 10,0
000 feet and
d the formattion often iss over-presssured.
culated vitrin
The calc nite reflectan
nce is over 2.5%,
2 thus tthe Nam Du
uk Fm is a potential dryy gas
shale tarrget that is unlikely to be prospective
e for liquids.
June, 2013 XX
XII-9
Fluvial and lacustrine deposits

d of the Triasssic Kuchinarrai Group also have been
d as petroleu
identified um source ro
ocks in the Khorat
K Basin
n, with high--TOC interva
als of unrep
ported
thickness
s. The Kuchinarai Grou
up reportedly averages a prospectiive 6,500 to 7,000 feet deep
within the
e basin. Th
hermal matu ng suggests it reaches tthe dry gas window, with no
urity modelin
liquids po
otential (Ro> 2.0%).
1.3 Resource
R Assessmen
A nt
As
A discussed
d above, the Permian Na
am Duk Forrmation conttains organicc-rich shaless with
suitable depth
d and th
hermal matu
urity and app
pears to be tthe most pro
ospective tarrget for shale
e gas
developm
ment. Additiional shale gas
g potentia
al may exist in other orga
anic-rich sha
ales, such a
as the
Triassic Kuchinarai Fm,
F but thes
se were not assessed d
due to lack o
of data. The limited pu
ublicly
e data on th
available he Khorat Basin
B is nott sufficient tto constrain
n the region
nal distributio
on of
suitable thickness, depth,
d TOC,, thermal maturity, and prospective
e area. Avverage value
es for
arameters we
these pa ere estimate
ed and augm
mented by a nalogs with commercial North Ame
erican
shale pla
ays that have
e been more
e thoroughly studied.
A good North
h American analog
a for th
he Nam Dukk Fm could b
be the Wolfcamp Shale iin the
est Texas.10
Permian Basin, We 1
These formations share sim
milar age (L
Lower Perm
mian),
onal setting (shallow ma
depositio arine), thickn
ness (>1,000
0 ft), litholog
gy (high in ccarbonate, lo
ow in
clay), TO
OC content (average
( 3%
%), over-pres
ssuring (unccertain in the
e Khorat bu
ut assumed to be
0.6 vs 0.7 psi/ft for th
he Wolfcamp). The Kho
orat Basin a ppears to be
e structurallyy more defo
ormed
and faulted than the Permian Ba
asin but the difference
d iss not extreme
e. Furtherm
more, the Perrmian
Basin Wo
olfcamp is le
ess thermallly maturity, ranging
r from
m the black oil to wet ga
as windows,, thus
the analo
ogy is imperffect.
The
T Nam Du 0 ft thick, w ith reported average 9,0
uk Fm is well over 1,000 000 ft depth
h, 3%
average TOC, and fa
alls within th
he dry-gas th
hermal matu
urity window (Ro > 2.5%). The Nam
m Duk
is discontinuously present within
n the basin due
d to uplift a
and erosion. Prospectivve area coulld not
be rigoro
ously mappe
ed due to la
ack of data but
b is assum 5% of the Khorat Basin area
med to be 5
m 2). Net organic-rich
(~1,750 mi o shale
s thickness also is u
uncertain bu
ut is assume
ed to be 200
0 feet,
much les
ss than 20% of formation
n thickness. Known to b
be over-presssured but not known to what
extent, th
he pressure gradient wa
as assumed to be 0.6 pssi/ft, slightly below the W
Wolfcamp an
nalog.
ARI assu
umed 6% po
orosity based
d on the Wollfcamp analo
og.
June, 2013 XXIII-10

Based
B on the
ese data and
d assumption
ns, the Nam
m Duk Forma
ation in the K
Khorat Basin
n was
estimated
d to have 22 Tcf of risked shale gas in-pllace, with 5 Tcf of rissked, techn
nically
as resources
s, Table XXIII-1. More d
detailed stud
dy is recomm
mended to d
define
and map
p these para
ameters and
d estimate the
t full shalle gas resource potential of the K
Khorat
Basin.
1.4 Recent
R Activ
vity
No
N shale gas
s activity has
s been reported in Thaila
and’s Khoratt Plateau.
2. CENTRAL PLA
AINS BASIN
N

ntroduction
Thailand’s
T Ce
entral Plains
s Basin is located in th
he south-ce
entral portion
n of the cou
untry,
including
g the Bangko
ok region an
nd the highly
y productive
e rice-growin
ng regions o
of the lower Chao
0-mi2 area, the
Praya River. Coveriing a 25,000 t Central P
Plains Basin
n is not a co
ontinuous de
eposit
like the Khorat but rather com
mprises a number
n of small, deep
p, north-sou
uth trending
g and
nuous half-grabens of Tertiary
discontin T age, formed due
e to transpre
essional pulll-apart tecto
onics.
The province includ
des the pro
ominent Ph
hitsanulok, S
Suphan Bu aeng Saen, and
uri, Kampha
Petchabu
un petrolifero
ous sub-bas
sins, among others.
The
T Central Plains Bas
sin is oil-pro
one and cu duces oil from conventtional
urrently prod
Miocene sandstone reservoirs as
a well as pre-Tertiary
p fractured grranites. Mio
ocene lacusstrine-
d shales, wh
deposited hich are orga
anic-rich and considere d the primarry source ro
ocks in this b
basin,
appear to
o have Thailand’s best potential
p for shale oil exxploration. H
However, sh
hale oil prospects
which may be identtified by future work are likely to be limited in size, refllecting the small
discontin e of the sub-basins.
nuous nature
Similar
S to most
m of Thailand’s basiins, the stru
uctural histo
ory of the Central Pla
ain is
punctuated by period
ds of extens
sion and sub
bsequent ero
osion. Lacu
ustrine shale
es and sedim
ments
posited durin
were dep ng Oligocen
ne to Early Miocene
M me.11 An acttive margin developed in the
tim
Middle Miocene,
M de
epositing intterbedded fluvial sandsstones and mudstoness. Alluvial-ffluvial
sedimentts were then deposited towards the end of th
he Tertiary a
and into the
e Quaternaryy. In
some are
eas, up to 26
6,000 feet off Cenozoic strata
s have b
been preservved.
June, 2013 XXIII-11

Middle
M Mioce
ene sandsto
ones (and more
m recentlyy pre-Tertia
ary granites)) are the priimary
conventio
onal target in the variou
us Central Plains
P sub-b
basins, such
h as at Sirikkit field within the
Phitsanulok Basin. Thailand’s
T la
argest onsho
ore oil field, the Sirikit (n
now called S
S-1) comme
enced
productio arly 1980’s, with over 250 wells driilled and 17
on in the ea 70 MMBO produced to date.
The oil is
s inferred to have been sourced
s from
m the underllying lacustrrine shales. PTTEP acq
quired
the S1 fie
eld from Tha
ai Shell in 20
003 and plan
ns to extractt an addition
nal 40 to 50 MMbbls ove
er the
next 10 years.
y Duriing Q3-2012
2 PTTEP prroduced an average 30,000 b/d of oil from Sirikit-1,
evelopment wells there.. PTTEP’s o
while continuing to drill new de onshore foccus has bee
en on
advanced
d drilling and
d exploration s.12
n techniques
In
n the Phitsa
anulok Basin
n, the main organic-ric h lacustrine mprise the Early
e shales com
Miocene Chumsaeng
g Fm, which
h was depos
sited in a de
eep lake en
nvironment. Stratigraph
hically
nt sediments
equivalen s are also no
oted in the Suphan
S Buri and other sub-basins, u
usually unna
amed.
These type I/II sourc
ce rocks disp
play high to variable
v TOC >2.0%13), wiith high hydrrogen
C (average >
indices re er 700 mg HC/g.14 Gross thickness averages 1,300 feet, with a net org
eaching ove ganic-
rich shale interval of
o at least 600 feet. eper parts o
In the dee of Central P
Plain basinss, the
eng and Earrly Miocene lacustrine shales
Chumsae s may rreach maxim
mum depths of nearly 15
5,000
feet. Oil generation depths in th
he smaller Suphan
S Buri Basin avera
age 7,000 fe
eet, suggestting a
large ran
nge in therma
ally mature depths
d for liq
quids producction.
Figure XXII-7
7 illustrates the stratigrraphy and cconventiona
al petroleum
m systems o
of the
Central Basin.
B Oligo
ocene Nong
g Bua and Sarabop
S form
mations, the oldest sedimentary roccks in
the Centtral Basin, re
est unconfo
ormably on pre-Tertiary
p basement. Fluvial to lacustrine shales
within the Oligocene
e to Early Miocene
M Ch
hum Saeng Group act as the ma
ain source rrocks.
Clastic ro
ocks of the Oligocene Lan
L Krabur and
a Miocene
e Pratu Nam
m Nan forma
ations, depo
osited
under alluvial plains settings, are
e the conventional rese
ervoir targetss. These in turn are ove
erlain
by Late Miocene
M to Recent alluvial fan dep
posits source
ed by region
nal uplift asssociated witth the
Himalaya
an Orogeny.
Figure XXII-8
8 shows a west-east
w orriented, unin
nterpreted se
eismic time section from
m the
Phitsanulok Basin, one
o of nume
erous sub-b
basins within
n the overall Central Pla
ains Basin. The
urce rocks are
main sou a fluvial to lacustrine shales
s within
n the Oligoccene to Earlyy Miocene C
Chum
Saeng Group,
G which
h appear to be discontiinuously pre
esent on top
p of pre-Mio
ocene basem
ment.
Significant normal faulting may hinder
h shale oil developm
ment in this basin.
June, 2013 XXIII-12

Figure XX
XII-7. Stratigraaphy and Petrooleum System
ms of Thailandd’s Central Bassin. Fluvial too Lacustrine S
Shales
within th
he Oligocene to t Early Mioceene Chum Saeeng Group aree the Main Souurce Rocks, w while Alluvial P
Plain
Clasticss of the Oligoccene Lan Krab m Nan Formations are Convventional Targets.
bur and Mioceene Pratu Nam
Source: Thailand Ministry off Energy, 2007
Figure XX
XII-8. West-East Seismic Tim
me Section in the Phitsanullok Sub-basinn within the Ceentral Plains B
Basin.
The Main Source Rocks are Fluvial to
t Lacustrine Shales
S within the Oligocene to Early Mioocene Chum S Saeng
Groupp, Discontinuo
ously Present on Top of Pree-Miocene Bassement. Notee Significant N Normal Faultinng.
Source: Thaailand Ministry off Energy, 2007
June, 2013 XXIII-13

3. NOR
RTHERN IN
NTERMONT
TANE BASIN

ntroduction
Thailand’s
T Northern Inte
ermontane Basin
B is a la
arge looselyy defined area covering
g the
north-cen
ntral and northwestern portions
p of the country. Similar to tthe Central Plains Basin
n and
quite unlike the relattively continu
uous Khoratt Basin, the Northern Inttermontane Basin comp
prises
numerou
us small an ely isolated structural ttroughs tha
nd complete arated by uplifts.
at are sepa
Several of
o these pull-apart basin Basin, produce oil in antticlinal traps from
ns, such as the Fang B
conventio
onal sandsto
one reservoiirs that were
e sourced byy organic-ricch Miocene lacustrine sh
hales.
In additio
on, solid oil shale minerral resources near the ssurface in th
he Mae Sot Basin are u
under
small-sca
ale mining development
d t. These orrganic-rich la
acustrine-de
eposited sha
ales may beccome
thermally
y more matu
ure and con
ntain mobile oil in the d
deeper troug
ghs, althoug
gh ARI could not
map this due to very sparse data
a control.
Mae
M Sot Sub
b-Basin. The
T Mae Sott Sub-basin of northwestern Thaila
and is one o
of the
more prrominent in
ntermontane
e basins in
n this topo
ographicallyy mostly rugged Norrthern
Intermon
ntane region. This north-south tren
nding basin extends over an area of approxim
mately
900 mi2, with one-third of the are
ea extending
g across the
e Moei River into Myanm west.15
mar on the w
Gently undulating hills and alluvial plains comprise
c th
he topograph
hy of the ba
asin itself, w
which
s about 650 feet above sea
averages s level.
The
T Mae Sott Basin is div
vided into no
orth and sou
uth sub-basins, with the
e southern re
egion
having th
he thickest sedimentary
s y section. It contains m
mainly non-m
marine Cenozzoic sedime
entary
units ove
erlying Permian to Jurassic carbonatte and clastiic rocks thatt were depossited in pull--apart
basins and
a half gra
abens. Th
hese units include the Mae Rama
at, Mae Pa
a, and Mae
e Sot
ns, the latterr recognized for its oil sh
formation hale depositss.
Hydrocarbon
H n of the Mae
exploration M Sot Ba
asin began with Swisss and Japa
anese
geologistts in the late
e 1930’s. In
n 1947 Thailland’s Depa
artment of M
Mineral Reso
ources condu
ucted
an oil sh
hale reserve
e evaluation.. During the 1980’s, th
he German and Japane
ese governm
ments
conducte
ed feasibility
y analyses of
o the oil sha
ale potentia l. Since 20
000 Thailand
d’s Mineral F
Fuels
Division has renewed
d its researc
ch on Thailan
nd’s oil shale
e deposits.
June, 2013 XXIII-14

Fang Sub-Basin. The crescent-shaped Fang Sub-basin in the far north of Thailand,
located about 150 km north of
o Chiang Mai,
M is a ffault-bounde
ed intermonttane depoccenter
containin 0-mi2 trough
ng Cenozoic sediments, Figure XXIII-9. The 220 h trends NW
W-SE and bo
orders
a steep mountain
m ran
nge to the ea
ast. The Fan
ng Basin is g
generally fla
at with slightlly rolling hillss and
an avera
age elevatio e sea level..16
on of 1,500 feet above A high geothermal gradient e
exists
througho
out the half-g
graben, evid
denced by ho
ot springs in
n the northern region. S
Site of Thaila
and’s
first commercial oil field, over 240 wells have
e been drille
ed to date in the Fang Su
ub-Basin.
Figure XX
XII-9. Stratigraaphy and Petro
oleum System
ms of Thailandd’s Central Bassin. Fluvial too Lacustrine S
Shales
within th
he Oligocene tot Early Mioceene Chum Saeeng Group aree the Main Souurce Rocks, w while Alluvial P
Plain
Clastics of Oligocene Lan Krabur and Miocenee Pratu Nam N Nan Formationns are Convenntional Targets.
Source: Thaailand Ministry off Energy, 2007
During
D the early Tertiary
y, extensional faults and
d rifting asssociated with
h the Indian
n and
Himalaya
an collision opened up the basin. Syn-rift seq
quences of alluvial-fluvial and lacusstrine
sedimentts were dep
posited durin
ng the Eoce
ene to Mioccene, followe
ed by post-rrift sequencces of
younger alluvium and
a marked by a sign
nificant unco
onformity. Overlying tthese rockss are
entiated grav
undiffere vels, sands, soils,
s and clays of Quate
ernary to Re
ecent age. T
Total thickne
ess of
the sedim
mentary sequence reach
hes 10,000 ft.
f
The
T stratigraphy of the Tertiary
T rock wo units, the Mae
ks generally can be divided into tw
Fang and underlying
g Mae Sot formations. Interbedde
ed coarse ssandstone and red to yyellow
claystone
e occur in th
he Late Mioc
cene to Pleis
stocene Mae
e Fang Form
mation; these
e were depo
osited
in an allu
uvial-fluvial environment
e and average 1,400 feett thick. Belo
ow this unit, fluvial sandsstone
layers wiithin the Mae
e Sot Forma
ation have been
b the prin
nciple reservvoirs for conventional oil field
June, 2013 XXIII-15

productio
on in the basin, beginning in the 19
920’s. As th
he Northern Intermontane region’s most
productiv
ve locale, th
he Fang Ba
asin has yiielded six o
oil fields, allthough the Pong Nokk and
Chaiprak
karn were ab
bandoned in
n the mid 1980’s. These
e reservoirs apparently were source
ed by
lacustrine
e mudstones
s and shales
s within the Mae Sot Fo
ormation itse
elf, most likely the main sshale
oil explorration target within the Fang
F Basin.
3.2 Reservoir
R Properties
Mae
M Sot Sub-Basin. The
T Paleoce
ene Mae Ra
amat Forma ns mostly alluvial
ation contain
conglome
erate, sand
dstone, lime
estone, and mudstone units that unconforma
ably overlie pre-
17
Tertiary strata.
s Th
he Mae Ram
mat Fm is up
p to 700 fee
et thick and deeper than
n 3,300 feett (the
maximum
m total deptth of available well da
ata). Overlyying the Ma
ae Ramat F
Fm is the U
Upper
Oligocen
ne Mae Pa Formation,
F which
w contains lacustrin
ne and fluvia
al deposits, including shales
and marls, along with prevalentt limestone lenses in th
he southern sub-basin. Minor oil sshale
deposits can occur within
w the 30
00-ft thick Mae Pa Fm, a
albeit interbe
edded with large amoun
nts of
low-TOC
C strata. The
e Mae Pa Fm
F averages
s about 3,00
00 ft deep. O
Overall, the Mae Rama
at and
Mae Pa formations are not con
nsidered via
able source rocks due to lack of o
organic richness,
undeterm
mined shale thickness an
nd low therm
mal maturity.
The
T most org
ganically rich
h shale in the
e Mae Sot B
Basin is the M
Miocene Ma
ae Sot Forma
ation,
which is dominated by shale witth minor clas
stics. One interval with
hin the Mae Sot Fm con
ntains
y thin (10 to
relatively t 15 feet) oil shales beds within
n sandy sh
hale assemb
blages, alth
hough
m thickness can exceed
maximum d 33 feet. Rock minerralogy is dom
minated by quartz, feld
dspar,
calcite, dolomite,
d and clay (prroportions not
n reported
d). In the northern ssub-basin, tthese
lacustrine
e oil shale deposits are
e grey to grreen and ne
early 100 fe
eet thick. K
Kerogen con
nsists
mainly off exinite, with immobile oil
o content ra
anging from 2.5 to 62 ga
allons per to
on (1% to 26
6% by
weight). Oil shale grade
g is highest in the middle-lowe
er section off the unit. T
This formatiion is
typically about 2,000
0 feet deep
p across mu
uch of the M
Mae Sot Ba
asin. Overa
all, the Mae
e Sot
on appears too
Formatio t shallow and
a immature for shale oil development, with Ro well below
w the
0.7% thre
eshold.
Fang Sub-Ba M Sot Formation of M

asin. The Mae Miocene to P
Pliocene age can be divvided
e units: a lo
into three ower section
n of brown to
t reddish sa
andstone; a middle zon
ne of organicc-rich
lacustrine
e claystone,, shale, and
d coal with interbedded sandstone; and an upp
per layer off gray
claystone
e, mudstone
e, and sands
stone along with fossil iinclusions. The conven
ntional sandsstone
June, 2013 XXIII-16

XXII. Thailand World Shale Gas and Shale Oil Resource Assesssment
EIA/ARI W
reservoirrs have 25%

% porosity an
nd 0.2 to 2.0
0 Darcies of permeabilityy. The crude oil rangess from
PI gravity.18
16 to 38 degrees AP
The
T rich bitu ales of the middle unitt are the re
uminous sha ecognized ssource rock, with
calculate anic carbon averaging 15% (Type I or II).19 Grross formatio
ed total orga on thicknesss can
be up to 2,100 feet,, while high--TOC shale intervals in
nterbedded w
with sandsto
one average
e 300
k (net). The formation was
feet thick w penetratted in conve
entional wellss at depths o
of 3,000 to 3
3,500
feet, but these likely
y were drille
ed on structtural highs. Absent vitrrinite reflecttance data b
burial
history modeling
m su
uggests an Ro of 0.5%
% is not rea
ached until about 4,000
0-ft depth. The
minimum
m depth for mobile
m oil ge
eneration (0.7% Ro) mayy be about 6
6,000 ft. Onlly a small po
ortion
of the Fa
ang Basin appears to meet
m these screening
s crriteria. ARI is unable to
o quantify su
uch a
prospective area give
en limited av
vailable data
a.
REFERE
ENCES
1 U.S. Energgy Information Administration,

A Thailand Country Brief, February 20, 2013.
2 PTTEP, neews release, Maarch 18, 2011.
3 Polachan, S., 2007. “2007 : The 20th Bidding Round.” Thailand
T Ministryy of Energy, Deppartment of Mineeral Fuels, June 19, 40
p.
4 Koysamraan, S. and Comrrie-Smith, N., 20011. “Basin Moddeling of Block L26/50, Easternn Khorat Plateauu, Northeast Thaailand.”
Departmeent of Mineral Fuels,
F Ministry of
o Energy, Banggkok, Thailand, The 4th Petroleeum Forum: Appproaching to thhe 21st
Petroleum
m Concession Biddding Round, May 26 – 27, 8 p.
5 Schenk, C.J.,
C 2010. “Asssessment of Unndiscovered Oil and Gas Resoources of Southeast Asua.” United States Geoological
Survey, 722 p.
6 Salamander Energy PLC,, Macquarie Expplorers Conferennce, January 100, 2011, 22 p. (ccompany’s moree recent reports do not
mention thhe Khorat Basin.)
7 Coastal Ennergy, Corporatee Presentation, October,
O 2012.
8 Hess Corpporation, News Release,
R November 2, 2012.
9 Departmennt of Mineral Fueels, “Thailand Peetroleum Provincces.” Ministry off Energy, Bangkkok, Thailand, 6 pp.
10 Fairhurst, B., Hanson, M.L.,
M Reid, F., and
a Pieracacos, N., 2012. “W WolfBone Play Evolution, Soutthern Delaware Basin:
Geologic Concept Modifiications That HaveH Enhanced Economic SucccessAmerican AAssociation of Petroleum Geoologists,
Search annd Discovery Artticle #10412, possted June 18.
11 Ronghe, S. and Surarat, K., 2002. “Acooustic impedancce interpretation for sand distribbution adjacent tto a rift boundarry fault,
Suphan Buri
B basin, Thailaand.” Bulletin, American Associaation of Petroleuum Geologists, vv. 86, no. 10, p. 7767-780.
12 PTTEP, 2012.
2 Managem
ment Discussion and
a Analysis of Operating Resuults for the Third Quarter of 20122, October 25.
13 Patience, R.L., Rodriguess, S.L., Mann, A.L., An Integrated O
A and Poplettt, I.J.F., 1993. “A Organic Geochem
mical and Palyonfacies
Evolution of A Series of Lacustrine Sedim
ments from Thailaand.” ASCOPE 93 Conference Proceedings, Baangkok, p. 75-844.
June, 2013 XXIII-17

14 Bal, A.A., Burgisser, H.MM., Harris, D.K., Herber, M.A., Rigby, S.M., TThumprasertwong, S., and Winkkler, F.J., 1992.. “The
Tertiary Phitsanulok
P Lacuustrine Basin, Thailand.” Nationnal Conference oon Geological R
Resources of Thhailand, Departm
ment of
Mineral Resources, Bangkok, p. 247-258..
15 Gibling, M.R., Tantisukrrit, C., Uttamo, W., Thanasuthhipitak, T., and Harluck, M., 1985. “Oil Shale Sedimentologgy and
Geocehem mistry of Mae Soot Basin, Thailannd.” American Association
A of Peetroleum Geologgists, v. 69, no. 55, p. 767-780.
16 Lertassaw
waphol, P., 20088. “Spatial Distribution and Relationship of Petrooleum Reservoirrs in the Fang O
Oil Field, Amphoee Fang,
Changwatt Chiang Mai.” Department
D of Geology,
G Chulaloongkorn Universi ty, 106 p.
17 Suwannathong, A. and Khummongkil, D., 2007. “Oil Shaale Resource in Mae Sot Basin, Thailand.” Coloorado School of Mines,
27th Oil Shhale Symposium
m, October 15-177, 8 p.
18 Settakul, N., 2009. “Fangg Oilfield Development.” Walailaak Journal of Sciience & Technollogy, vol. 6, p. 1--15.
19 Giao, P.H
H., Doungnoi, K.,
K Senkhamwonng, N., and Srihiran, S., 2011. “Assessment oof Petroleum Reesources for thee South
Fang Bassin: Uncertaintiees and Difficultiees.” Departmennt of Mineral Fuuels, Ministry off Energy, Bangkkok, Thailand, TThe 4th
Petroleum
m Forum: Approaaching to the 21sts Petroleum Conncession Biddingg Round, May 266 – 27, 74 p.
June, 2013 XXIII-18

XXIII. Indonesia EIA/ARI W
XXIII.. IND
DONESIIA
SUMMA
ARY
In
ndonesia ha
as shale ga
as and sha
ale oil pote
ential within selected m
marine-depo
osited
formation
ns, as well as
a more exte
ensive shale
e resources within non-m
marine and o
often coaly sshale
deposits,, Figure XXIIII-1. The best overall potential
p app
pears to be mostly oil-p
prone, lacusstrine-
deposited
d shales within the Ce
entral and South
S Suma
atra basins,, which sou
urced the prolific
nearby conventional
c oil and gas fields. Kalimantan’s K
Kutei and Tarakan basins also have thick
lacustrine
e source roc
ck shales witth oil and ga
as potential.
Fig
gure XXIII-1. Shale
S Basins oof Indonesia
Source: ARI, 2013
June, 2013 XX
XIII-1
In
ndonesia ha
as an estim
mated 46 Tcf
T and 7.9
9 billion ba
arrels of rissked, techn
nically
as and shale oil resources out of 3
303 Tcf and 234 billion barrels of rrisked
shale gas and shale
e oil in-place
e, Tables XX
XIII-1 and XX
XIII-2. Seve
eral compan
nies (AWE, B
Bukit,
gy) have rep
NuEnerg ported early
y-stage evaluations of sshale gas p
potential in Sumatra, bu
ut no
PSC’s ha
ave been aw
warded nor has
h shale-rellated drilling activity bee
en reported.
Table XXIII-1.
X Shalee Gas Reservo
oir Properties and Resourcees of Indonesia.
C Sumatra
C. S. Sumatra Kutei Tarakan Bintuni
Basin/Grross Area
Data
2 2 2 2 2
(336,860 mi ) (45,170 mi ) (35,840 mi
m ) (7,510 mi ) (15,200 mi )
B i D t
Shale Foormation Brrown Shale Talan

ng Akar Balikpapan Naintupo Meliat Tabuul Aifam Group
Basic
Geolog gic Age P

Paleogene Eocene--Oligocene Mid.-U. Mioocene L. Miocene Mid. Miocene U. Mioccene Permian
Depositional Environment L
Lacustrine Lacustrine Lacustrine Lacustrine Lacustrine Lacustrrine Marine
2
Prospective Areea (mi ) 4,700 155,490 1,6300 1,010 880 5100 3,340
t t
Ph i l EExtent
O
918 900 750 1,000 1,5000 1,000
Thickness (ft)
N
Net 266 3
367 450 375 400 6000 500
Physical
I
Interval 6,5560 - 10,496 3,3000 - 8,000 3,300 - 155,000 6,600 - 16,000 33,300 - 13,120 3,300 - 6,600
6 5,000 - 15,000
Depth (ft)
A
Average 8,530 7,000 9,0000 11,500 10,000 5,0000 9,500
Highlyy
Reservoir Presssure Normal Noormal Normal Normal Normmal Normal
Properties
Reservoir
Overpreess.
Average TOC (w
wt. %) 6.0% 5
5.0% 4.0%% 5.0% 3.0% 3.0%
% 1.5%
Thermal Maturitty (% Ro) 0.80% 0.70% 0.70%% 1.50% 1.15% 0.70%% 1.50%
Clay Content Medium H
High Highh High High Highh Low
Gas Phase A
Assoc. Gas Assooc. Gas Assoc. Gas
G Dry Gas Wet Gas Assoc. Gas Dry Gas
Resource
2
Risked GIP (Tcf)) 41.5 6
67.8 16.2 34.5 25.1 3.8 114.3
R
Risked Recoveraable (Tcf) 3.3 4.1 1.3 5.2 3.8 0.2 28.6
Table XXIII-2. Shalee Oil Reservoir Properties aand Resourcees of Indonesiaa.

C. Sumatra S. Sumatra Kutei n
Tarakan
Basin/Gross Area 2
Basic Data
2 2 2
(36,860 mi ) (45,170 mi ) (35,840 mi ) (7,510 mii )
Shale Formation Brown Shalee Talang Akar Balikpapan Meliat Tabul
Geologic Age Paleogene Eocene-Oligocenne Mid.-U. Miocene Mid. Miocene U. Miocene
U
Depo
ositional Environmen
nt Lacustrine Lacustrine Lacustrine Lacustrine L
Lacustrine
2
Prospecctive Area (mi ) 4,700 15,490 1,630 880 510
Physical Extent
Organically Rich
R 295 918 900 1,000 1,500
Thickneess (ft)
Net 266 367 450 400 600
Interval 6,560 - 10,4966 3,300 - 8,000 3,300 - 15,000 3,300 - 13,120 3,300 - 6,600
Depth (fft)
Average 8,530 7,000 9,000 10,000 5,000
Reservo
oir Pressure Normal Normal Highly Overpress. Normal Normal
Properties
Reservoir
Averagee TOC (wt. %) 6.0% 5.0% 4.0% 3.0% 3.0%

Thermaal Maturity (% Ro) 0.80% 0.70% 0.70% 1.15% 0.70%
Clay Co
ontent Medium High High High High
Oil Phaase Oil Oil Oil Condensate Oil
Resource
2
OIP Con
ncentration (MMbbl/m
mi ) 32.8 50.2 64.7 7.1 103.7
Risked OIP (B bbl) 69.4 136.2 16.9 1.3 10.6
June, 2013 XX
XIII-2
In
n general, western
w Indo
onesia has comparative
c ely simple sttructure but is dominate
ed by
the non-marine shale types, wh
hereas easte
ern Indonessia has abun
ndant marine shale dep
posits
but is structurally more
m comple
ex. Eastern Indonesia (Sulawesi, Seram, Burru, Irian Jayya) is
ally more com
tectonica mplex but ha
as excellent marine-depo e source rockks.
osited shale
INTROD
DUCTION
In
ndonesia is the
t world’s fourth
f most populous
p co
ountry (250 m
million) and a major prod
ducer
of coal, oil,
o and natural gas. Forrmerly an oill exporter an
nd OPEC member, Indo
onesia’s decclining
oil produ
uction and in
ncreasing do
omestic consumption ha
ave made th
he country a net oil imp
porter
1 Indonesia produced an
since 2004. In 2011 a average 2.5 million b
bbl/day of crude oil from
m 4.0
arrels of pro
billion ba oved reserve
es, while co
onsuming 3. 1 million bb
bl/day. Indo
onesia rema
ains a
major ex
xporter of LNG
L and pip
peline-conve
eyed natura
al gas, prod
ducing an average 7.4 Bcfd
during 2011 while exporting
e 7 Bcfd.1 However, Ind
3.7 donesia’s do
omestic gass consumption is
ster than its output. Ga
rising fas as prices ha
ave risen sig
gnificantly in recent years and new LNG
import terminals are being constructed in Jav
va, Indonesiia’s most de
ensely popula
ated island.
In
ndonesia’s Ministry
M of Energy
E and Mineral Ressources (MIIGAS) administers upsttream
investme
ent policy an
nd awards exploration
e and
a producti on licenses in the coun
ntry’s oil and
d gas
industry. A separate
e organizatio
on BPMIGA
AS administe
ers the imple
ementation o
of these lice
enses
and work programs. Howeverr, a recent (November 2012) judiccial decision
n by Indone
esia’s
highest court
c unexp
pectedly diss
solved BPM
MIGAS, direccting MIGAS
S to implem
ment oil and
d gas
investme
ent. Indones
sia’s 2001 Oil
O and Gas Law
L is expe
ected to be rrevised durin
ng 2013 to cclarify
these sig
gnificant changes and cle
ear up the current regula
atory uncerttainty.
Domestic
D and foreign companies
c are
a active in a’s oil and gas sector, with
n Indonesia
foreign companies
c operating the
e bulk of prod
duction. Pe
ertamina, Ind
donesia’s wh
holly state-ow
wned
oil comp
pany, plans to eventua
ally transitio
on into a l isted compa
any with significant prrivate
ownership. PGN (Pe
erusahaan Gas
G Negara
a), the domin
nant natural gas pipeline
e operator th
hat is
partly sta
ate- and pu
ublicly owne
ed, is gradu
ually moving upstream business as well,
g into the u
including
g pursuing unconvention
u nal gas dev mpanies acttive in Indonesia
velopment. Foreign com
include Chevron,
C To
otal, Conoco
oPhillips, Ex
xxonMobil, and BP, ass well as nu
umerous sm
maller
Indonesia
an and foreign operators
s.
June, 2013 XX
XIII-3
ARI’s
A review
w of publishe
ed geologic literature indicates thatt Indonesia has a numb
ber of
onshore sedimentary
y basins whiich may hav
ve shale gass/oil potentia
al. These incclude the Ce
entral
and Soutth Sumatra basins
b on Sumatra Islan
nd; the Kuteii and Taraka
an basins in Kalimantan
n; and
smaller, structurally complex ba
asins in eas
stern Indone
esia (Salawa
ati, Bintuni, Tomori). O
Other
n Indonesia appear
basins in a to be
e less prosp
pective due tto low TOC, high clay an
nd CO2 conttents,
and/or ex
xcessive stru
uctural comp
plexity.
The
T petroleum source ro hore Indonessian basins are relative
ocks in onsh ely young, m
mostly
Eocene to
t Pliocene, with older Permian
P sou
urce rocks p resent in the
e east, Figure XXIII-2. Their
depositio
onal setting ranges
r from deepwater marine in ea
astern Indon
nesia to mostly lacustrine
e and
deltaic en
nvironments
s in central and donesia’s orrganic-rich shales
a western Indonesia. Many of Ind
are non-marine coaly deposits that
t may nott be brittle e opment. MIGAS,
enough for sshale develo
the upsttream oil an
nd gas reg
gulator in In
ndonesia, h as estimate
ed the coun
ntry’s shale
e gas
resource
es at 574 Tc
cf. Howeve
er, neither th
he methodo logy nor the
e basis of this estimate
e has
been rep
ported.
Figure XXIII-2. Straatigraphy of Source

S Rocks and Conventiional Petroleuum Reservoirss in Indonesia.
SUMAATRA EAST KALIMANTAN EAST IND
DONESIA
BASIN NORTH SUMATRA CENTRAL SUMATRA SOUTH SU
UMATRA KUTEI TARAKAN TO
OMORI BULA SALAWATI BINTUNII
ERA PER
RIOD EPOCH F O R M A T I O N
QUATE
ERNARY Pleistocene Biak Sele
Kampung Baru Tarakan Wahai/Fufa Steenkool
Pliocene Julu Rayou Minas Kasaal K
Kintom Klasaman
Domaring
Serula Petani Poh/Mantawa
Tabul Klasafet Klasafett
Muara Enim
E Balikpapan
Meliat
Keutapang M
Minahaki
Miocene Telisa/Duri
Naintopo Salas
Mesaloi M
Matindok Kais Kais
Baong Air Benakat Klinjau
Seilor
CENOZOIC
Batu Raja
R Sujan Tomoori
Peutu/Arrun/Belumai Bebulu Klamogun New Guinea Lst
TERTTIARY Baangko Bekasan
Gumaai
Bampo Pamaluan Bassal clastic Sirga
Oligocene Manggala Talang Akar
Jeuku Faumai
Sembakung
Atan Faumai
Lemataang
Bruksah Pem
matang Kelesa Nief
Eocene
Lahaat BOH
Waripi Waripi
Paleocene
Upper Kembelang
CRETA
ACEOUS Bangggai Granites Sawai
Lower Jass
Upper Kola Sh
Middle Kembelanggan
MESOZOIC
JURA
ASSIC
(Roabiba--
Lower
Manusela/ Aalenian Ss)
S
Saman Saman
Upper
Lst Tipuma Tipuma
TRIA
ASSIC
Middle Kanikeh
Lower Saku
Upper Ainnim
Group
Aifam
PERMIAN Tehoru/Taunusa
PALEOZOIC
Lower Aifam Aifat

CARBONNIFEROUS Aim
mau
DEVOONIAN
Kemum
SILU
URIAN
Source Rock
R Conventional Reservoiir Absent/Unknown
June, 2013 XX
XIII-4
1 NORTH,
N CE
ENTRAL, AND
A SOUTH
H SUMATR
RA BASINS
S
1.1 In
ntroduction
Sumatra
S has
s shale oil and
a gas potential in th
hree deep b
basin complexes: the N
North,
Central, and South Sumatra
S bas
sins, Figure XXIII-3. Th e North Sum
matra Basin produces m
mainly
onal gas botth onshore and
conventio a offshore
e. Howeverr, gas producction has de
eclined sharply in
this basin and the Arun
A LNG export
e facility
y is being cconverted to NG imports. The
o handle LN
Central Sumatra
S Ba
asin produce
es mainly oil onshore, notably 300
0,000 bbl/da
ay from the Duri
thermal EOR
E field, and
a is a majo
or consumer of natural gas for stea
am fuel. The
e South Sum
matra
Basin produces both
h oil and inc
creasing vollumes of ga
as from onshore fields. Major coal and
coalbed methane de
eposits also occur in So entral Suma
outh and Ce North Sumatra is
atra, while N
largely barren of coa
al. All three basins are back-arc tecctonic settin
ngs containin
ng young, ra
apidly
deposited
d and poorly
y lithified sed
dimentary ro
ocks. Heat fllow and CO2 content oftten are eleva
ated.
Fiigure XXIII-3. Prospective Shale

S Areas in
n the Central aand South Sum
matra Basins, Indonesia.
Source: ARI, 2013
June, 2013 XX
XIII-5
North
N Suma
atra Basin. A series off north–soutth trending ridges and grabens, fo
ormed
during th
he Early Olig
gocene, bec
came filled with
w predom
minantly mariine depositss. These incclude
deep ma
arine claystones, shales and shallow
w water limesstones on sttructural highs, while sh
hallow
eltaic facies formed in the southeas
water de n source rocks are the Middle Mio
st. The main ocene
Lower Baong shale and the Ea e Belumai ccalcareous shale. The
arly Miocene e Late Oligo
ocene
Bampo black
b shale, which form
med in localiz
zed thick an
nd euxinic d
deposits, is a
another pote
ential
ock.2 The Bampo
source ro B conta
ains thick, de
eep marine claystones, mudstones and dark shales
and is the
e main source rock for gas
g fields in the northern
n part of the North Suma
atra Basin.
Thermal
T maturity of the Baong, Belumai, and B
Bampo shalles is gas-prone but TO
OC is
dom exceeding 1% (Typ
low, seld pe III) while clay is abu
undant (mosstly smectite
e). CO2 and
d H2S
contamin
nation are fairly common
n: output from
m the Arun g
gas field ave
erages about 20% CO2, while
the Peutu
u carbonate reservoir co
ontains 82%
% CO2. Overrall, these so
ource rocks appear to b
be too
low in TO
OC and possibly ductile due to their shallow de
epth, rapid b
burial, high cclay contentt, and
young ag
ge. There ha
ave been no
o reports of shale
s explorration activityy in the Nortth Sumatra B
Basin
and we do
d not consid
der it to be prospective
p for
f shale gass/oil develop
pment.
Central
C Sum
matra Basin
n. Sumatra’’s most imp
portant oil-prroducing reg
gion, the Ce
entral
Sumatra Basin is a trans-tensio
onal pull-apa
art basin bo
ounded by m
major strike--slip faults to the
d south. It developed
north and d during the La
ate Cretaceo
ous to Early Tertiary in a back-arc se
etting
as a resu
ult of the Ind
dian Ocean plate subdu
ucting at an oblique ang
gle beneath Southeast Asia.
The basin comprises
s a series off north-south
h trending fa
ault-bounded
d troughs th
hat are sepa
arated
ed horst blo
by uplifte ocks. The troughs
t bec
came filled w
with non-ma
arine clasticc, lacustrine, and
marine sediments. Sedimentatio
S on began witth deposition
n of continental sediments followed
d by a
transgres
ssive/regressive marine
e cycle that started in L
Late Oligoce
ene or Earlyy Miocene. The
Paleogen
ne Pematan
ng Group, Lower Mioce
ene Sihapass Group, and Middle Miocene/ Plio
ocene
Petani Group are the
e main Tertia
ary units.
The
T Brown Shale Form
mation within the Pem
matang Grou
up is consiidered the most
important oil-generatting formatio
on in the So
outh Sumatra
a Basin, havving generated an estim
mated
n barrels an
60 billion nd sourced the giant Duri
D ds.3,4
and Mi nas oil field The overlying m
marine
Menggala sandstone
es are the main conve
entional pettroleum reservoirs in C
Central Sum
matra,
consisting of well-so
orted quartzo
ose to subarkosic sandsstones with average >2
20% porosityy and
D of permea
1,500 mD ability.
June, 2013 XX
XIII-6
The
T Brown Shale
S is a lac
custrine-form
med unit, de
eposited in a freshwaterr to brackish
h lake
system with
w anoxic bottom
b cond
ditions. Varia
ation in oil ccomposition within the b
basin is attrib
buted
to local facies
f chang
ges which re
eflect the dis
stribution of productivity and paleocclimate conditions
ns of algal and terrige
ed in varyin g proportion
during source rock deposition that resulte enous
organic matter.
m The organic-rich
h portion of the
t Brown S
Shale is about 295 ft thicck and is 66
600 to
10,500 ftt deep in the
e troughs (a
average deptth 8,500 ft). Mean TOC
C for this un
nit throughou
ut the
basin is approximate
a ely 3.7%, rea
aching 7.3% at the well--exposed Ka
arbindo coal mine, with m
mean
25.3 mg HC/g rock petroleum
p eneration capacity.5
ge
Two
T organic--rich facies occur
o within
n the Brown Shale Form
mation. The
e deep lacusstrine
onsist of darrk brown to black, well laminated, non-calcare
facies co eous shales, containing
g 1 to
15% TOC
C that consis
sts of Types
s I and II kerrogen. The sshallow lacu
ustrine faciess consists of red-
brown laminated carbonate and terrigenous mudstones with occasio
onal coal strringers. Thiss unit
4% TOC, derived from algae that ressulted in oil--prone Type I kerogen.6
contains average 3.4
The
T Keruh, Kiliran,
K Sang
gkarewang, Lakat, and Kelesa Form
mations also
o can be org
ganic
rich, but these are re
elatively imm
mature therm
mally and m
may not be b
brittle. The U. Miocene to L.
Pliocene Binio Form
mation, part of the Petan
ni Group, co equence of medium- to
ontains a se o light
grey clay
ystones and
d minor san
ndstones tha
at are charg
ged with low
w-CO2 and isotopicallyy light
biogenic gas. The Binio
B Fm is overlain by
y the Late P
Pliocene Korrinci Formation, a regre
essive
e of claysto
sequence ones, siltsto
ones, sands
stones, and minor coa
al deposited
d under a ffluvial
ment.7 The Binio
environm B and Ko
orinci formattions are no
ot considered
d to be prosspective for sshale
gas/oil de
evelopment..
South
S Suma
atra Basin. This basin is a significcant conven nd gas producing
ntional oil an
area as well as a fo
ocus of coallbed methan
ne exploratio asin containss late Eocene to
on. The ba
early Oligocene de
eposits of clastic
c sediments in ttranspressio
onal pull-apart depresssions.
Thermal subsidence followed riftting in the la
ate Oligocen
ne to the earrly Miocene, enabling m
marine
ns to depos
incursion sit fine-grain
ned marine sequences in lows an uildups on high-
nd reefal bu
standing blocks. Co
ontinued sub
bsidence dro
owned the ca aused deposition
arbonate syystem and ca
of organic-rich deep-water shale
es and marls that later became gas-prone hyd
drocarbon so
ource
ortheast-dire
rocks. No ected comprression and tectonic inve
ersion began
n in the mid-Miocene, F
Figure
XXIII-4. An estimate
ed 50-90% of
o the faults in
i the basin are potentia
ally active an
nd may be a
at risk
of being triggered du
uring large-sc g.8
cale hydraullic fracturing
June, 2013 XX
XIII-7
Fiigure XXIII-4. Regional and Detailed Crosss Sections off the South Suumatra Basin,, Indonesia.
Source: Hennnings et al., 2012
Petroleum
P so
ource rock shales
s in the
e South Su matra Basin
n include alluvial, lacusstrine,
and brac
ckish-water sediments
s in
n the Lahat Formation
F a
and coals an
nd coaly sha
ales in the Ta
alang
Akar Forrmation.9 Th
hese units re
each a gross
s thickness o
of approxima
ately 1 km. Mid-late Eo
ocene
to early Oligocene
O in age, the La
ahat can be oil-
o or gas-p rone depend
ding on loca
ation.
Because
B of limited
l uantitatively assessed. The
data, the Lahat Formation was not qu
Talang Akar
A Formation is up to over 1 km thick
t in the South Palem
mbang sub--basin, avera
aging
1,300 ft thick.
t TOC ranges from
m 1.7% to 8.5%, locally reaching 16
6%. Therma
al maturity is low
(Ro 0.5%
%) down to about
a 6,000
0 ft depth, in
ncreasing to
o about 0.9% depth of 8,000 ft,
% Ro at a d
averaging about 0.7%
% Ro at 7,00
00 ft.
June, 2013 XX
XIII-8
The
T Miocene
e Muara Enim Formatio
on of the So
outh Sumattra Basin co
ontains impo
ortant
coal and coalbed me
ethane resou
urces that were
w deposite
ed in a coasstal plain environment d
during
all regressive
an overa e cycle, resu
ulting in a th
hick sequencce of mainlyy clastic sandstone, siltsstone,
d coaly shale.10 Therma
coal, and only about 0.4% to 0.45% Ro
al maturity is quite low, reaching o
within tro
oughs up to 4,000 ft deep. Overall, the Muara
a Enim Fm is a coaly an
nd probably non-
brittle no
on-marine deposit,
d too shallow an
nd thermallyy immature
e to be favorable for sshale
developm
ment.
1.2 Reservoir
R Properties
The
T general location of the prospecttive deep tro
oughs in the
e Central and
d South Sum
matra
basins is
s well constra
ained by pub
blic data butt, unfortunattely, not the detailed dep
pth distributiion of
the shale s.11 Howev
e formations ver, proprieta
ary maps d
developed b
by ARI for ccoalbed metthane
exploratio
on in these basins provided improved control o
on depth and
d thermal maturity, indiccating
that abou
ut 5% of the total basin area
a could be
b depth- an
nd thermal-p
prospective ffor shale oil. The
North Su
umatra Basin
n is not cons
sidered prosp
pective.
Central
C Sum
matra. The high-graded
h e area for th
prospective he Brown Sh
hale Formatiion in
2
the Centtral Sumatra
a Basin is es
stimated at 4,700-mi
4 ba
ased on the
e extent of th
he deep trou
ughs.
Within th
his prospective area the Brown Shalle averages 266 ft thickk (net) with a
an average d
depth
of 8,530 ft. Average
e TOC is esttimated at 6..0% and is i n the oil win
ndow (Ro of 0.8%). Presssure
gradient is normal an
nd the clay content
c is co
onsidered me
edium.
South
S Suma
atra Basin. The Eocene
e to Oligocen
ne Talang A
Akar Formation is prospe
ective
90-mi2 area and estima
within a large 15,49 ated to have
e a 367-ft tthick high-graded zone
e with
average 5% TOC and
a 0.7% Ro. The pre
essure grad
dient is norm
mal and the
e clay conte
ent is
considere
ed high.
1.3 Resource
R Assessmen
A nt
Central
C Sum n. Risked, technically recoverable
matra Basin e resources from the B
Brown
Shale are
e estimated at 3.3 Tcf of
o associated
d gas and 2. 8 billion barrrels of shale
e oil out of 4
42 Tcf
and 69 billion
b s of shale gas and shale oil in-placce (all figuress risked). A
barrels ARI considerrs the
shale oil resource in
n the Centra
al Sumatra Basin
B to be the most prospective sshale potenttial in
a, particularly given th
Indonesia he extensive
e drilling an
nd transport
rtation infrasstructure alrready
present in what is the
e country’s most
m importa
ant oil-produ
ucing region..
June, 2013 XX
XIII-9
South
S Suma
atra Basin. The Talang
g Akar Form
mation has a
an estimated
d 4.1 Tcf and 4.1
billion ba
arrels of technically reco
overable shale gas and
d shale oil re
esources, o
out of 68 Tcf and
136 billio
on barrels off shale gas and oil in-place (all figu
ures are riskked). While
e larger than the
estimated
d Brown Sha
ale oil resou
urce in Centrral Sumatra,, there is mu
uch less pub
blic data available
on the Ta
alang Akar.
1.4 Shale
S Leasing and Ex
xploration Activity
A
Four shale gas

g joint stu
udies totalin m2 in the C
ng 5,000 km Central Sum
matra Basin were
initiated by MIGAS in March 2012, Figure XXIII-5.
X (No
ote that altho
ough classiffied as shale
e gas
studies, the main source rocks
s here actually are in the oil wind
dow.) Fourr companiess are
ng these bloc
evaluatin cks, includin
ng Bukit Ene
ergy Inc., AW
WE Limited, and New Ze
ealand Oil & Gas
(NZOG).12 Although Indonesia does
d not yett have forma
al shale licen
nsing regula
ations, these
e joint
studies eventually
e co
ould lead to Indonesia’s first shale ga
as PSCs.
Figure XXIII-5.
X Locatiion of Severall Approved Sh
hale Gas Jointt-Study Areas in The Centraal Sumatra Baasin.
Source: Moddified from AWE

E Limited, April 2012
2
June, 2013 XXIII-10

Calgary-base
C ed Bukit is a small private oil and
d gas E&P company that operate
es or
participattes in seve
eral conventtional petrolleum licensses in the C
Central and
d North Sum
matra
basins. Bukit also has
h applied for unconve
entional sha le gas/oil exxploration blocks in Sum
matra
cipates an aw
and antic ward during 2013.
Earlier
E this ye
ear Australia
a-based AW
WE announce
ed that they planned to make a deccision
about the
eir study during Q3 201
12, but to da en released..13 New Zea
ate no decission has bee aland
based NZOG
N holds
s convention
nal petroleu
um PSC’s iin the Centtral (Kisaran
n) and Norrthern
(Bohorok
k) Sumatra basins,
b partn
nering with Bukit
B in eac h block, and
d also reportts it is evalu
uating
shale ga
as opportunities nearby. No shale
e-related drillling has be
een disclose
ed in Sumattra or
anywhere
e in Indones
sia.
2 KUTEI
K AND
D TARAKAN
N BASINS
2.1 In
ntroduction
The
T Kutei (or Kutai) is Indonesia’s
I largest sed asin, its 36,000-mi2 onsshore
dimentary ba
portion centered arou
und the Mah
hakam Delta
a in eastern Kalimantan,, Figure XXIII-6. The Ku
utei is
the second largest oil
o and gas producing
p re
egion in Indo
onesia afterr Central Sumatra as we
ell as
Indonesia g producerr. The Bontang LNG exxport facility on the coasst is the main
a’s largest gas n gas
market within
w this lightly popullated region
n, with a ca
apacity of 2
22.5 million t/yr. How
wever,
Bontang has been operating at about 16 million t//yr due to declining cconventionall gas
productio
on in East Ka
alimantan.
The
T mi2 Tarakan Basin, loca
7,510-m up the coast in northe
ated north u east Kalima
antan,
contains a similar se
edimentary sequence
s as
s the Kutei Basin. Fluvvio-deltaic to
o shallow m
marine
shales off Late Eocen
ne age are overlain
o by Oligocene
O to
o Early Mioccene open m
marine carbo
onate
platforms
s. Finally Mid-Miocene
M to Quaterna
ary fluvio-de
eltaic sandsttone, shales, and coals were
deposited
d. The entiire sequenc
ce has been gently defo
ormed with NE-SW tren
nding folds. The
main sou
urce rocks are
a Mid-Late Miocene co
oals and coa
aly shales o
of the Tabul Formation, while
fluvial-de
eltaic sandsttones of the
e Tabul and Plio-Pleisto
ocene Tarakkan Formatiion are the main
conventio
onal reservo
oirs.
June, 2013 XXIII-11

Fig
gure XXIII-6. Prospective
P Shale
S Areas in the Kutei andd Tarakan Bassins, Eastern K
Kalimantan.
Source: ARI, 2013
The
T Kutei Ba
asin is bound
ded by the Mangkaliat
M P
Platform on the north, tthe Kuching High
on the west,
w and the Paternos
ster High on
o the south
h. It develloped by riffting and syyn-rift
depositio
on during the mid-late Eocene.
E De
eep marine sediments w
were depossited in the basin
center du
uring the late
e Eocene to
o late Oligoc
cene, with a carbonate p
platform devveloped alon
ng the
basin edge. Figure XXIII-7 sho
ows the gene
eral structurre of the Ku
utei Basin an
nd illustratess that
these ma
arine mudroc han 5 km in the onshore
cks are mostly deeper th e basin exten
nt.
June, 2013 XXIII-12

Figu
ure XXIII-7. Geeneralized Easst-West Trend
ding Structuraal Cross-Sectioon Across thee Kutei Basin,
Showing Marine Mu udrocks Mostlyy Deeper thann 5 Km in the O Onshore Areaas.
Source: Ram
mdhan and Gouty, 2011
The
T main sou
urce rocks recognized
r in
n the Kutei Basin are M
Mid-Late Mio
ocene mudsttones
and carb
bonaceous shales, with essentially
e all
a of the convventional oill and gas pro
oduction sou
urced
from thes
se shallowerr Neogene flluvio-deltaic deposits. T
These source
e rocks also
o are the prin
ncipal
shale gas/oil explora
ation targets
s in the basin. Prograd ing deposition during th
he early Mio
ocene
formed deltaic
d sedim
ments, which
h are rich in organic mattter in coal sseams and coaly
n Type III o
mudstones. Therma
al maturity of this sequence in the d
deeper troug one, ranging from
ghs is oil-pro
0.6% to 0.9%
0 Ro.14
The
T mostly deltaic
d Mioc s of the Ballikpapan Grroup in the Kutei Basin
cene shales n are
characterized by a depositional
d environmen
nt rich in lan
nd-plant matterial and co
ontaining Tyype III
kerogen.15 TOC ranges from 2%
% to 6% (av
verage 4%) b
but some inttervals have
e over 20% T
TOC.
The interrbedded sha
ale, sand, an
nd coal sequ
uence is ove
er 3,000 feett thick in ma
any areas. D
Depth
to the top
p of the oil generative
g zone
z (0.7% Ro) average s 9,000 feett in the onsh
hore Kutei B
Basin,
while Mio
ocene rocks
s become overmature
o for
f gas belo
ow 19,000 fft depth. Shale oil pote
ential
appears to be largely
y confined to
o the eastern n coast and productive M
n Kalimantan Mahakam Delta.
Structural
S de
eformation started
s durin
ng the midd
dle Miocene
e, forming steep north-ssouth
trending anticlines with
w more ge
entle synclin
nes. Rapid deposition followed by basin unloa
ading
he Neogene resulted in significant overpressur
during th o re, caused b
by gas gene
eration and w
water
being tra hifying sandstones due to interbed
apped in lith dded mudsto
one seals. Overpressu
uring,
ranging up
u to more than twice hydrostatic
h levels
l (1.0 p
psi/ft), is pre
esent throug
ghout the co
oastal
June, 2013 XXIII-13

portion of
o the Kutei Basin starting below a depth of ab
bout 7,000 fft and accelerating marrkedly
below ab XIII-8.16 The
bout 12,000 ft, Figure XX e average ssurface temp
perature in th
he Kutei Basin is
30°C and
d the averag
ge geothermal gradient is
s about 30°C
C/km.
XIII-8. Pressure Gradients in

Figure XX i the Kutei Basin Can Reacch 1.0 psi/ft B
Below Depths of About 12,000 ft.
Thermal Maturity is Oil-Prone to Im
mmature, with a Very Low Roo/Depth Gradiient.
Source: Ram
mdhan and Gouty, 2011
Further north in the Tara

akan Basin, the
t basin co
ontains Eoce
ene to Mioce
ene deep m
marine
deposits overlain by
y mostly non-marine cla
astic sedime
ents of Miocene and yyounger age
e that
were dep
posited unde
er deltaic co
onditions. The
T principall source rocck is the Late Miocene T
Tabul
Formatio
on, along wiith the Early
y Miocene Naintupo an
nd Middle M
Miocene Me ons.17
eliat formatio
Unfortunately, these three sourc
ce rocks are
e coal-rich d
deltaic depossits that are
e considered
d less
prospective for shale
e gas explora
ation.
The
T Naintupo
o contains deltaic sequ
uences of sshale with ffair to good
d organic ca
arbon
content, ranging from
m 1.6% to 12
2.1% (averag
ge 5%). Ke rogen is ma
ainly Type III along with ssome
Type II. Well penetrrations indica
ate the Nain
ntupo Fm is 1,000 to 1,5
500 feet thick (average 1
1,250
ft thick). Depth rang
ges from 6,0
000 ft to ov
ver 16,000 fe
eet (average
e 11,500 ft)). Well data
a and
story modeliing indicate the Naintup
burial his po Fm is in the dry gass window (R
Ro 1.3% to 2
2.0%,
averaging 1.5%). Lo
ocal structurral uplifts may elevate tthe Naintupo
o to shallow
wer and therrmally
less matu
ure levels, where
w it could
d be oil pron
ne.
June, 2013 XXIII-14

The
T overlying
g Middle Miocene Melia
at Formation
n includes sshales and cclaystones a
along
with sand
dstone, coal, and dolom
mite layers. Total
T organicc carbon of tthe deltaic cclays rangess from
0.7% to 6.5% (avera
age 3% TOC
C), mainly Type III kerog
gen. The M
Meliat Forma
ation ranges from
3,300 to 6,600 ft thick (average
e 5,000). Depth varies from 3,300 feet on bassin highs to over
13,000 fe
eet in the trroughs (ave
erage depth 10,000 ft). Thermal h
history analyysis indicates the
Meliat ha
as wet gas maturity
m (1.0 to 1.3% Ro).
The
T predominant source
e rocks of th
he Tarakan Basin are shales of th
he Late Mio
ocene
Tabul Fo
ormation, again a non-m
marine, deltaic sequence
e. TOC rang
ges from 0.5
5% to 4%, h
higher
in coal-rich sequence
es. Both lith
hologies con
ntain mixture
es of Type III and III kero
ogen. The T
Tabul
Formatio
on averages about 3,300 feet thick, of which a
approximately 1,500 fee
et is organicc-rich,
while depth ranges from 3,300 feet to 6,600 feet. W
Well data an
nd modeling indicate vittrinite
reflectance averages
s 0.7%, in the oil window
w.
2.2 Reservoir
R Properties
Kutei
K Basin. Lacustrine
e mudstones
s and carbon
naceous sha
ales in the M
Mid-Late Mio
ocene
Balikpapan Fm are estimated to
t be prospective within mi2 area nea
n a 1,630-m ar the Maha
akam
ased on limitted cross-se
Delta, ba ection data and
a augmen ted by ARI-p
proprietary ccoalbed metthane
mapping. These sh
hales are oiil-prone (Ro 0.7%) even
n at averag
ge 9,000 ft depth within
n this
y immature basin.
thermally Ne
et thickness is estimate
ed at 450 ft
ft, with averrage 4.0% T
TOC.
Reservoiir pressure is
s elevated above
a hydros
static.
Tarakan
T Bas
sin. Three shale-bearing targets a
are present at varying thermal ma
aturity
(oil- to gas-prone). Depth was estimated based
b mited cross-ssection data
on lim a and propriietary
coalbed methane maps
m develop
ped by ARI. Figure XX
XIII-9 is a w
west-east trending strucctural
ction across
cross-sec s the onsh
hore north-c
central Tara
akan Basin,, showing g
generally simple
structural conditions. The L. Miiocene Tabu
ul Fm avera ges 600 ft tthick (net) and 5,000 ft deep
s 510-mi2 pro
within its ospective arrea, and has
s 3.0% avera
age TOC that is in the o
oil window ((0.7%
Ro). The
e Meliat Fo
ormation occ
curs at 10,0
000-ft averag nd is mostlyy in the wett gas
ge depth an
window (R
( o 1.15%), while
w the Na
aintupo Form
mation avera
ages 11,500 ft deep and is dry-gas-p
prone
(Ro 1.5%
%).
June, 2013 XXIII-15

Figure XXIII-9.
X West--East Trending
g Structural Cross-section
C Across the Onshore North-Central Tarakkan
Basin, Showing
S Geneerally Simple Structural Conditions. Souurce Rocks off the Tabul Forrmation Occur at
Proospective Dep
pths of 1 to 2 Km
K with Oil-prone Ro of 0.66% to 0.7%. Veertical Exaggeeration = 3x.
Source: Subbroto et al., 20055
2.3 Resource
R Assessmen
A nt
Kutei
K Basin. Based on the geologic
c conditions described a
above, the B
Balikpapan F
Fm in
the Kuteii Basin has an
a estimated
d 1.3 Tcf and
d 0.7 billion barrels of rissked, technically recove
erable
shale ga
as and shale
e oil resourc
ces, out of risked
r shale
e gas and o
oil in-place o
of 16 Tcf an
nd 17
billion ba
arrels. Note that this unitt is coaly and may not b
be brittle.
Tarakan
T Bas
sin. The oil--prone Tabu
ul Formation has an estimated 0.2 T
Tcf and 0.3 b
billion
barrels of
o technically
y recoverable shale gas
s and shale
e oil resourcces, out of 3
3.8 Tcf and 10.6
billion ba
arrels of sha
ale gas and shale oil in-place (riske d). The gass-prone Naintupo and M
Meliat
formation
ns have an estimated
e 5 and 4 Tcf off risked, tech
hnically reco
overable sha
ale gas resou
urces
out of 35
5 and 25 Tcff of risked sh
hale gas in-p
place, respe
ectively. In a
addition, the Meliat Fm h
has a
small volume (0.04 billion
b barrels
s) of technically recovera
able conden
nsate from shale.
2.4 Activity
A
No
N shale gas
s/oil leasing or
o exploratio
on activity ha
as been repo
orted in the Kutei or Tarrakan
basins.
June, 2013 XXIII-16

3 EASTERN
E INDONESIA
A BASINS
3.1 In n and Geologic Settings

ntroduction
Eastern
E Indo
onesian sediimentary ba
asins are ma
arkedly diffe
erent from tthose in we
estern
Indonesia
a, with sign
nificantly old
der deposits arine characcter.18
s generally reflecting a more ma
Sulawesi and the islands of eastern
e Indo
onesia have
e some of the countryy’s only ma
arine-
deposited
d (non-lacus
strine) shale
e. Thermal maturity is h
higher too, p
predominate
ely in the dryy gas
window. These bas
sins tend to be small an
nd tectonica
ally complex, thus we group them into a
single Ea
astern Indonesian region
n for analysis
s, Figure XX
XIII-10.
Figure XXIII-10. Prospectivve Shale Areass in Eastern Inndonesia.
Source: ARI, 2013
June, 2013 XXIII-17

The
T Salawatti and Bintuni basins in
n the Bird’ss Head region of weste
ern West P
Papua
contain thick source rocks of Pe
ermian age that
t are rich in Type III coals with ssome contrib
bution
ermature Jurassic marin
from ove ne shales co
ontaining Tyypes II/III ke
erogen. Ho
owever, the main
source ro
ock is Late Miocene
M marine shales and marlsto
ones of the K
Kais and Kla
asafet formattions,
which co
ontain Types
s II/III kerog
gen. The Klasafet
K is o
overlain by thick regresssive shaless and
sandston
nes of the Plio-Pleistocene Klasama n.19 Marine m
an Formation marlstones a
and shales o
of the
Klasaman and Kais//Klasafet formations are
e potential shale oil targets. Theyy contain m
mainly
Type II/IIII kerogen, albeit
a with re
elatively low %.20 The Kla
3% to 1.1%
w TOC of 0.3 asafet is 1,000 to
over 2,00
00 feet thick in deep trou
ughs, with depth ranging
g from 5,000
0 ft in the ea
ast to over 12
2,000
ft in the Sele Strait and
a Salawati Island to the north an
nd west. Th
hermal matu
urity reachess wet
gas levells (1.0% Ro) at a depth of et.21
o 10,000 fee
The
T Klasama
an Formation contains organic-rich
o shales with
h average 1.7% TOC (rrange
0.6% to 2.3%), main
nly Type II and III kero
ogen. It ran
nges from 3
3,000 to 5,00
00 ft thick in the
Salawati Basin, about 15 to 20% of which contains ellevated TOC
C above 1%
%. Depth ra
anges
from less
s than 3,000
0 ft to more than 10,000
0 ft. Biomarrker data ind
dicate the Kllasaman sou
urced
oil seeps
s in the north
h, where calculated vitrinite reflecta nce values approach 0..7% Ro and up to
1.0% in deeper
d s of the Salawati Basin.
parts
Bintuni
B Basiin. The Binttuni Basin, lo
ocated in the
e eastern sid
de of the Birrd’s Head re
egion,
appears to have the
e simplest sttructural con
nditions and
d best shale
e prospectivity in the ea
astern
Indonesia
a region. The Bintuni Basin
B is bord
dered to the e Lengguru Fold/Thrust Belt.
e east by the
The stra
atigraphic se
ection resem
mbles that of the Sala
awati Basin,, with prese
erved Paleo
ozoic,
Mesozoic
c, and Tertia
ary units. Basement consists of Sil urian and D
Devonian me
etamorphic rrocks.
These arre unconform
mably overla
ain by Carbo
oniferous an
nd Upper Pe
ermian clastiic sedimentss and
shales of
o shallow marine
m origiin (Aifam Group).
G Ne
ext are inte
erbedded flu
uvial shaless and
sandston
nes of the Triassic-Jura
T assic Tipuma
a Formation
n and Creta
aceous delta
aic shales o
of the
Kembela
angen Forma
ation.
Limited oil production frrom New Guinea Grou p limestone

es (Kais/Klasafet equiva
alent)
occurred during the 1930’s. In the
t 1990’s ARCO
A Indon
nesia discovvered the W
Wiriagar Deep
p gas
field, whiich produces
s from Midd
dle Jurassic “Roabiba” a
and “Aalenia
an” sandston
ne reservoirss and
NG facility.222 Some so urce rock studies disco
is exportted via the Tangguh LN ount the Kla
asafet
shales, since
s they arre typically im
mmature and
d low in orga der 1% TOC.23
anic contentt, mostly und
June, 2013 XXIII-18

More
M importa
ant are the Permian and Jurassic ssediments, a
analyzed be
elow for sha
ale oil
potential. The Aifat and
a Ainim fo
ormations are
a the respe
ective lowerr and upper members o
of the
Permian Aifam Grou
up and con
nsidered to be the mai n hydrocarb
bon generatting rocks in
n the
Bintuni. The older Aifat consists of blac
ck marine ccalcareous sshales. mited data show
Lim
y modest TO
relatively OC of 1.0% to 1.8%, av
veraging 1.5
5%. Gross thickness ca
an exceed 3
3,500
feet, whille depth can
n exceed 12,000 ft in the
e Bintuni Bassin.
The
T overlying
g Ainim Form
mation also contains
c callcareous sha
ales, althoug
gh deposited
d in a
more deltaic setting. Source roc
ck thickness is approxim
mately 2,400 feet. Depth
h averages a
about
eet. This unit contains adequate
10,000 fe a orrganic matte
er with abund
dant coal se
eams. Hydrrogen
index is over 300 mg
m HC/g. Vitrinite reflec harply lower (0.66% Ro) in the overlying
ctance is sh
Ainim compared with
h the older Aifat,
A indicating an uncon
nformity with
hin the Perm
mian.
n addition to
In mation may be a potential
t the Permian, the Jurassic Tipuma Form
hydrocarrbon source.. The Tipum
ma contains sandstones and carbon
naceous sha
ales. Analysses of
the shallo
ow marine shales
s indica
ate maximum
m TOC of 4.5
5 and 7.6%,, mainly hum
mic kerogen. The
Tipuma ranges
r from 4,000 to nearly 8,000 fe
eet deep. N
Near the Binttuni Basin’s western limiit, the
Jurassic shales are in the immatture-mature oil window, a
at about 0.6
6% Ro.
The
T Tomori Basin
B of eastern Sulawe
esi shares m
many similaritties with the
e Salawati/Bintuni
basins, from
f which iti was transported along
g strike-slip faults. The
e Tomori is a foreland basin
within the
e greater Ba
anggai-Sula
a micro-contiinent, a fold
d-thrust system that devveloped follo
owing
Pliocene collision and
a thrusting
g of contine
ental crust over ophiolitic materia
al. Oil and
d gas
on began du
exploratio uring the 1980’s, resultin
ng in the disscovery of th
he Senoro “g
giant” gas fie
eld in
2001.24 Oil and gas are produce
ed from frac
ctured limesttones of the Lower Mioccene, source
ed by
shales within
w the con
ntemporaneo
ous Tomori Formation,
F w
which is similar to the Klasafet Fm.
The
T Lower Miocene
M Tom
mori Fm, ran
nging from 5
500 to 1,000
0 ft thick, also is a pote
ential
target for shale exp
ploration. It comprises marine and
d carbonace
eous shale a
along with ssome
e and coal, with the upper section typically mo
limestone ore deltaic in origin. TO
OC is fairly high,
averaging 2 to 4% and
a consistiing of Type II/III keroge
en. The low
wer marine section con
ntains
higher Ty en but TOC generally is
ype II keroge s less than 1 %. The Tom
mori Fm atta
ains 0.5% Ro at a
depth of 7,200 ft, bec
coming gas prone (> 1.0
0% Ro) below 00 ft.25
w a depth off about 11,30
June, 2013 XXIII-19

Finally, the Bula Basin in northeast Seram

S island
d contains M
Mesozoic to M
Mid-Tertiary open
marine pelagic
p and oceanic dep
posits, including clays, limestones, and thin sa
andstones. This
assembla
age later co
ollided with Irian Jaya an
nd the Austrralian contin
nental shelf.2
26 Conventtional
oil, sourrced from Triassic-Jura
T assic marine
e carbonate
e Type II mudstone ssource rockks, is
produced
d from fractu
ured Jurass
sic limestone
e as well ass from Plio-P
Pleistocene marginal m
marine
sandston estones.27
nes and lime
3.2 Reservoir
R Properties
Only
O the Binttuni Basin had sufficient data to evvaluate shale
e gas/oil resservoir prope
erties
and reso
ources, while
e the other areas
a (Salaw
wati, Tomori, Bula) lacke
ed adequate data for dettailed
analysis.
Bintuni
B Basin. Figure XXIII-1 sho
ows a WSW
W-ENE trend
ding structural cross-se
ection
he east-central Bintuni Basin.28 According
across th A to this interprretation, the Permian shales
here are too deep but
b marine shales
s within
n the Klasaffet Fm dip g
gently to the
e east and a
are at
prospective depths of
o 2.5 to 5 km, although as noted above thesse appear to
o have low T
TOC.
Further east
e ally deformed by thrustin
this unitt is structura prospective. The
ng and not cconsidered p
prospective Klasafett shale area is inferred to
t be a north
h-south elon
ngated recta
angle just we
est of
the Lengguru Fold an
nd Thrust be
elt, but this unit
u was not assessed due to its low
w TOC (<1%)).
Figure XXIII-12 shows a west-east trending sttructural cro

oss-section a
across the w
west-
central Bintuni
B Basin
n. Here the
e organic-rich and prosp
pective Perm
mian Aifam Group (Aifat and
Ainim forrmations) is about 1.0 to
o 3.5 km de
eep (possiblyy deeper furrther to the e
east), structurally
simple, and
a within th
he volatile oil
o to wet ga % to 1.2%). The prospe
as windows (Ro of 1.0% ective
Aifam Group shale region is as
ssumed to be a north--south elong
gated rectan
ngle in the w
west-
central Bintuni
B Basin.
June, 2013 XXIII-20

Figuree XXIII-11. Geeneralized WSSW-ENE Trend ding Structuraal Cross-sectioon Across thee Bintuni Basinn,
Showing Marine Shalees in the Klasaafet Fm Dippin ng Gently to thhe East at Proospective Depths of 2.5 to 5 Km.
Further East thiss Unit is Struccturally Deform
med and Not P Prospective.
Source: Hill et al., 2001
Figure XXIII-12.
X West--east Structurral Cross-section Across W West-central Biintuni Basin. Here the Orgaanic-
a Prospectivve Permian Aifam Group (A
rich and Aifat and Ainimm formations) is about 1.0 too 3.5 Km Deepp,
Structurally Simple,
S and Within
W the Volaatile Oil to Wett Gas Window
ws (Ro of 1.0% to 1.2%).
Source: Cheevalier et al., 19886
June, 2013 XXIII-21

3.3 Resource
R Assessmen
A nt
Bintuni
B Basiin. The pros
spective areas of the Pe
ermian Aifam
m Group hass an estimate
ed 29
Tcf of tec
chnically rec
coverable sh
hale gas res
sources out of 114 Tcf o
of gas in-pla
ace (both rissked),
as define
ed by the Ro contours of
o 1.2% to 1.8%. This m
marine-depo
osited unit ccould be the
e best
shale ga
as target in
n Indonesia,, although its location is relativelyy remote frrom markett and
services..
3.4 Shale
S Leasing and Ex
xploration Activity
A
No
N shale gas
s/oil leasing or
o exploratio
on activity ha
as been repo
orted in easttern Indonessia.
4 OTHER
O BAS
SINS
In
ndonesia’s other
o onshorre sedimenta
ary basins a
appear to ha
ave limited p
gas/oil development
d t. These areas conta
ain mainly non-marine
e sequences of sandsstone,
siltstone,, coal, and coaly
c shale that are nott considered
d stable and brittle enou
ugh for horizzontal
e well completions.
frac shale
 Bengkulu
B Bas sin. Locatedd in southwe est Sumatraa across the Barisan Mo ountains from
m the
South
S Sumatra Basin, thist relatively small annd structurally deformed fore-arc basin
co
ontains pred dominantly non-marine clastic and d sedimentary rocks of Eocene thrrough
Pleistocene
P age.
a Geochhemical ana alyses have identified th
he Mid-Late Miocene Le emau
Formation as s a potentia al source ro ock. This unit consistts of mudsttone, calcarreous
mudstone,
m co oal seams, sandstone, and conglo omerate dep posited in a mainly shallow
marine
m envirronment tha at transitione ed into man ngrove and freshwaterr environments.29
In
ntense faulting, steep structural
s dip
ps, low therm
mal maturityy (Ro averag
ges 0.40%), and
co
oaly non-briittle lithology
y all appearr to make th he Bengkuluu Basin unssuitable for sshale
gas/oil develoopment.
 Ombilin
O Basinn. This sma all non-produ
ucing basin is located in n west-centra al Sumatra aalong
th
he eastern side
s of the Barisan
B Mouuntains. It iss a transpre essional pulll-apart basin
n that
developed du uring the Eoocene to Mid ddle Oligoce ene and wa as later defo
ormed into ttightly
spaced folds s trending northwest-southeast. T he basal Eocene Bran ni and Oligo ocene
Sangkarewan
S ng formationns were dep posited in laccustrine rift settings. T
This later evo olved
in
nto fluvial de
eposits of th
he Late Oliggocene Saw wahtambang g Formation,, followed by the
marine
m Mioceene Ombilin n Formation n which resu ulted from a global se ea level risee and
trransgressionn.
Several
S shalllow coal min
nes are in operation
o aloong the edgge of the Ommbilin Basin n, but
only a few conventiona al oil & gaas explorat ion wells h have been drilled. T These
encountered conventionaal sandstonee reservoirs ccontaining n
natural gas w
with high leve
els of
June, 2013 XXIII-22

CO
C 2 (50-90% %). Geochem mical analysses indicate
e that shaless within thee Sangkarew wang,
Sawahlunto,
S and Ombilinn formations are the besst source roccks in the baasin. These units
co
ontain Typee III kerogen
n that mostlyy has reachhed the oil wwindow (Tmaax 435-447° C).30
Overall,
O the complex
c stru
ucture, high CO2 conten nt, and non--brittle naturre of the Om
mbilin
Basin
B shales appears to make them poorly suited d for shale g
gas/oil development.
 T Northwest Java Bas

The he larger of the small grraben
sin northeastt of Jakarta is one of th
sttructures on Java Island
d. The Jatiba arang sub-b basin, the onshore extennsion of the larger
Northwest
N Jaava Basin, formed
f by riifting during the Eocene e when volccaniclastics, tuffs
and interbedd ded lacustrin
ne shales weere deposite ed.31 Subsiddence continnued into the
e Late
Oligocene
O an
nd Early Miocene, form ming a seq uence of shale, coal, and sandsttones
deposited in fluvio-delta aic, coastal,, and shallo ow marine environmen nts. Deposition
evolved to ma ainly carbon
nate during thhe Middle M Miocene. Byy Late Miocene to Quate ernary
time subside ence diminiished, with deposition of regresssive clasticcs and pla atform
caarbonates.
Miocene
M sandstone is thhe primary conventional
c l oil and gass reservoir iin the Jatiba
arang
Basin,
B source
ed mainly byb carbonaceous shale and coal o of the Late OOligocene U Upper
Talang
T Akar Formation. Organic material
m conssists mainlyy of Type II and III kero ogen.
Total
T organic
c carbon (TO OC) reachess 40-70% in coal, while the shales a also can be fairly
organic-rich (0.5
( to 9%).32
3
The inter--bedded shaale-clastic se
equence can n be over 1,0000 ft
hick, compris
th sing coal se
eams, limesttone, and sa andstone. Depth to the e Talang Akkar is
about 7,500 tot 11,500 ft. These non n-marine to mmarginal ma arine sourcee rocks can b be oil
and gas pron ne, becoming increasing gly more ma ature offshorre. Shales in the Jatiba arang
Basin
B are co
oaly and unllikely to be brittle enou
ugh for hydrraulic fracturring in horizzontal
wells.
w
 The
T Barito Basin
B in so
outhern Kalimantan is a large (70 0,000 km2 onshore exxtent),
n containing up to 6 km
sttructurally simple basin m of Eocene and youn nger sedime entary
ro
ocks which unconforma ably overlie the igneouus and meta amorphic ba asement. M Minor
co
onventional oil productio
on (of 30-40° API gravityy) occurs in the northern
n Barito, but most
off the basin is non-produ
uctive. Receent coalbed methane exxploration is underway iin the
so
outhern Barito.
The
T Middle Eocene
E to la
ate Early Oligocene
O Ta
anjung Form mation is the e most impo ortant
petroleum so ource rock, consisting
c off fluvial and marginal ma arine clasticc strata, inclu
uding
hin coal deposits.33 The
th e formation isi over 3,30 0 ft thick in Tanjung Fie eld in the noorth.34
High-TOC
H sh
hale and ma arl is concen ntrated in itss upper secction, which reaches 2,4 400 ft
th
hick in the deep
d southe
ern Barito Ba asin.35 Dep pth to the Ta
anjung range es from 3,000 to
12,000 ft, avveraging abo out 6,000 ft deep in th e shallow cconventionall anticlinal ffields.
TOC
T is unce
ertain. The Tanjung ha as entered tthe oil wind dow through hout much o of the
basin, reaching dry gas maturity
m in th
he deepest regions. Ho owever, the shales withiin the
Tanjung
T Fm are
a coaly an nd probably not
n brittle.
June, 2013 XXIII-23

Overlying
O the
e Tanjung FmF are shallow carbona ate rocks of the Late Olligocene to Early
Miocene
M Bera ai Formationn, which reccord a region nal marine ttransgressio
on. Above th hese,
th
he overlyingg Plio-Pleistoocene Waru ukin Formatiion containss marginal m marine to fluvial-
deltaic sedim
mentary rocks s, including thick, low-raank, sub-bituminous coa al deposits. The
ack of signifiicant conven
la ntional oil an
nd gas prod uction in the e Barito Bassin, apart fro
om its
northernmostt edge, is co onsidered a negative
n facctor and makkes this basin unattractivve for
shale gas/oil exploration.
REFERE
ENCES
1 Energy Infformation Adminnistration, 2013. “Indonesia Couuntry Profile.’ Jaanuary 7, 2013.

2 Ryacudu, R. and Sjahbudddin, 1994. “Tampur Formationn, the Forgotten Objective in thee North Sumatraa Basin?” Proceeedings
Indonesian Petroleum Asssociation, 23rd Annual
A Convention, October.
3 Katz, B.JJ. and Dawson,, W.C., 1997. “Pematang-Sihapas Petroleum m System of Ceentral Sumatra..” Proceedingss of an
Internationnal Conference on Petroleum Syystems of SE Assia and Australassia, p. 685-698.
4 Hwanga, R.J., Heidrick, T., Mertanib, B.,
B and Qivayanntib, M., 2002. “Correlation annd Migration Stuudies of North C
Central
Sumatra Oils.”
O Organic Geochemistry,
G v. 33, p. 1361-13779.
5 Camell, A.,
A Butterworth, P.,
P Hamid, B., Livsey,
L A., Badon, J., and Batess, C., 1998. “Thhe Brown Shale of Central Summatra: A
Detailed Geological
G Appraaisal of a Shallow
w Lacustrine Soource Rock.” Prooceedings Indonnesian Petroleum
m Association, TTwenty-
Sixth Annual Convention, May, p. 51-69.
6 Rodriguezz, N.D. and Phip, R.P., 2012. “Productivity and
a Paleoclimattic Controls on Source Rock C
Character in thee Aman
Trough, North
N Central Sum
matra, Indonesiaa.” Organic Geoochemistry, vol. 445, p. 18-28.
7 Yuwono, R.W.,
R Fitriana, B.S.,
B Kirana, P.S S., Djaelani, S., and
a Sjafwan, B.A A., 2012. “Biogeenic Gas Exploraation and Develoopment
in Bentu PSC, Central Sumatra
S Basin, Indonesia.” Am merican Associaation of Petroleuum Geologists, Search and Disscovery
Article #100454, posted Occtober 29, 2012, 22 p.
8 Henningss, P., Allwardt, P., Paul, P., Zahm,
Z C., Reid, Jr., R., Alley,, H., Kirschner, R., Lee, B., aand Hough, E.,, 2012.
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9 Bishop, M.G.,
M 2001. “SSouth Sumatra Basin Province,, Indonesia: Th e Lahat / Talanng Akar – Cenozoic Total Pettroleum
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10 Muksin, N., Yusmen, D., Waren, R., Werdaya,
W A., andd Djuhaeni, D., 2012. “Regionaal Depositional Environment Model of
Muara Ennim Formation anda Its Significannt Implication foor CBM Prospecctivity in South S
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Associatioon of Petroleum Geologists, Seaarch and Discoveery Article #802772, posted Noveember 19, 2012, 9 p.
11 Doust, H.
H and Noble, R.A
A., 2008. “Petrooleum Systems of Marine and Petrooleum Geology, vvol. 25, p. 103-129.
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12 AWE Lim
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13 AWE Lim
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14 Curiale, J., Lin, R., and Decker, J., 20005. “Isotopic annd molecular chaaracteristics of M
Miocene-Reservvoired Oils of thee Kutei
Basin, Inddonesia.” Organnic Geochemistryy, v. 36, p. 405-4424.
15 Saller, A.,
A Lin, R., Dunhaam, J., 2006. “LLeaves in Turbiddite Sands: The Main Source off Oil and Gas in the Deep-Wateer Kutei
Basin, Inddonesia.” Americcan Association of Petroleum Geeologists, v. 90, no. 10, p. 1585--1608.
16 Ramdhaan, A.M. and Gooulty, N.R., 20111. “Overpressure and Mudrockk Compaction inn the Lower Kuttai Basin, Indonesia: A
Radical Reappraisal.”
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17 Subroto, E.A., Muritno, B.P.,

B Sukowitono, Noeradi, D., and Djuhaeni, 22005. “Petroleum Geochemistryy Study in a Seqquence
Stratigrapphic Framework in the Simengggaris Block, Tarrakan Basin, Eaast Kalimantan, Indonesia.” Prroceedings Indoonesian
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18 Doust annd Noble, 2008.
19 Phoa, R.S.K., and Samuuel, L., 1986. “PProblems of Souurce Rock Identtification in the S
Salawati Basin, Irian Jaya.” Inddonesia
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20 Gibson-R mpson, S.J., Raharjo, H.T., 19900. “Kasim and W
Robinson, C., Heenry, N.M., Thom Walio Fields-Indonesia Salawatii Basin,
Irian Jayaa.” in Beaumontt, E.A. and Fosster, N.H. (eds.)), 1990, Americcan Association of Petroleum GGeologists Treatise on
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m Geology Atlas, Oil and Gas Fieelds: Stratigraphic Traps I, p. 25 7-295.
21 Satyanaa, A.H., 2009. “Emergence off New Petroleum m System in thhe Mature Salawati Basin: Keyys From Geochhemical
Biomarkers.” Indonesia Peetroleum Associiation, 33rd Annuual Convention P
Proceedings, 211 p.
22 Casarta, L.J., Salo, J.P., Tisnawidjaja, S.,
S and Sampurno, S.T., 2004. ““Wiriagar Deep: The Frontier Disscovery That Triggered
Tangguh LNG.” in Noblee, R.A. et al (edds.), Proceedinggs Deepwater & Frontier Explooration in Asia & Australasia, JJakarta,
Indonesia Petroleum Assoociation, p. 137-157.
23 Chevallieer, B. and Bordeenave, M.L., 19886. “Contribution of Geochemisstry to the Explorration in the Binntuni Basin, Iriann Jaya.”
Indonesia Petroleum Assoociation, 15th Annnual Convention Proceedings, p. 439-460.
24 Hasanussi, D., Abimanyuu, R., Artono, E.,, and Baasir, A., 2004. “Prominnent Senoro Gass Field Discoverry in Central Sulaawesi.”
In Noble, R.A. et al. (eds.), Proceedings Deepwater
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Associatioon, p. 177-197.
25 Peters, K.E., Fraser, T.H., Amris, W., Rustanto, B., annd Hermanto, E E., 1999. “Geocchemistry of Crrude Oils from E
Eastern
Indonesia.” American Asssociation of Petrroleum Geologissts, v. 83, no. 12 , p. 1927-1942.
26 Hutchinsson, C.S., 1996. “Geological Evoolution of South--East Asia.” Geoological Society oof Malaysia, 3688 p.
27 Charlton, T.R., 2004. “T The Petroleum Potential
P of Inverrsion Anticlines iin the Banda Arcc.” American Asssociation of Pettroleum
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28 Hill, K.C
C., Hoffman, N., Lunt, P., Paul, R., 2001. “Strructure and Hyddrocarbons in thhe Sareba Block, “Bird’s Neck,,” West
Papua. Inndonesian Petroleum Association, Twenty-Eighth Annual Conveention and Exhibbition, October, vvol. 1, p. 227-2488.
29 Panggabbean, H. and Heeryanto, R., 20099. “An Appraisaal for the Petroleeum Source Roccks on Oil Seepp and Rock Sam
mples of
the Tertiary Seblat and Leemau Formations, Bengkulu Bassin.” Jurnal Geoologi Indonesia, vvol.4, p. 43-55.
30 Zaim, Y., Habrianta, L.,, Abdullah, C.I., Aswan, Rizal, Y., Basuki, N.I. , and Sitorus, FF.E., 2012. “Deepositional Histoory and
Petroleumm Potential of Om
mbilin Basin, Weest Sumatra - Inndonesia, Basedd on Surface Geeological Data.” American Assoociation
of Petroleum Geologists, Search and Disccovery Article #110449, posted O
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31 Doust annd Noble, 2008.
32 Bishop, M.G.,
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33 Witts, D., Hall, R., Nichols, G., and Morleey, R., 2012. “A
A New Depositionnal and Provenaance Model for tthe Tanjung Form
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Barito Bassin, SE Kalimanttan, Indonesia.” Journal of Asian Earth Sciencees, vol. 56, p. 77--104.
34 Koning, T., 2003. “Oil and
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35 Siregar, M.S. and Sunaaryo, R., 1980. “Depositional Environment
E andd Hydrocarbon Prospects, Tanjjung Formation,, Barito
Basin, Kalimantan.” Indonnesia Petroleum
m Association, 9th Annual Conveention Proceedinngs, p. 379-400.
June, 2013 XXIII-25

XXIV. India/Pakistan EIA/ARI World Shale Gas and Shale Oil Resource Assessment
XXIV. INDIA/PAKISTAN
SUMMARY
India and Pakistan contain numerous basins with organic-rich shales. For India, the
study assessed four priority basins: Cambay, Krishna-Godavari, Cauvery and Damodar Valley.
The study also screened other basins in India, such as the Upper Assam, Vindhyan, Pranhita-
Godavari, Rajasthan and South Rewa. However, in these basins the shales were thermally too
immature or the data for conducting a rigorous resource assessment were not available. For
Pakistan, the study addressed the areally extensive Indus Basin, Figure XXIV-1.
Figure XXIV-1. Shale Gas and Shale Oil Basins of India/Pakistan
June, 2013 XXIV-1

Overall, ARI estimates a total of 1,170 Tcf of risked shale gas in-place for India/Pakistan,
584 Tcf in India and 586 Tcf in Pakistan. The risked, technically recoverable shale gas resource
is estimated at 201 Tcf, with 96 Tcf in India and 105 Tcf in Pakistan, Tables XXIV-1A and XXIV-
1B. In addition, we estimate risked shale oil in-place for India/Pakistan of 314 billion barrels,
with 87 billion barrels in India and 227 billion barrels in Pakistan. The risked, technically
recoverable shale oil resource is estimated at 12.9 billion barrels for these two countries, with
3.8 billion barrels for India and 9.1 billion barrels for Pakistan, Table XXIV-2A and XXIV-2B.
Table XXIV-1A. Shale Gas Reservoir Properties and Resources of India

Cambay Krishna-Godavari Cauvery Damodar Valley
Basin/Gross Area
Basic Data
2 2 2 2
(7,900 mi ) (7,800 mi ) (9,100 mi ) (2,270 mi )
Shale Formation Cambay Shale Permian-Triassic Sattapadi-Andimadam Barren Measure
Geologic Age U. Cretaceous-Tertiary Permian-Triassic Cretaceous Permian-Triassic
2
Prospective Area (mi ) 1,060 300 580 1,100 3,900 3,000 1,010 1,080
Physical Extent
Organically Rich 1,500 1,500 1,500 330 500 1,300 1,000 1,000
Thickness (ft)
Net 500 500 500 100 150 390 500 250
Interval 6,000 - 10,000 10,000 - 13,000 13,000 - 16,400 4,000 - 6,000 6,000 - 10,000 10,000 - 16,400 7,000 - 13,000 3,300 - 6,600
Depth (ft)
Average 8,000 11,500 14,500 5,000 8,000 13,000 10,000 5,000
Mod. Mod. Mod.
Reservoir Pressure Normal Normal Normal Normal Slightly Overpress.
Properties
Reservoir

Average TOC (wt. %) 2.6% 2.6% 2.6% 6.0% 6.0% 6.0% 2.3% 3.5%
Thermal Maturity (% Ro) 0.85% 1.15% 1.80% 0.85% 1.15% 1.50% 1.15% 1.20%
Clay Content Low/Medium Low/Medium Low/Medium High High High High High
Gas Phase Assoc. Gas Wet Gas Dry Gas Assoc. Gas Wet Gas Dry Gas Wet Gas Wet Gas
Resource
2
GIP Concentration (Bcf/mi ) 55.9 170.5 228.0 6.9 57.8 204.7 119.6 62.9
Risked GIP (Tcf) 35.5 30.7 79.4 3.4 101.4 276.4 30.2 27.2
Risked Recoverable (Tcf) 3.6 6.1 19.8 0.2 15.2 41.5 4.5 5.4
Table XXIV-1B. Shale Gas Reservoir Properties and Resources of Pakistan

Lower Indus
Basin/Gross Area
Basic Data
2
(169,000 mi )
Shale Formation Sembar Ranikot
Geologic Age L. Cretaceous Paleocene
2
Physical Extent

Thickness (ft)
Net 250 250 250 200
Interval 4,000 - 6,000 6,000 - 10,000 10,000 - 16,400 6,000 - 13,000
Depth (ft)
Average 5,000 8,000 13,000 9,000
Properties
Reservoir
Average TOC (wt. %) 2.0% 2.0% 2.0% 2.0%

Clay Content Low Low Low Low
Gas Phase Assoc. Gas Wet Gas Dry Gas Assoc. Gas
Resource
2
Risked GIP (Tcf) 45.9 174.7 310.8 54.8
June, 2013 XXIV-2

Table XXIV-2A. Shale Oil Reservoir Properties and Resources of India

Cambay Krishna-Godavari Cauvery Damodar Valley
Basic Data
2 2
(7,900 mi ) (7,800 mi ) (9,100 mi ) (2,270 mi )
Shale Formation Cambay Shale Permian-Triassic Sattapadi-Andimadam Barren Measure
Geologic Age U. Cretaceous-Tertiary Permian-Triassic Cretaceous Permian-Triassic
2
Prospective Area (mi ) 1,060 300 1,100 3,900 1,010 1,080
Physical Extent
Organically Rich 1,500 1,500 330 500 1,000 1,000

Thickness (ft)
Net 500 500 100 150 500 250
Interval 6,000 - 10,000 10,000 - 13,000 4,000 - 6,000 6,000 - 10,000 7,000 - 13,000 3,300 - 6,600
Depth (ft)
Average 8,000 11,500 5,000 8,000 10,000 5,000
Mod. Mod.
Reservoir Pressure Normal Normal Normal Slightly Overpress.
Properties
Reservoir
Average TOC (wt. %) 2.6% 2.6% 6.0% 6.0% 2.3% 3.5%
Clay Content Low/Medium Low/Medium High High High High
Oil Phase Oil Condensate Oil Condensate Condensate Condensate
Resource
2
OIP Concentration (MMbbl/mi ) 79.8 19.2 17.5 6.5 30.2 12.1
Risked OIP (B bbl) 50.8 3.5 8.7 11.5 7.6 5.2
Risked Recoverable (B bbl) 2.54 0.17 0.26 0.34 0.23 0.21
Table XXIV-2B. Shale Oil Reservoir Properties and Resources of Pakistan

Lower Indus
Basin/Gross Area 2
Basic Data
(169,000 mi )
Shale Formation Sembar Ranikot
Geologic Age L. Cretaceous Paleocene
2
Physical Extent
Organically Rich 1,000 1,000 1,000

Thickness (ft)
Net 250 250 200
Interval 4,000 - 6,000 6,000 - 10,000 6,000 - 13,000
Depth (ft)
Average 5,000 8,000 9,000
Properties
Reservoir
Average TOC (wt. %) 2.0% 2.0% 2.0%

Clay Content Low Low Low
Oil Phase Oil Condensate Oil
Resource
2
Risked OIP (B bbl) 117.4 27.9 81.7
June, 2013 XXIV-3

INTRODUCTION
Evaluating the shale gas and oil resources of India and Pakistan posed a series of
challenges. Only limited publically available data exist on the geologic setting and reservoir
properties of the numerous shale formations in India and Pakistan. In addition, the shale basins
in these two countries are geologically highly complex.
Many of the basins in India, such as the Cambay and the Cauvery, comprised a series of
extensively faulted horst and graben structures. As such, the prospective areas for shale gas
and oil in these basins are often restricted to a series of isolated basin depressions (sub-
basins). While the shales in these basins are thick, considerable uncertainty exists on the areal
extents of the prospective areas in these basins. To account for this uncertainty, we have
applied prospective area risk factors to each basin. Figures XXIV-2 shows the stratigraphic
column for the key basins of India.
Recently, ONGC drilled and completed India’s first shale gas well, RNSG-1, northwest of
Calcutta in West Bengal. The well was drilled to a depth of 2,000 meters and reportedly had
gas shows at the base of the Permian-age Barren Measure Shale. Two vertical wells (Well D-A
and D-B) were previously tested in the Cambay Basin and had modest shale gas and oil
production from the Cambay Black Shale.1
In Pakistan, the shale gas and oil assessment is restricted to the areally extensive
Central and Southern Indus basins, together called the Lower Indus Basin. The shales in this
basin have sourced the significant volumes of conventional oil and gas discovered and
produced in Pakistan. However, to date, no shale specific exploration has been publically
reported for Pakistan. Figure XXIV-3 provides the stratigraphic column for the key basins of
Pakistan.
Fortunately, the technical literature on conventional oil and gas exploration in India and
Pakistan often contains information on the nature of the source rocks that have charged the
conventional gas and oil reservoirs, providing a valuable starting point for this resource
assessment. As additional shale-directed geological and reservoir information is collected and
distributed, a more rigorous assessment of India’s and Pakistan’s shale oil and gas resources
will emerge.
June, 2013 XXIV-4

Figure XXIV-2. Stratigraphic Column for India

INDIA BASINS
BASIN CAMBAY KRISHNA GODAVARI CAUVERY DAMODAR VALLEY UPPER ASSAM
Holocene
QUATERNARY
Pleistocene Gujarat Alluvium Alluvium
Jambusar Fm Tittacheri Sandstone
Pliocene Dhekiajuli Fm
Broach Fm
Jhagadia Fm Namsang Fm
Kand Fm Madanam Limestone
Miocene Girujan Fm
Babaguru Fm Vanjiyur Sandstone
Tipam Fm
Tarkesvar Fm Shiyali Surma Member
Dadhar Fm/ Kovikalappal Fm
Oligocene Undifferentiated
CENOZOIC
Tarapur Shale Niravi Sandstone Moran Fm

Barail Group
Tinali Fm
TERTIARY Kalol Fm Pandanallur Fm
Kopili Fm
Eocene Karaikal Shale
Younger
Kadi Fm Prang Member
Cambay Shale U. Kamalapuram Fm Narpuh Member
Sylhet Fm
Lakadong
Member
Older Cambay Shale
Paleocene L. Kamalapuram Fm
Razole Langpar Fm
Olpad Fm
Porto-Novo Shale
Tirupati Sandstone
Upper Nannilam Fm Rajmahal Traps
Kudavasal Shale
CRETACEOUS Deccan Traps Basement
Raghavapuram Shale Bhuvanagiri Fm
MESOZOIC
Lower Sattapadi Shale Supra-Panchet Fm

Gollapalli Fm Andimadam Fm
JURASSIC Upper Red Bed Dubrajpur Fm
TRIASSIC Mandapeta Fm Panchet Fm
Raniganj Fm
Kommugudem Fm
PALEOZOIC
Barren Measures
PERMIAN
Barakar Fm
Draksharama Fm
Talchir
PROTEROZOIC
PRECAMBRIAN Basement Basement Basement
June, 2013 XXIV-5

Figure XXIV-3. Stratigraphic Column for Pakistan

PAKISTAN BASINS
BASIN SOUTHERN INDUS CENTRAL INDUS NORTHERN INDUS BALOCHISTAN
Ormara
QUATERNARY Pleistocene
Siwaliks Siwaliks Chatti
Pliocene Talar/Hinglas
Kamlial Parkini
Miocene Gaj Gaj
Murree Panjgur
Hoshab
CENOZOIC
Oligocene Nari Nari Siahan

Amalaf
TERTIARY
Kirthar Kirthar Wakai
Eocene Ghazij/ Sakaser Kohat Saindak
Baska/Laki Kharan
Nummal Kuldana
Dunghan Dunghan Patala Ispikan
Paleocene Ranikot Lockhart
Ranikot Rakhshani
Khadro Hangu
Pab Pab
Upper Mughal Kot Mughal Kot Kawagarh Humai
Parh Parh
CRETACEOUS
Goru Goru
Lumshiwal
Lower Sinjrani
Sembar Sembar
Chichali
Upper Takatu/Chiltan
Samana Suk
MESOZOIC
Middke Samana Suk

JURASSIC Lorolai/Datta
Shinawari Shinawari
Lower
Shirinab
Data Data
Upper Kingriali
Kingriali
TRIASSIC Wulgai/Alozai Tredian Tredian
Middke
Mianwali
Mianwali
Lower Chidru
Wargal
Zaluch
Sardhai
PERMIAN Warcha
Nilawhan
PALEOZOIC
Dandot
Tobra
Baghanwala Baghanwala
CAMBRIAN Juttana Juttana Juttana
Kussak Kussak
Khewra
Khewra
PROTEROZOIC
Khewra
PRECAMBRIAN Salt Range Salt Range Salt Range

Jodhpur Jodhpur
Basement Basement Basement
June, 2013 XXIV-6

1. CAMBAY BASIN, INDIA
The Cambay Basin is an elongated, intra-cratonic Late Cretaceous to Tertiary rift basin,
located in the State of Gujarat in northwest India. The basin includes four assessed fault
blocks: Mehsana-Ahmedabad, Tarapur, Broach and Narmada, Figure XXIV-4.
Figure XXIV-4. Depth of Cambay Black Shale, Cambay Basin
June, 2013 XXIV-7

The Cambay Basin is bounded on its eastern and western sides by basin-margin faults
and extends south into the offshore Gulf of Cambay, limiting its onshore area to 7,900 mi2.2
The Deccan Trap, composed of horizontal lava flows, forms the basement of the
Cambay Basin. Above the Deccan Trap, separated by the Olpad Formation, is the Late
Paleocene and Early Eocene Cambay Black Shale, Figure XXIV-5.3 The Cambay Black Shale
represents the marine transgressive episode in the basin. With a thermal maturity ranging from
about 0.7% to 2%, the shale is in the oil, wet gas and dry gas windows.4 For purposes of this
study, we have assumed that the oil window starts at 6,000 feet of depth, that the wet gas
window starts at 11,000 feet, and that the dry gas window is below 13,000 feet of depth, Figures
XXIV-6 and XXIV-7.
Figure XXIV-5. Generalized Stratigraphic Column of the Cambay Basin.
Source: Silvan, 2008
June, 2013 XXIV-8

Figure XXIV-6. Cross Section of Cambay Black Shale System
Source: Shishir Kant Saxena, 2007
Figure XXIV-7. N-S Geological Cross-Section Across Cambay Basin
Source: P.K. Bhowmick and Ravi Misra, Indian Oil and Gas Potential, Glimpses of Geoscience Research in India.
June, 2013 XXIV-9

The Cambay Basin contains four primary fault blocks, from north to south: (1) Mehsana-
Ahmedabad; (2) Tarapur; (3) Broach; and (4) Narmada (Sivan et al., 2008).3 Three of these
blocks appear to have sufficient thermal maturity to be prospective for shale gas and oil, Table
XXIV-3.5
Table XXIV-3. Major Fault Blocks and Shale Prospectivity of Cambay Basin
Fault Blocks Comments
1. Mehsana-Ahmedabad Prospective for Shale Oil
2. Tarapur Prospective for Shale Oil and Wet Gas
3. Broach Prospective for Shale Oil and Wet/Dry Gas
4. Narmada Insufficient Data, Likely Immature
 Mehsana-Ahmedabad Block. Three major deep gas areas (depressions) exist in the
Mehsana-Ahmedabad Block - - the Patan, Worosan and Wamaj. A deep well, Well-A, was
drilled in the eastern flank of the Wamaj Low to a depth of nearly 15,000 ft, terminating
below the Cambay Black Shale. In addition, a few wells were recently drilled to the Cambay
Black Shale in the axial part of the graben low. A high-pressure gas zone was encountered
in the Upper Olpad section next to the Cambay Shale, with methane shows increasing with
depth. Geochemical modeling for this fault block indicates an oil window at 6,600 ft, a wet
gas window at 11,400 ft, and a dry gas window at 13,400 ft.6
 Broach and Tarapur Blocks. The deeper Tankari Low in the Broach Block and the
depocenter of the Tarapur Block appear to have similar thermal histories as the Mehsana-
Ahmedabad Block. As such, we assumed these two areas have generally similar shale gas
and oil properties as the Cambay Black Shale in the Mehsana-Ahmedabad Block.
The depth of the prospective area of the Cambay Black Shale ranges from about 6,000
ft in the north to 16,400 ft in the lows of the southern fault blocks, averaging 8,000 ft in the oil
prospective area, 11,500 ft in the wet gas and condensate prospective area, and 14,500 ft in the
dry gas prospective area. Thermal gradients are high, estimated at 3oF per 100 feet,
contributing to accelerated thermal maturity of the organics. 7 The Cambay Black Shale interval
ranges from 1,500 to more than 5,000 ft thick in the various fault blocks.8 In the northern
June, 2013 XXIV-10

Mehsana-Ahmedabad Block, the Kadi Formation forms an intervening 1,000-ft thick non-marine
clastic wedge within the Cambay Black Shale interval. In this block, the shale thickness varies
from 300 to 3,000 ft, with the organic-rich shale thickness, located in the lower portion of the
Cambay Black Shale interval, averaging 500 net ft, Figure XXIV-8.
The organic matter in the shale is primarily Type II and Type III (terrestrial) with a TOC
that ranges from 2% to 4%, averaging 2.6%, Figure XXIV-9. The shale formation is moderately
over-pressured and has low to medium clay content.
Within the overall 1,940-mi2 Cambay Black Shale prospective area in the Cambay Basin,
we estimate: a 580-mi2 area prospective for dry gas; a 300-mi2 area prospective for wet gas and
condensate; and a 1,060-mi2 area prospective for oil, Figure XXIV-10.
The Cambay Black Shale has resource concentrations of: 228 Bcf/mi2 of shale gas in its
580-mi2 dry gas prospective area; 170 Bcf/mi2 of wet gas and 19 million barrels/mi2 of
condensate in the 300-mi2 wet gas/condensate prospective area; and 80 million barrels/mi2 of
shale oil (plus associated gas) in the 1,060-mi2 oil prospective area.
Within the overall 1,940-mi2 prospective area for the Cambay Black Shale in the Cambay
Basin, we estimate a risked resource in-place of 146 Tcf for shale gas and 54 billion barrels for
shale oil. Based on moderate to favorable reservoir properties, we estimate that the Cambay
Black Shale has 30 Tcf of risked, technically recoverable shale gas and 2.7 billion barrels of
risked, technically recoverable shale oil, Tables XXIV-1A and XXIV-2A.
1.4 Recent Activity
Although the shales in the Cambay Basin have been identified as a priority by India, no
plans for exploring these shales have yet been publically announced. However, two shallower
conventional exploration wells (targeting the oil-bearing intervals in the basin) penetrated and
tested the Cambay Black Shale. Well D-A, a vertical well, had gas shows in a 90-ft section of
the Cambay Basin at a depth of about 4,300 ft. After hydraulic stimulation, Well D-A produced
13 bbl/day of oil and 11 Mcfd of gas. Well D-B, an older vertical well drilled in 1989 to a depth of
6,030 ft, also encountered the Cambay Shale at about 4,300 ft. The well was subsequently
hydrofractured and produced 13 bbl/day of oil and 21 Mcfd of gas.
June, 2013 XXIV-11

Figure XXIV-8. Gross Thickness of Cambay Black Shale, Cambay Basin
June, 2013 XXIV-12

Figure XXIV-9. Organic Content of Cambay “Black Shale”, Cambay Basin
June, 2013 XXIV-13

Figure XXIV-10. Prospective Areas of the Cambay Black Shale, Cambay Shale Basin
June, 2013 XXIV-14

2. KRISHNA-GODAVARI BASIN, INDIA
The Krishna-Godavari Basin covers a 7,800-mi2 onshore area of eastern India, Figure
XXIV-11.9 The basin contains a series of organic-rich shales, including the Permian-age
Kommugudem Shale and the Triassic-age Mandapeta Shale. For purposes of this assessment,
these two shales have been combined into the Permian-Triassic Shale. With thermal maturities
ranging from 0.7% to 2% Ro, these shales are in the oil to dry gas windows. The Upper
Cretaceous Raghavapuram Shale may also have potential but was not assessed by this study.
Figure XXI-11. Krishna-Godavari Basin’s Onshore Horsts and Grabens
Source: Murthy, 2011.
June, 2013 XXIV-15

Permian-Triassic Shale. The Kommugudem Shale, the lower unit of the Permian-
Triassic Shale, is a thick Permian-age rock interval containing alternating sequences of
carbonaceous shale, claystone, sand and coal, Figure XXIV-12. The Mandapeta Graben, the
most extensively explored portion of the Krishna-Godavari Basin, provides much of the geologic
and reservoir characterization data for this basin.10
Figure XXIV-12. Stratigraphic Column, Mandapeta Area, Krishna Godavari Basin
Source: Kahn, 2000.
June, 2013 XXIV-16

The Kommugudem Shale was deposited in fluvial, lower deltaic, and lacustrine
environments. While an effective source rock with excellent organic richness, analysis of the
shale indicates hydrogen-deficient organic matter (based on low S2 values from pyrolysis) and
high levels of primary inertinite.
The basal shale in the Mandapeta Formation, the upper unit of the Permian-Triassic
Shale, is a localized, thermally mature (Ro of 0.8% to 1.1%) Triassic-age shale that is
considered the source rock for the oil produced from the overlying Early Cretaceous Golapalli
Sandstone. The Mandapeta Formation and its basal shale are present in the Mandapeta and
Bantumilli grabens but are absent in the Poduru-Yanam High (Draksharama and Endamuru
areas) to the east. While the TOC of the Mandapeta Shale is generally low, 0.4% to 1.6%, we
have included this Triassic shale unit into the overall Permian-Triassic sequence.
Vitrinite reflectance of the Permian-Triassic Shale in the deep graben structures ranges
from 0.7% to 2% Ro, placing the shale in the oil to dry gas windows. Figure XXIV-13 illustrates
the relationship of shale depth and geologic age in the Krishna-Godavari Basin to the thermal
maturity (Ro) in two of the graben structures, Kommugudem (KMG) and Mandapeta (MDP).
Figure XXIV-13. Cross Section for Permian-Triassic Shale, Krishna Godavari Basin
Source: Kahn, 2000.
June, 2013 XXIV-17

In the prospective area of the Krishna-Godavari Basin, the depth of the Permian-Triassic
Shale ranges from 4,000 to 16,400 ft, averaging 5,000 ft in the oil prospective area, 8,000 ft in
the wet gas and condensate prospective area, and 13,000 ft in the dry gas prospective area.
To better understand the source rock quality of the Permian-Triassic Shale, 140 m of
shale was tested in 10 wells. The data showed the TOC of the shale ranges up to 11%,
averaging 6%, for ten rock samples taken at various depths, Table XXIV-4.
Table XXIV-4. Analysis of Ten Rock Samples, Kommugudem Shale11

Depth TOC Shale
Well S2*
(m) (%) Interval Tested (m)
AA-1 3,320-3,880 10.4 7.0 110
AA-2 3,585-3,630 4.2 2.9 45
AA-9 3,330-3,360 7.1 6.4 30
AA-10 3,880-3,920 3.1 0.6 40
AA-11 2,890-3,150 7.0 7.9 260
BW-1A 3,915-4,250 5.6 0.8 335
BW-2 2,970-3,085 8.8 5.5 115
BW-2 3,100-3,175 7.8 6.0 75
BW-9 2,800-3,040 11.2 6.9 315
DE-1 1,900-2,040 8.9 13.9 120
*Volume of hydrocarbon cracked from kerogen by heating to 550oC, measured in terms of mg hydrocarbon/g rock.
The thickness of the shale ranges from 330 to 1,300 ft, with 100 to 390 ft of net organic-
rich shale, depending on prospective area. The pressure gradient of the Permian-Triassic
Shale is normal. The reservoir is inferred to have moderate to high clay content based on its
lacustrine deposition. We mapped an 8,000-mi2 prospective area for the Permian-Triassic Shale
in the Krishna-Godavari Basin which encompasses the oil, wet gas/condensate and dry gas
windows.
Raghavapuram Shale. The Cretaceous-age Raghavapuram Shale offers an additional

potential shale resource in the Krishna-Godavari Basin. The TOC of this shale unit ranges from
0.8% to 6.4%, with the lower HG-HR Shale interval of the Raghavapuram Formation having the
higher TOC values, Figures XXIV-1412 and XXIV-15.12 The shale becomes thermally mature for
oil (Tmax 440 to 475o C) at depth below 10,600 ft.21
June, 2013 XXIV-18

Figure XXIV-14. TOC Cross-Section for Raghavapuram Shale, Krishna-Godavari Basin
Source: Prasad, I.V.S.V., 2012.
Figure XXIV-15. TOC Isopach for Raghavapuram Shale, Krishna-Godavari Basin
Source: Prasad, I.V.S.V., 2012.
June, 2013 XXIV-19

However, the great bulk of the Cretaceous Raghavapuram Shale is shallower than
10,600 ft and thus has a thermal maturity (Ro) value less the 0.7% minimum threshold used by
this study. In addition, the data on the area and vertical distribution of the Raghavapuram Shale
is limited. Thus, this shale has not been included in the quantitative portion of our shale
resource assessment.
The 8,000-mi2 prospective area of the Permian (Kommugudem) and Triassic

(Mandapeta) Shale in the Krishna-Godavari Basin is limited to the four grabens (sub-basins)
shown in Figure XXIV-16. The Permian-Triassic Shale has resource concentrations of: 205
Bcf/mi2 in the 3,000-mi2 dry gas prospective area; 58 Bcf/mi2 of wet gas and 6 million barrels/mi2
of condensate in the 3,900-mi2 wet gas/condensate prospective area; and 18 million/mi2 barrels
of oil (plus associated gas) in the 1,100-mi2 oil prospective area.
Within the overall prospective area, the Permian-Triassic Shale of the Krishna-Godavari
Basin has risked shale gas in-place of 381 Tcf, with 57 Tcf as the risked, technically recoverable
shale gas resource. In addition, we estimate a risked shale oil in-place for this basin of 20
billion barrels, with 0.6 billion barrels as the risked, technically recoverable shale oil resource,
Tables XXIV-1A and XXIV-2A.
2.4 Recent Activity
The technical literature discusses 16 wells that have been drilled at the Mandapeta
Graben into or through the Permian-Triassic Shale in search for hydrocarbons in conventional
Mandapeta and Gollapalli sandstone reservoirs. The information from these 16 wells has
provided valuable data for the key cross-sections and other reservoir properties essential for the
shale resource assessment study of the Krishna-Godavari Basin.
June, 2013 XXIV-20

Figure XXIV-16. Prospective Areas for Shale Gas and Shale Oil, Krishna-Godavari Basin
June, 2013 XXIV-21

3. CAUVERY BASIN, INDIA
The Cauvery Basin covers an onshore area of about 9,100 mi2 on the east coast of
India, Figure XXIV-17. The basin comprises numerous horsts and grabens, with thick organic-
rich source rocks in the Lower Cretaceous Andimadam Formation and Sattapadi Shale.
Figure XXIV-17. Cauvery Basin Horsts and Grabens
June, 2013 XXIV-22

The gas- and oil-prone shale source rocks in the Cauvery Basin are the Lower
Cretaceous Andimadam Formation and the Sattapadi Shale, Figure XXIV-18. The shale
resource prospective area of the Cauvery Basin is limited to four depressions (troughs) - -
Nagapattnam, Tranquebar, Ariyalur-Pondicherry and Thanjavur - - and the Mannar Sub-basin.
The source rocks are generally shallow marine Type III with some Type II kerogen. The
thermally mature source rocks in the shallower Sattapadi Shale and the deeper Andimadam
Formation contain thermogenic wet gas and condensate.13
Figure XXIV-18. Generalized Stratigraphy, Cauvery Basin15
Source: Rao, 2010.
June, 2013 XXIV-23

We have identified a 1,010-mi2 wet gas and condensate prospective area for the shales
in the Cauvery Basin. The thickness of the Lower Cretaceous interval is 3,000 to 5,000 ft, with
the Andimadam Formation and the Sattapadi Shale accounting for the bulk of the gross interval,
Figure XXIV-19. The TOC of the combined Andimadam/Sattapadi Shale is estimated at 2% to
2.5%, averaging 2.3%. The organic shales are distributed irregularly over the Cauvery Basin,
Figure XXIV-20.
Figure XXIV-19. Formation Thickness, Cauvery Basin
Source: P.K. Bhowmick and Ravi Misra, Indian Oil and Gas Potential, Glimpses of Geoscience Research in India
June, 2013 XXIV-24

Figure XXIV-20. Shale Isopach and Presence of Organics, Cauvery Basin
June, 2013 XXIV-25

The Cauvery Basin contains a series of depressions (sub-basins) that hold potential for
shale gas. Two of these - - Ariyalur-Pondicherry and Thanjavur - - contain thick, thermally
mature shales.
 Ariyalur-Pondicherry Sub-Basin. The Ariyalur-Pondicherry Depression (Sub-basin) is in

the northern portion of the Cauvery Basin. The Lower Cretaceous Andimadam and
Sattapadi Shale encompasses a thick interval at a depth of 7,000 to 13,000 ft, averaging
10,000 ft. Organic-rich gross pay thickness is 1,000 ft with net pay of about 500 ft. The
thermal maturity of 1.0% to 1.3% Ro places the shale in the wet gas and condensate
window. The onshore prospective area of this sub-basin is estimated at 620 mi2, Figure
XXIV-21.
 Thanjavur Sub-Basin. The Thanjavur Depression (Sub-basin), in the center of the Cauvery
Basin, has a thick section of Andimadam and Sattapadi Shale at a depth of 7,000 ft (top of
Sattapadi Shale) to 13,000 ft (base of Andimadam Fm), averaging 9,500 ft deep, Figure
XXIV-22. The organic-rich average net pay thickness is 500 ft.15 Given limited data, we
assume the TOC and thermal maturity for the shale in this sub-basin is the same as in the
Ariyalur-Pondicherry Sub-basin. The onshore prospective area with thick organic-rich shale
is small, estimated at 390 mi2, Figure XXIV-21.
In the 1,010-mi2 prospective area of the Cauvery Basin, the combined Andimadam
Formation and Sattapadi Shale have an average wet shale gas resource concentration of 120
Bcf/mi2 and a shale condensate resource concentration of 30 million barrels/mi2.
For the combined Andimadam Formation and Sattapadi Shale in the Cauvery Basin, we
estimate risked shale gas in-place of 30 Tcf and risked shale oil in-place of 8 billion barrels. Of
this, 5 Tcf of shale gas and 0.2 billion barrels of shale oil are the risked, technically recoverable
shale resources.
3.4 Recent Activity
We are not aware of any shale gas or oil development in the Cauvery Basin.
June, 2013 XXIV-26

Figure XXIV-21. Prospective Areas for Shale Gas and Shale Oil, Cauvery Basin
June, 2013 XXIV-27

Figure XXIV-22. East to West Cross-Section Across Cauvery Basin.15
Source: Rao, 2010.
June, 2013 XXIV-28

4. DAMODAR VALLEY BASIN, INDIA
The Damodar Valley Basin is part of a group of basins collectively named the
“Gondwanas”, owing to their similar dispositional environment and Permo-Carboniferious
through Triassic deposition. The “Gondwanas,” comprising the Satpura, Pranhita-Godavari,
Son-Mahanadi and Damodar Valley basins, were part of a system of rift channels in the
northeast of the Gondwana super continent. Subsequent tectonic activity formed the major
structural boundaries of the Gondwana basins, notably the Damodar Valley Basin, Figure XXIV-
23.
Figure XXIV-23. Damodar Valley Basin and Prospectivity for Shale Gas and Shale Oil
June, 2013 XXIV-29

Sedimentation in the Early Permian was primarily glacial-fluvial and lacustrine, resulting
in significant deposits of coal. As such, the majority of exploration in the Damodar Valley has
focused on the coal resources of the basin, which account for much of India’s coal reserves.
However, a marine incursion deposited a layer of early Permian Shale, called the Barren
Measure Shale in this basin, Figure XXIV-2414. This shale formation was the target of India’s
first shale gas exploration well in the eastern portion of the Damodar Valley. Though present in
other Gondwana basins, such as the Rewa Basin, in central India, data suggest that the Barren
Measure Shale is only thermally mature in the Damodar Valley Basin.15
Figure XXIV-24. Regional Stratigraphic Column of the Damodar Valley Basin, India16.
1 Kilometer
Depth Line
Barren Measure
Source: Chakraborty, Chandan, 2003.
The Damodar Valley Basin comprises a series of sub-basins (from west to east) - - the
Hutar, Daltonganj, Auranga, Karanpura, Ramgarh, Bokaro, Jharia and Raniganj. Though these
sub-basins share a similar geologic history, tectonic events and erosion since the early Triassic
have caused extensive variability in the depth and thickness of the Barren Measure Shale in
these basins.
June, 2013 XXIV-30

Because exploration has focused on the coal deposits within the Damodar Valley Basin,
relatively little geologic data is available on the Barren Measure Shale. Thermal maturity data on
coals adjoining the Barren Measure Shale suggest that the shale is within the wet
gas/condensate (Ro of 1.0% to 1.3%) window, and regional studies have shown favorable TOC,
with average values of 3.5%.
Present-day burial depth and lower pressures are the main limitations for the shale gas
and condensate prospectively of the Barren Measure Shale in the Damodar Valley Basin. In
some sub-basins, regional erosion has removed up to 3 kilometers of overlying sediments.
Based on the regional stratigraphic column, Figure XXIV-25,17 and operator data, the
overall 1,080-mi2 prospective area for the Barren Measure Shale in the Damodar Valley is
limited to the Bokaro, Karanpura and Raniganj sub-basins.
The prospective areas within the Bokaro (110 mi2) and Raniganj (650 mi2) sub-basins
are limited by surface outcrops of formations of the Barren Measure Shale to the west and
north, respectively. We have estimated a 320-mi2 prospective area for the northern half of the
Karanpura Basin, based on statements by Schlumberger and ONGC.18
Absent data on thermal maturity and organic content specific to each of the three sub-
basins, we assigned average published reservoir property values to these three sub-basins.
TOC is assumed to range between 3% and 6% averaging 3.5%, based on information from
INOC and ESSAR.19,20 Thermal maturity was estimated from the coal formations surrounding
the Barren Measure Shale, indicating values of 1.1% to 1.3% Ro, placing the shale within the
wet gas/condensate window.21 Depth to the Barren Measure Shale averages about 5,000 ft,
based on reports from the shale gas well drilled into the Raniganj sub-basin and from regional
cross sections, Figure XXIV-26. We estimate a weighted average gross interval thickness in the
three prospective sub-basins of about 2,000 ft, of which about 1,000 ft is organic-rich and 250 ft
is net shale.17
June, 2013 XXIV-31

Figure XXIV-25. Generalized Stratigraphic Column of the Gondwana Basin.
Source: Veevers, J., 1995
June, 2013 XXIV-32

Figure XXIV-26. Raniganj Sub-Basin Cross Section.22
A A’
Barren Measure Shale
Source: Ghosh, S. C, 2002.
Using the geologic characteristics discussed above, we estimate that the Barren
Measure Shale in the Damodar Valley Basin has a wet shale gas resource concentration of 63
Bcf/mi2 and a shale condensate resource concentration of 12 million barrels/mi2.
Risked shale gas in-place is estimated at 27 Tcf, with the prospect area risk factor
recognizing the significant faulting present in the basin. We estimate 5 Tcf of risked shale gas
may be technically recoverable from the Barren Measure Shale in the Damodar Valley Basins.
In addition, we estimate risked shale oil in-place of 5 billion barrels, with 0.2 billion barrels as the
risked, technically recoverable shale oil resource.
June, 2013 XXIV-33

4.4 Recent Activity
Along with the Cambay Basin, the Damodar Valley Basin has been set as a priority
basin for shale gas exploration by the Indian government. In late September 2010, Indian
National Oil and Gas Company (ONGC) spudded the country’s first shale gas well, RNSG-1, in
the Raniganj sub-basin of the Damodar Valley. The well was completed mid-January 2011,
having reportedly encountered gas flows from the Barren Measure Shale at approximately
5,600 ft. Detailed well test and production results are not publicly available. This well was the
first of a proposed four-well R&D program in the basin. The plan calls for an additional well to be
drilled in the Raniganj sub-basin and for two wells to be drilled in the Karanpura sub-basin.
June, 2013 XXIV-34

5. OTHER BASINS, INDIA
5.1 Upper Assam Basin
The Upper Assam Basin is an important onshore petroleum province in northeast India.
The basin has produced oil and some associated gas, mainly from the Upper Eocene-Oligocene
Barail Group of coals and shales. In general, the TOC in the lower source rocks ranges from
1% to 2% but reaches 10% in the Barail Group. These source rocks are in the early thermal
maturity stage (beginning of the oil window) in the bulk of the Upper Assam Basin.23 Although
the shales may reach thermal maturity for oil and gas generation in the deeper parts of the
basin, toward the south and southwest, no data confirming this assumption exists in the public
domain. The reported thermal maturity of the Barail Group Shale ranges from Ro of 0.5% to
0.7%, placing these shales as immature for oil.24 While the shale may reach the oil and wet gas
window in the very deepest portion of the basin, the measured vitrinite reflectance is reported at
only 0.7% at a depth of 14,800 ft.25
5.2 Pranhita-Godavari Basin
The Pranhita-Godavari Basin, located in eastern India, contains thick, organic-rich

shales in Permian-age Jai Puram and Khanapur formations. While the kerogen is Type III
(humic) and thus favorable for gas generation, the 0.67% Ro indicates that the shales are
thermally immature.
5.3 Vindhyan Basin
The Vindhyan Basin, located in north-central India, contains a series of Proterozoic-age

shales. While certain of these shales, such as the Hinota and Pulkovar, appear to have
sufficient organic richness, no public data exists on their thermal maturity.
5.4 Rajasthan Basin
The Rajasthan Basin covers a large onshore area in northwest India. The basin is
structurally complex and characterized by numerous small fault blocks. The Permian-age
Karampur Formation is the primary source rock in this basin. While the source rock is Type III
and classified as mature, only limited data are available on the reservoir properties of this shale.
June, 2013 XXIV-35

6. LOWER (SOUTHERN AND CENTRAL) INDUS BASINS, PAKISTAN
The Southern and Central Indus basins (Lower Indus Basin) are located in Pakistan,
along westerns border with India and Afghanistan. The basins are bounded by the Indian
Shield on the east and highly folded and thrust mountains on the west, Figure XXIV-27.26
The Lower Indus Basin has commercial oil and gas discoveries in the Cretaceous-age
Goru Fm sands plus additional gas discoveries in shallower formations. The shales in the
Sembar Formation are considered as the primary source rocks for these discoveries. While oil
and gas shows have been recorded in the Sembar Shale on the Thar Platform, as of yet no
productive oil or gas wells have been drilled into the Sembar Shale.27
Figure XXIV-27. Outline for Southern and Central Indus Basin, Pakistan
June, 2013 XXIV-36

Sembar Shale. The Lower Cretaceous Sembar Formation is the main source rock in
the Lower Indus Basin. The Sembar contains shale, silty shale and marl in the western and
northwestern portion of the basin and becomes sandy in the eastern part of the basin. The
kerogen within the Sembar Formation is mostly Type II with some Type III.
The Lower Indus Basin covers a massive 91,000-mi2 area of western Pakistan. Within
this large basin area, for the Sembar Shale, we have identified a 31, 320-mi2 prospective area
for dry gas (Ro >1.3%), a 25,560-mi2 prospective area for wet gas and condensate (Ro between
1.0% and 1.3%), and a 26,700-mi2 prospective area for oil (Ro between 0.7% and 1.0%). To
account for the limited data on the Sembar Shale in this large basin area, we have highly risked
the prospective areas and the likelihood of development success.
The eastern boundary of the prospective area of the Sembar Shale in the Lower Indus
Basin is the minimum thermal maturity criterion of Ro 0.7%. The northern and western
boundaries of the prospective area are set by the limits of Sembar Formation deposition and
depth. The southern boundary of the prospective area is the offshore.
Ranikot Formation. The shales in the Paleocene Ranikot Formation are primarily in the
upper carbonate unit which consists of fossiliferous limestone interbedded with dolomitic shale,
calcareous sandstone and “abundant” bituminous material. The upper unit was deposited in a
restricted marine environment. West of the Karachi Trough axis, the Ranikot Formation
becomes dominantly shale (Korara Shale) with deep marine deposition.
Within the southern portion of the Lower Indus Basin, we have identified 26,780-mi2 for
the Ranikot Shale that appears to be prospective for oil (Ro of 0.7% to 1.0%). The eastern,
northern and western boundaries of the Ranikot Shale prospective area are set by the 300 m
isopach contour; the southern boundary of the prospective area is the offshore.
June, 2013 XXIV-37

Sembar Shale. The Sembar Formation was deposited under open-marine conditions.27
In the prospective area of the Lower Indus Basin, the thickness of the Sembar Shale ranges
from 1,000 to over 2,000 ft, Figure XXIV-28. We identified an organic-rich interval 1,000 ft thick
with a net shale thickness of 250 ft. We estimate TOC of approximately 2% and an Ro of 1.0%
to 1.6%. The Sembar Shale, in the shallower portions of the Lower Indus Basin, is in the oil and
wet gas windows, with the lower limit of the oil window at about 4,000 ft and the wet
gas/condensate window at 6,000 to 10,000 ft.27 In the deeper portions of the basin below
10,000 ft, the Sembar Shale enters the dry gas window.
Figure XXIV-28. Isopach of Sembar Shale, Lower Indus Basin, Pakistan26
June, 2013 XXIV-38

The thermal gradients in the basin increase from east to west, from 1.31oF/100 ft on the
Thar Slope in the east to 2.39oF/100 ft in the Karachi offshore in the west. The average thermal
gradient in the basin is 2.1oF/100 ft. The Sembar Shale appears to have low clay content.
Ranikot Formation. The prospective area of the Ranikot Formation has a thickness of
1,000 to 3,000 ft, with a net shale thickness of 200 ft, Figure XXIV-29. We assume 2% TOC
and a thermal maturity of 0.7% to 1.0% Ro, placing the Ranikot Shale in the oil window.
Figure XXIV-29. Isopach of Ranikot Formation, Southern Indus Basin, Pakistan26
June, 2013 XXIV-39

Within the 31,320-mi2 dry gas prospective area, the Sembar Shale in the Lower Indus
Basin has a resource concentration of 83 Bcf/mi2. Within the 25,560-mi2 wet gas and
condensate prospective area, the Sembar Shale has resource concentrations of 57 Bcf/mi2 of
wet gas and 9 million barrels/mi2 of condensate. Within the 26,700-mi2 oil prospective area, the
Sembar Shale has a resource concentration of 37 million barrels/mi2.
Within the overall prospective area of the Lower Indus Basin, the Sembar Shale has
risked shale gas in-place of 531 Tcf, with 101 Tcf as the risked, technically recoverable shale
gas resource. In addition, the Sembar Shale has 145 billion barrels of shale oil in-place, with
5.8 billion barrels as the risked, technically recoverable shale oil resource.
Within its 26,780-mi2 wet gas and condensate prospective area, the Ranikot Shale has
resource concentrations of 17 Bcf/mi2 of wet gas and 25 million barrels/mi2 of shale
oil/condensate. Within this prospective area of the Lower Indus Basin, the Ranikot Shale has
55 Tcf of risked shale gas in-place and 82 billion barrels of risked shale oil in-place. The risked,
technically recoverable shale resources of the Ranikot Shale are 4 Tcf of wet shale gas and 3.3
billion barrels of shale oil/condensate.
6.4 Recent Activity
No publically available data has been reported on shale gas exploration or development
for the Lower Indus Basin of Pakistan.
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summit%2Fpresentations%2FPlenary-1%2FPrem-Sawhney.pdf&rct=j&q=the%20state%20of%20domestic%20resources%20-
%20non%20conventional&ei=JEdITbGFHsT48Aa-ncj_Bg&usg=AFQjCNF5lzKOM5dDxB2SH3bkEhCvGdiuFw&cad=rja.
Mishra, H.K., and Cook., A.C., 1992. “Petrology and Thermal Maturity of Coals in the Jharia Basin: Implications for Oil and
21
Gas Origins.” International Journal of Coal Geology, vol. 20, p. 277-313.

22 Ghosh, S. C. 2002. “The Raniganj Coal Basin: an Example of an Indian Gondwana Rift.” Sedimentary Geology 147, no. 1-2p.
155-176.
23 Mathur, N., Raju, S.V. and Kulkarni, T.G., 2001. “Improved Identification of Pay Zones through Integration of Geochemical
and Log Data—A Case Study from Upper Assam basin, India.” American Association of Petroleum Geologists, Bulletin, vol. 85,
no. 2.
June, 2013 XXIV-41

24 Wandrey, C., 2004. “Bombay Geologic Province Eocene to Miocene Composite Total Petroleum System, India.” USGS
Bulletin 2208-F, p. 1-26.

25Mallick, R.K. and Raju,S.V., 1995. Thermal Maturity Evaluation by Sonic Log and Seismic Velocity Analysis in Parts of Upper
Assam Basin, India, Org. Geochem. vol 23, p. 871-879.
26 Viqar-Un-Nisa Quadri and Shuaib,S.M., Hydrocarbon Prospects of the Southern Indus Basin, Pakistan, AAPG Bulletin, vol. 70,
p. 730-747.
27 Quadri, Viqar-Un-Nisa, and Shuaib, S., 1968 “Hydrocarbon Prospects of Southern Indus Basin, Pakistan.” AAPG Bulletin 70,
p. 730-747.
June, 2013 XXIV-42

XXV. Jordann EIA/ARI W
XXV. JORD
DAN
SUMMA
ARY
Jo
ordan has tw
wo basins with
w potentiall for shale g
gas and oil, tthe Hamad (Risha area) and
Wadi Sirhan, Figure XXV. The target
t horizo
on is the org
ganic-rich Sillurian-age B
Batra Shale w
within
the large
er Mudawwara Formation
n.
Figure
F XXV-1. Base Map an
nd Cross-Secttion Location,, Jordan.
Sourcee: ARI, 2013.
June, 2013 XX
XV-1
Our
O assessm
ment is that the Batra Shale
S in thesse two basin
ns contains 35 Tcf of rrisked
shale gas in-place with hnically recovverable shale gas resou
w 7 Tcf of risked, tech urce, Table XXV-
ddition, we estimate
1. In ad e tha
at the Batra Shale holdss 4 billion b
barrels of rissked shale o
oil in-
1 billion barrels of riske
place, wiith about 0.1 ed, technical ly recoverab
ble shale oill resource, T
Table
XXV-2.
Table XXV-1. Shaale Gas Reservvoir Propertiess and Resourrces of Jordann

Ham
mad Wadi Sirhan
Basin/G
Gross Area
Basic Data
2 2
(6,700 mi ) (4,700 mi )
Shale Formation
F Battra Batra
Geolo ogic Age Silurrian Silurian
Depositionaal Environment Mariine Marine
2
Prospective Arrea (mi ) 3,3000 1,050
Physical Extent
Organically Ricch 160 120

Thickness (ft)
Net 800 60
Interval 6,500 - 10,000 4,500 - 6,500
Depth (ft)
Average 8,5000 5,500
Reservoir Presssure Norm
mal Normal
Properties
Reservoir
Average TOC (wt.

( %) 2.0%% 4.0%
Thermal Maturrity (% Ro) 1.300% 0.80%
Clay Content Mediium Medium
Gas Phase Dry Gas
G Assoc. Gas
Resource
2
GIP Concentraation (Bcf/mi ) 25..3 3.7
Risked GIP (Tccf) 33..4 1.6
Risked Recoveerable (Tcf) 6.77 0.2
Source: ARI 2013.
2
June, 2013 XX
XV-2
Table XXV-2. Shaale Oil Reservvoir Propertiess and Resourcces of Jordan

Wadi Sirh
han
Basin/Grosss Area
Basic Data
2
(4,700 mi )
Shale Formmation Batra
Geologicc Age Siluriann
Depositional Environment Marinee
2
Pro
ospective Area (mi( ) 1,050
Physical Extent Thiickness (ft)
Organically Rich 120
Neet 60
Intterval 4,500 - 6,5500
Deppth (ft)
Avverage 5,500
Resservoir Pressurre Normal
Properties
Reservoir
Aveerage TOC (wt. %) 4.0%

Theermal Maturity (%
( Ro) 0.80%
Claay Content Mediumm
Oil Phase Oil
Resource
2
OIP
P Concentration
n (MMbbl/mi ) 8.8
Rissked OIP (B bbl)) 3.7
Rissked Recoverab
ble (B bbl) 0.15
Source: ARI, 2013.
INTROD
DUCTION
Eastern
E Jorda
an contains Silurian-age
e organic-ricch marine sh
hales in the Batra Memb
ber of
the Mud
dawwara Fo
ormation. Similar Silu
urian organiic-rich shale
es are a m
major sourcce of
hydrocarrbons in Norrth Africa, Ira
aq and Saud
di Arabia. T
The Batra Sh
hale is time equivalent tto the
Tanezzuft Formation
n in Libya an
nd the Qusaiba Shale off the Qalibah abia.1
h Formation in Saudi Ara
These Lo es are often called “Hott Shales” be
ower Silurian-age shale ecause of th
heir high ura
anium
content, having gamma-ray values of >150 API gure XXV-2.2
A units, Fig
Additional
A orrganically en
nriched marrine shales exist in the
e uppermostt Ordovician
n-age
Risha Fo
ormation. These
T shales
s are 60 to 120 feet th
hick and havve thermal m
maturities fo
or dry
gas.3,4 However,
H the
e TOC value
es of these Upper
U Ordovvician shaless generally range from 0.5%
to 1.5%, below the TOC
T cut-off set
s forth for this
t study.
June, 2013 XX
XV-3
For the shale

e gas and oill resource as
ssessment o
of Jordan, w
we have draw
wn heavily o
on the
most valluable geolo
ogical work and publica uning (2000,,1 20053), A
ations of Lu 2005,5
Armstrong (2
20092), Keegan
K 906), and Ahlbrandt (19
(199 9977). In a ddition, Jord
dan’s Petroleum Directtorate
within the
e Natural Re
esources Au
uthority prov
vided importtant informattion in their 2006 publiccation
entitled, “Petroleum
“ Exploration
E es in Jordan””.8
Opportunitie
Fiigure XXV-2. Lithostratigraaphy for the Ordovician

O andd Silurian of JJordan and Saaudi Arabia,
Source: Lithhostratigraphy annd chronostratigraphy for the Orrdovician and Sillurian of Jordan and Saudi Arabia, showing
generalized depositional environments for outcrops
o in the Southern
S Desert region of Jordann (redrawn from Turner et al., 20005).
Armstrong (2009)
(
LOGIC SET
1. GEOL TTING
The
T Batra Shale is pres
sent in the sub-surface
e in the Ham
mad (Risha area) and Wadi
Sirhan ba
asins of eas
stern Jordan, as well as in the near--surface in the Al Jafr area and outccrops
of the So
outhern Des
sert of Jorda
an. The He
ercynian sub
b-crop estab
blishes western limits o
of the
Batra Sh
hale in Jorda
an. The Syrria, Iraq and Saudi Arab
bia borders w
with Jordan set the nortthern,
southern and easterrn limits of the
t Jordan portion
p of th
his shale deposit. The Batra Shale
e is a
Type I/II marine sha
ale, deposite
ed along the
e margins o
of the receding Gondwa
ana shelf. F
Figure
XXV-3 prrovides the depth
d and arreal extent fo
or the prosp
pective areass of Batra Sh an.3
hale in Jorda
June, 2013 XX
XV-4
The
T Batra Sh
hale contains
s three distin
nct organic-rrich intervalss - - a highlyy organic-rich
h unit
called the “Lower Hot Shale”, a middle unit within low
wer organic ccontent, and
d the “Uppe
er Hot
Shale”.3 We have included the
e “Lower Hot Shale“ a
and the “Upper Hot Shale” units in
n our
e assessmen
resource nt.
Fig
gure XXV-3. Depth
D and Pro
ospective Areaas - - Batra Shhale, Jordan
Source: ARI, 20013.
June, 2013 XX
XV-5
The
T “Lower Hot
H Shale” unit, deposited at the b
base of the Batra Shale
e and above
e the
underlyin b Formation, is present in southea
ng Dubaydib astern Jorda
an (Wadi Sirrhan Basin).. The
“Lower Hot
H Shale” th
hins to the west,
w north and
a south in the Wadi S
Sirhan area. The “Uppe
er Hot
Shale” ex
xists in the Hamad
H Basin’s Risha ga a along the Iraqi border. The “Uppe
as field area er Hot
Shale” is
s at the top of
o the Batra Shale
S interva ure 4.3
al, XXV-Figu
Figure XXV-4.
X Chono Ordovician-Siilurian in Jorddan.
ostratigraphy of the Upper O
Source: S. Luning, 2005.
The
T thermal maturity of the
t Batra Sh
hale increas es from sou
uth to north a
and from we
est to
east. The
e shale is immature to early-maturre in the Al Jafr area, becomes m
middle-maturre (oil
window) in the Wadi Sirhan area
a, and is late
e to post-ma
ature (gas window) in the
e Hamad Ba
asin’s
Risha arrea.3,7 The determina
ation of the
e thermal m
maturity for the Batra Shale has been
approxim
mated using graptolite re
eflectance an
nd maximum
m temperatu
ure. (Vitrinite
e did not yet exist
during ea
arly Silurian time.)
June, 2013 XX
XV-6
As
A shown in Figure XXV
V-3, we hav 1,050 mi2 fo
ve mapped a prospectivve area of 1 or the
“Lower Hot
H Shale” in
n the oil-pron
ne Wadi Sirh d a prospecctive area of 3,300 mi2 fo
han area and or the
“Upper Hot
H Shale” in the gas-pro
one Risha arrea.
2. RESE
ERVOIR PR
ROPERTIES (PROSPECTIVE AR
REA)
Lower
L Hot Shale.
S In th
he Wadi Sirhan prospecctive area, tthe depth of the “Lowe
er Hot
Shale” ra
anges from 4,500 to 6,5
500 ft, avera
aging 5,500 ft. Based on analog d
data, we asssume
that the shale
s in this
s area is at normal pres
ssure. The o
organic-rich gross intervval of the “L
Lower
Hot Shale” unit in the Wadi Sirh
han prospecttive area ran
nges from 3
30 to 100 ft, with an ave
erage
net pay of about 60
0 ft (using 150 API unitts of backgrround gamm
ma radiation)). Figure X
XXV-5
provides a north to south cross
s-section for the Batra S
Shale in the an area.8 (F
e Wadi Sirha Figure
XXV-1 prrovides the cross-sectio
c n locations.3,8)
Figuree XXV-5. Nortth to South Reegional Cross--Section, Waddi Sirhan Basin.
Source: NRA Petroleum Dirrectorate Jordan, 2006.
June, 2013 XX
XV-7
The
T TOC of the
t “Lower Hot
H Shale” unit
u ranges ffrom 1.5% to
o 9%, with a
an average vvalue
of about 4%, Figure XXV-6.
X 2 The
e thermal maturity of the d at 0.7% to 1.0%
e shale unit is estimated
Ro equiv
valent, avera
aging 0.8% Ro. We ha
ave used oth
her Silurian--age “hot sh
hale” deposiits as
analogs for
f suppleme
ental reservoir data for the
t “Lower H
Hot Shale” in
n the Wadi S
Sirhan Basin.
Figure XX
XV-6. Bulk Orrganic Carbon
n, Biomarker aand Stable Caarbon Isotope Data.
(A) Total orgganic carbon (TO

OC) content of thhe bulk sedimennt. (B) Hydrogen index (HI) of thee bulk sediment (mg hydrocarboons
(HC)/g TOC C). (C) Steranes//17α-hopanes raatio shows its higghest value at 122.94m above thee base of the Batra formation. (D
D)
δ13C valuess of organic carbbon (OC) versuss Vienna Peedeee belemnite (VPD DB) in parts per mil (‰).Source: Armstrong (20009)
Upper
U Hot Shale.
S In the
e Hamad Ba
asin/Risha p rospective a
area, the dep
pth of the “U
Upper
Hot Shale” ranges frrom 6,500 to
o 10,000 ft, averaging
a 8 ed well test data,
8,500 ft. Bassed on limite
me that the shale is at normal pres
we assum ssure. The o
organic-rich gross intervval of the “U
Upper
Hot Shale” unit in the Risha pro ea is about 160 ft thick, with an avverage net p
ospective are pay of
about 80
0 ft, based on
n a minimum
m 2% TOC value
v cutoff. Figure XXV
V-7 providess a north to ssouth
cross-sec
ction for the Batra Sh
hale in the Risha area
a (see Figu
ure XXV-1 ffor cross-se
ection
June, 2013 XX
XV-8
location.)).8 The ave

erage TOC value is ab
bout 2%, a fter exclusio
on of the lo
ower TOC vvalue
intervals using the net
n to gross
s pay ratio. The therm al maturity of the “Upp
per Hot Sha
ale” is
quivalent3. We
d at above 1.2% Ro eq
estimated W have ussed analog d
data from o
other Silurian
n-age
“hot shale” deposits
s for supple
emental rese
ervoirs data for the “Upper Hot Shale” unit in
n the
Hamad Basin
B (Risha
a Area).
Figure XXV
V-7. Regional Geologic Cro
oss-Section, E
Eastern Hamadd Basin (Rishaa Area).
Source: NRA Petroleum Dirrectorate Jordan, 2006
Figure XXV-8
8 is an isop
pach map fo a Shale using the 150 API gamm
or the Batra ma-ray
y rich shale..3
und value for determining organically
backgrou
June, 2013 XX
XV-9
Figure XXV-8.
X Isopacch Map of Organic-Rich Silu
urian Shales w
with Total Gam
mma-Ray Valuues Exceedingg 150
AP
PI Correspondding to Organicc Richness.
June, 2013 XXV

V-10
3. RESO
OURCE AS
SSESSMEN
NT
Wadi
W Sirhan Basin. The
e prospectiv
ve area for th
he Lower Ba
atra Shale in
n the Wadi S
Sirhan
Basin is limited on th
he west by th
he thinning and
a thermal maturity of the shale an
nd on the ea
ast by
the Jordanian borde
er. Within the
t mi2 prospectiive area forr oil, the Ba
1,050-m atra Shale h
has a
resource s of oil perr mi2 plus m
e concentrattion of 9 million barrels moderate volumes of sshale
associate
ed gas.
The
T risked re
esource in-pllace for the shale oil pro
ospective arrea of the W
Wadi Sirhan B
Basin
is estima
ated at 4 billion barrels of
o oil plus 2 Tcf of asso
ociated shale
e gas. Base
ed on moderrately
favorable
e reservoir properties,
p we
w estimate a risked, te
echnically recoverable shale oil reso
ource
of 0.1 billion barrels plus small volumes
v of associated
a s hale gas forr the Batra S
Shale in the Wadi
Sirhan Basin.
Hamad/Rish
H a Area. Th
he prospecttive area forr the Upperr Batra Shale in the Ha
amad
Basin/Ris
sha area is limited on the west by th
he pinch-out of the shale
e and on the north, south
h and
2
east by the
t Jordania
an border. Within
W the 3,300-mi
3 pro
ospective arrea for wet and dry gass, the
Batra Shale has a re centration off 25 Bcf/mi2.
esource conc
The
T risked sh
hale resourc
ce in-place for
f the gas p
prospective area is estimated at 33
3 Tcf.
Based on
o moderattely favorab
ble reservoir propertie
es, we estimate a rissked, techn
nically
recoverable shale ga e of about 7 Tcf for the Batra Shale
as resource e in the Ham
mad Basin/R
Risha
area.
4. RECE
ENT ACTIV
VITY
A number of
o deep exp
ploration we
ells have b d in the Wadi Sirhan area
been drilled
prospecting for oil. One
O well (W
Wadi Sirhan #4)
# is reportted to have produced 25
5 barrels pe
er day
of 42o API oil from sandstones
s associated with the Ba
atra Shale, w
while other exploration wells
have rep s of light oil.8 However, much of the
ported shows e data from these deep exploration wells
remains confidential. Another series of wells (31) have
e been drille
ed in the Ham
mad Basin/R
Risha
o the Risha tight sandsto
area into one memberr of the Ordo
ovician-age D
Dubaydib Fo
ormation. Five of
the wells
s are reported to be prod
ducing at a combined
c ratte of 30 MMcfd.7 The Batra Shale, iin the
overlying
g Silurian-a
age Mudaw mation, is considered the sourcce of this gas
wwara Form
accumula
ation.
June, 2013 XXV

V-11
REFERE
ENCES
1 Luning, S. et al., 2000. “LLower Silurian ‘H

Hot Shales’ in Noorth Africa and A
Arabia: Regionaal Distribution annd Depositional M
Model”,
Elsevier Earth-Science
E Reviews,
R vol. 49, p. 121-200.
2 Armstrongg, H.A. et al., 2009. “Black Shhale Deposition in an Upper O rdovician–Siluriaan Permanentlyy Stratified, Peri-glacial
Basin, Soouthern Jordan.” Elsevier Paleogeography, Paleeoclimatology, P
Paleoecology, vool. 273, p. 368–3377.
3 Luning, S. et al., 2005. “A
Anatomy of a Woorld-Class Sourcce Rock: Distrib ution and Depossitional Model of Silurian Organnic-Rich
Shales in Jordan and Impplications for Hyddrocarbon Potenntial.” American Association of P
p. 1397-1427.
4 Based on H. Ramini, 19955, personal comm
munication with S.
S Luning.
5 Armstrongg, H.A. 2005. “Origin, Sequennce Stratigraphyy and Depositionnal Environment of an Upper O Ordovician (Hirnnantian)
Deglacial Black Shale, Joordan.” Elsevier, Paleogeographhy, Paleoclimatoology, Paleoecology, vol. 220, p.. 273-289.
6 Keegan, J.B., Rasul, S.M., and Shaheen, Y., 1990. “Palynnostratigraphy oof Lower Paleozooic, Cambrian too Silurian, Sedim
ments of
the Hasheemite Kingdom of
o Jordan.” Revv. Palaeobot. Pallynol., vol. 66, p.. 167-180.
7 Ahlbrandt, T.S., Okasheh, O.A., and Lewaan, M.D., 1997. “A Middle East Basin Center Hydrocarbon Acccumulation in Paleozoic
Rocks, Eastern Jordan, Western Iraq annd Surrounding Regions.” Ameerican Association of Petroleumm Geologists, Abbstract,
Internatioonal Conference and Exhibition, 7-10 Septemberr 1997, Vienna, A
Austria.
8 Natural Resources
R Authhority, Petroleum t Hashemite Kingdom of Joordan, 2006. “P
m Directorate, the Petroleum Explloration
Opportunnities in Jordan.”
June, 2013 XXV

V-12
XXVI. Turkeey EIA/ARI W
XXVI. TUR
RKEY
SUMMA
ARY
This
T resource assessme
ent address
ses two sha
ale basins in
n Turkey - - the South
heast
Anatolia Basin in so
outhern Turk
key and the
e Thrace Ba
asin in westtern Turkeyy, Figure XX
XVI-1.
wo basins ha
These tw ave active shale
s oil and
d gas explorration underrway by the Turkish nattional
petroleum
m company (TPAO) and
d several international ccompanies. Turkey mayy also have sshale
gas reso
ources in the d Salt Lake basins. H
e Sivas and However, only limited re
eservoir data
a are
available
e for these tw
wo lightly exp
plored basin
ns.
Figu
ure XXVI-1. Maajor Shale Bassins of Turkeyy
Source: ARI, 2013.
June, 2013 XXVI-1

We
W estimate that the Dad
das Shale in
n the SE Ana
atolian Basin
n and the Ha
amitabat Sha
ale in
the Thra
ace Basin contain 163 Tcf of riske
ed shale ga
as in-place, with 24 Tccf as the rissked,
ble shale ga
as resource, Table XXV
VI-1. In addition, we esttimate that tthese
two shale
e basins also
o contain 94 els of risked shale oil in--place, with 4
4 billion barre 4.7 billion ba
arrels
as the ris
sked, technic
cally recoverrable shale oil
o resource,, Table XXV
VI-2.
Table XXVI-1.
X Shalee Gas Reservvoir Propertiees and Resouurces of Turkkey
SE
E Anatolian Thrace
Bassin/Gross Area 2 2
Basic Data
(332,100 mi ) (6,500 mi )
Sh
hale Formation Dadas Hamitabat
G
Geologic Age Silurrian-Devonian M. - L. Eocene
Deposittional Environmentt Marine Marine
2
Prospectivve Area (mi ) 3,540 500 150 210 680
Physical Extent

Thickness (ft)
Net 216 207 250 250 250
Interval 6,000 - 11,5000 5,500 - 13,000 10,000 - 13,0000 13,000 - 16,400 14,000 - 16,400
Depth (ft)
Average 9,000 9,500 11,500 14,500 15,000
Mod. Mod. Mod.
Reservoir Pressure Mod. Overpresss. Mod. Overpreess.
Properties
Reservoir

Average TOOC (wt. %) 3.6% 3.6% 2.0% 2.0% 2.0%
Thermal Maturity
M (% Ro) 0.85% 1.15% 0.85% 1.15% 2.00%
Clay Conteent Med./High Med./Highh Medium Medium Medium
Gas Phasee Assoc. Gass Wet Gas Assoc. Gass Wet Gas Dry Gas
Resource
2
GIP Conceentration (Bcf/mi ) 48.2 91.4 34.7 81.8 104.1
Risked GIP
P (Tcf) 102.4 27.4 1.9 6.2 25.5
Risked Reccoverable (Tcf) 10.2 6.9 0.1 1.2 5.1
Table XXVI-2.
X Shalee Oil Reservo
oir Propertiees and Resouurces of Turkkey
SE Anatoliaan Thrace
Basin/Grosss Area 2 2
Basic Data
(32,100 mi ) (6,500 mi )
Shale Formaation Dadas Hamitabat
Geologic Age
A Silurian-Devonnian M. - L. Eocene
Depositional Envvironment Marine Marine
2
Proospective Area (m
mi ) 3,540 500 150 2110
Physical Extent
Orgaanically Rich 394 377 5

500 5000
Thickness (ft)
Net 216 207 2
250 2550
Interrval 6,0000 - 11,500 5,500 - 13,000 10,0000 - 13,000 13,000 - 16,400
Depth (ft)
Averrage 9,000 9,500 111,500 14,500
Mod. Mod. M
Mod. Mood.
Reservoir Pressure
Properties
Reservoir
O
Overpress. Overpress. Ove rpress. Overppress.
Avverage TOC (wt. %) 3.6% 3.6% 2
2.0% 2.00%
Thermal Maturity (%% Ro) 0.85% 1
1.15% 0..85% 1.15%
Claay Content M
Med./High Meed./High Meedium Meddium
Oill Phase Oil Conndensate Oil Condeensate
Resource
2
OIP
P Concentration (MMbbl/mi
( ) 41.0 14.2 3
33.8 8
8.0
Rissked OIP (B bbl) 87.1 4.2 1.8 0
0.6
Rissked Recoverablee (B bbl) 4.36 0.21 0
0.07 0.02
June, 2013 XXVI-2

1. SOUTHEAS
S ST ANATOLIAN BASIIN

ntroduction
The
T SE Anattolian Basin covers a la 0-mi2 area in
arge, 32,100 n southeaste
ern Turkey. The
basin con
ntains the Silurian Dada
as Shale, loc
cated in the ccentral basin
n portion of the basin, F
Figure
XXVI-2. The basin is bounded
d on the no
orth by the Zagros sutture zone, w
which markss the
juncture of the Arabian and Eurrasian tecton
nic plates. T
The basin iss bounded o
on the south
h and
east by the
t Syria, Iraq and Turk
key border. The SE An
natolian Bassin is an acttive, primarilly oil-
prone ba
asin with abo
out 100 oil field
f discove
eries to date
e. While the
e bulk of the
e oil productiion is
from Marrdin Group carbonate
c fo
ormations, th
he basin also
o has deep P
Paleozoic re
eservoirs succh as
the Bedin
nan Sandsto 4 o to 50o AP
one that conttains light, 40 PI gravity oil..
Figure XX
XVI-2. Outline and Depositio
onal Limit of D
Dadas Shale, S
SE Anatolian Basin
Source: ARI, 2013.
June, 2013 XXVI-3

In
n the early Paleozoic, Silurian-age
e shale form
mations werre deposited
d throughou
ut the
northern Gondwana super-continent (present day North
h Africa and
d the Middle
e East), follo
owing
sea level rise caused
d by melting
g of Ordovic
cian-age glacciers. Regio
onal lows and offshore d
deltas
with anoxic condition ch sedimentts. The SE Anatolian B
ns preserved organic-ric Basin was pa
art of
hern edge off the Gondw
the north continent, w hich later se
wana super-c eparated to form the Ara
abian
plate. As
s such, the SE
S Anatolian Basin sha
ares similar g
geology with
h the oil-prod
ducing regio
ons of
Saudi Arrabia and Ira
aq, although it experienc
ced more inte
ense faulting
g and thrustting from collision
with the Eurasian
E Pla
ate.
The e deep Silurian Dadas S

T SE Anattolian Basin contains thrree source rrocks - - the Shale,
the Late Cretaceous
s Karabogaz ch limeston e, and the organic-rich
z organic-ric h deposits in
n the
Jurassic Jodi Group.1
Triassic-J The most prospective
e of these ssource rockks is the Sillurian
Dadas Shale,
S the basal
b membe
er of which, called Dad
das I, is the
e organic-ricch shale intterval
2
evaluated
din this reso
ource study, Figure XXV
VI-3. In ge
eneral, the D
Dadas Shale
e is oil prone but
may be wet
w gas-pron
ne in the dee
eper northern area of the
e basin.
A mapped a 4,040-mi2 area of the Dadas Sha

ARI ale in the no
orth-central p
portion of th
he SE
Anatolian
n Basin as prospective
p for
f shale gas
s and shale o
oil developm
ment. The prrospective arrea is
bounded on the eastt by the 10-m
m Dadas I Shale
S isopacch, on the so
outh and we
est by the -1,500-
ea depth con
m sub-se ntour for the
e Dadas Sha
ale (approxim
mately equivvalent to an Ro of 0.7%)), and
on the north
n e Hazro Uplift.2
by the e XXVI-41 p
Figure provides a n
north to sou
uth cross-se
ection
through the
t center of
o the basin, illustrating the presencce and depth of the Dad
das Shale. (The
location of
o the cross--section is sh
hown on Fig
gure XXVI-2)).
1.2 Reservoir
R Properties
The
T Dadas Shale of the
t SE Ana mi2 central area
atolian Bassin containss a 3,540-m
prospective for shale oil and a smaller, no 0-mi2 prospe
orthern 500 ective area for wet gass and
condensa
ate, Figure XXVI-5. Because of limited data on vitrinite e, we have used
e reflectance
Tmax of 455oC as a proxy for the Ro of 1.0%
1 bound ary between
n the oil pro
one and the
e wet
densate pron
gas/cond ure XXVI-6.3 The south ern 0.7%-Ro boundary ffor the oil window
ne area, Figu
he -1,500-m sub-sea depth contour for the Dada
follows th as Shale.
June, 2013 XXVI-4

X
XXVI. Turkey EIA/ARI W
Figure XXVI-3. SW Anatolia Basiin Stratigraphic Figure XXVI-4.

X SW Anatoliian Basin Cross-S
Section1
Column2
A A’
D
Dadas Shale
Dadas
Source: E. Aytac,
A 2010.
S
Source: A. Aydemir, 2010.
JJune, 2013 XXVI-5

Figuree XXVI-5. Dadas Shale Prosspective Area,, SE Anatoliann Basin, Turkeey
Source: ARI, 2013
Figure XX
XVI-6. Relation
nship of Tmax and Thermal Maturity for B
Basal Dadas I Shale
Source: M. Mitchell, 2013.
June, 2013 XXVI-6

A series of key
k wells prrovided valu
uable inform ation on the
e reservoir properties o
of the
Dadas Shale.
S ncluded: (1) the Goksu-#
The key wells in #1R (with 3 ore, detailed rock
30 feet of co
mineralogy and mic
cro-seismic data); (2) the
t Bahir-#1
1 (with core
e-based vitrrinite reflecttance
information and rese
ervoir pressu
ure data); an
nd (3) the C
Caliktepe-#2 (with 5 Dad
das Shale co
ores).
The loca
ation of these three key reserv
voir charactterization w
wells, plus the Shell/T
TPAO
Saribugd
day-#1 well are
a shown on Figure XX
XVI-5.
The
T depth off the Dadas Shale in the
e SE Anatoliian Basin ra
anges from 6
6,000 ft to 13
3,000
ft, averag
ging 9,000 ftt in the oil window and 9,500
9 ft in the
e wet gas and condensa
ate window. The
total Dad
das Shale Fo
ormation ha
as an extens
sive gross th
hickness of o
over 1,000 fft, with, its lo
ower,
dered the primary organi c-rich sourcce rock.2
200-ft thick basal porrtion consid
Based
B on core analyses
s information
n from the kkey wells disscussed abo
ove, the Dadas I
Shale co
ontains Type
e II (oil and gas)
g marine kerogen witth a TOC off 2% to 7%, averaging 3
3.6%.
The form
mation oil sam d at 40o to 50
mples tested 0o API. The shale matrix has a poro
osity of 6% tto 7%
with low water saturration. The
e mineralogy
y of the Dad
das Shale in the Bahir #1 well sho
owed
moderate
ely high clay z.3 The form ation is overr-pressured..
y (34%) with 39% quartz
1.3 Resource
R Assessmen
A nt
Within
W the 3,540-mi2 oil prospective area, the D e in the SE Anatolian B
Dadas Shale Basin
has an estimated res
source conce arrels/mi2 off oil plus asssociated gas. We
entration of 41 million ba
estimate 87 billion barrels
b of ris
sked shale oil
o in-place a
and 102 Tcff of associatted shale ga
as in-
place, with 4.4 billio
on barrels of shale oil and
a 10 Tcf of associate
ed shale ga
as as the rissked,
ble shale res
sources.
2
Within
W the 500-mi
5 wet gas and condensate
c area, the Dadas Sha
ale has reso
ource
concentrrations of 91 Bcf/mi2 for wet
w gas and barrels/mi2 fo
d 14 million b or condensa
ate. We estiimate
the Dada
as Shale contains a risk
ked wet sha
ale gas in-pllace of 27 T
Tcf, with 7 T
Tcf as the rissked,
ble shale gas resource. This area a
also holds rissked shale o
oil/condensa
ate in-
place of 4 billion barrrels, with 0.2 billion barrels as the risked, tech
hnically reco
overable sha
ale oil
e.
resource
June, 2013 XXVI-7

Overall,
O we estimate
e thatt the Dadas I Shale in th
he SE Anato
olian Basin ccontains 91 b
billion
barrels of
o risked sha
ale oil in-pla
ace and 130 Tcf of ris ked shale g
gas in-place
e, with 4.6 b
billion
barrels of
o shale oil/condensate
e and 17 Tcf of wet shale gass as the rissked, techn
nically
recoverable shale resources.
While
W the Dadas
D Sha
ale formatio
on has rellatively favvorable properties for gas
developm
ment, the prrospective areas
a exhibit heavy fau
ulting and th
he shale ha
as moderate
e clay
content, two factors that
t could po
ose significa
ant developm
ment risks.
1.4 Recent
R Activity
TPAO,
T the Turkish Na
ational Oil Company, and Shell are curre
ently drilling
g the
Saribugd
day-#1 well in License Area
A 4925 tes
sting the Da
adas Shale. Shell has a
announced a five-
well exploration prog olia Energy drilled their first Dadas Shale evalu
gram for the area. Anato uation
well, Caliktepe-#2, on
o their Bism anuary, 2012.4 The sha
mil lease area in early Ja ale section in the
well was cored, prov
viding valuab
ble informattion on the rreservoir pro
operties of the Dadas S
Shale,
as reportted earlier in this chaptter. TransA
Atlantic Petro
oleum reporrted flowing gas and lig
ght oil
from their two Dadas
s Shale test wells, Goksu-#1 and Ba
ahir-#1. TPA d their Oiksor well
AO reported
52 barrels off 60o API gra
flowed 15 avity oil durin
ng a three-h our test in th
he Dadas Sh
hale.
June, 2013 XXVI-8

2. THRACE
T BA
ASIN
2.1 In
ntroduction
The
T Thrace Basin coverrs an 6,500--mi2 area in
n the Europe
ean portion of Turkey. The
Basin is bordered on
n the north by
b the Istran
nca Massif, b
by the Rhod
dope Massiff on the wesst and
arya Massiff on the south, Figure XXVI-7.
the Saka T
Tertiary-age (Eocene th
hrough Mioccene)
deposits reach nearlly 30,000 ft thick in the center of th
he basin. Fo
ollowing the discovery o
of the
at Gas Field
Hamitaba d in 1970, the Thrace Ba
asin became
e Turkey’s m
most importa
ant gas producing
area, acc
counting forr 85% of the
e country’s total gas prroduction. About 350 wells have been
drilled in thirteen gas fields and elds in this basin. The
d three oil fie e Thrace Basin is prima
arily a
tight sand
d gas play, sourced
s by adjoining
a and deeper sh
hales.
Fig
gure XXVI-7. Outline
O and Depositional
D Liimits of the Thhrace Basin
Source: ARI, 2013.
June, 2013 XXVI-9

The
T Thrace Basin
B contaiins two shale source ro ck formation
ns with oil a
and gas pote
ential,
the Middle Eocene Hamitabat
H Fo
ormation and
d the Lower Oligocene M
Mezardere F
Formation, F
Figure
XXVI-8.5 The Hamiitabat Forma
ation contain
ns a thick ssequence off sandstone, shale and marl
deposited
d in a shallo
ow marine environment
e t. The Meza mation, deposited in a deltaic
ardere Form
environm
ment, contain
ns inter-bedd
ded layers of sandstone
e, shale and marl. In the
e deeper are
eas of
the basin mal maturity tto be in the gas window
n, these shalles have suffficient therm w.
The
T prospecttive areas for the shale
es in the Th
hrace Basin are based on total org
ganic
content, appropriate
e depth an
nd adequate
e thermal maturity. Because o
of their com
mplex
onal environm
depositio ments, accu
urately locating prospecttive shale in
ntervals withiin the Mezardere
and Ham ations requires detailed
mitabat forma d geologic da
ata, and a m
more extenssive set of ccross-
sections than were available
a for this basin, Figure
F XXVI--9.5
T 1,040-mii2 prospectiv
The ve area identified for the
e Hamitabat Formation iss based prim
marily
on depth
h and therma
al maturity data.
d The Hamitabat
H F
Formation co
ontains modest-size oil (150-
mi2) and wet gas/con 10 mi2) areas and a larg
ndensate (21 ger, 680-mi2 prospective area for dryy gas.
Howeverr, a major po
ortion of the dry gas area
a in the centter of the basin is deepe
er than the 5
5,000-
m threshold used forr this analysis and thus was e area. While we
w not inclluded in thiss prospective
mapped the areal extent and th
hermal matu
urity of the Mezardere Shale, we d
did not iden
ntify a
prospective area for this shale be
ecause the recent
r data showed
core d es less than 2%.6
d TOC value
2.2 Reservoir
R Properties
Hamitabat
H Shale.
S The deepest and
d oldest sh ale formatio
on in the Th
hrace Basin
n, the
at Shale is also the mo
Hamitaba ost thermally mature. The shale is in the dryy gas windo
ow at
depths of
o 14,000 to 16,400 ft in the cente
er of the bassin, with Ro ranging fro
om 1.3% to over
2.5%.7 Organic
O conttent is highly
y variable th
hroughout th
he formation
n, ranging fro
om fractionss of a
percent to
t above 6%
%. Within the
e prospectiv
ve area, TOC
C ranges fro
om 1% to 4%
%, averaging
g 2%.
The net shale
s of the Hamitabat Shale
S averag VI-10.8
ges 250 feett, Figure XXV
Mezardere
M Shale.
S The Mezardere
M Shale
S is a ssecond thickk, regionallyy extensive sshale
interval in
n the Thrace ure XXVI-11.8 Howeverr, because o
e Basin, Figu of low organic content (<
<2%),
this shale
e formation has
h not been
n quantitativ
vely assesse
ed.
June, 2013 XXVI-10

X
XXVI. Turkey EIA/ARI W
Figure XXVI-8. Th
hrace Basin Stratigraphic Column5 Figuree XXVI-9. Thrace B
Basin Cross Sectiion 5
Mezardere
Hamitabat
Mezarde
ere
Hamitabat
S
Source: Gürgey, Kaddir, 2005. Source: Gürgey, Kadir, 2005.
JJune, 2013 XXVI-11

Figure XXVI-10. Ham

mitabat Shale Formation of tthe Thrace Baasin, NW Turkkey
Source: ARI, 2013.
Figure XXVI-11. Mezzardere Shale Formation of the Thrace Baasin, NW Turkkey
Source: AR
RI, 2013.
June, 2013 XXVI-12

2.3 Resource
R Assessmen
A nt
Within
W their respective prospective areas, AR I calculatess a dry sha
ale gas reso
ource
4 Bcf/mi2, a wet shale gas resource
concentrration of 104 mi2, and a sshale oil reso
e of 82 Bcf/m ource
concentrration of 34 million
m barrels/mi2 for the
e Hamitabat Shale.
The
T Hamitab
bat Shale co
ontains riske
ed shale ga
as in-place o with 6 Tcf as the
of 34 Tcf, w
ble shale ga amitabat Shale also con
as resource, Table XXVII-1. The Ha ntains
risked sh
hale oil/condensate in-place of 2 billion barrels, with 0.1 billion barrels a
as the techn
nically
recoverable shale oill resource.
2.4 Recent
R Activity
Much
M of the activity in the Thrace Basin is fo
or tight gass, particularly by TPAO
O and
TransAtla
antic Petrole
eum. While these comp
panies have begun to ap
ppraise the sshale gas an
nd oil
in this ba
asin, no inforrmation has been releas
sed on shale
e well tests o
or performan
nce.
REFERE
ENCES
1 Aytac, E., 2010. “Lower Paleozoic Oil Potential

P of SE Turkey, Districtts X & XI” preseented at the Peetform Panels, A
Ankara,
January 11, 2010. http://ww
ww.petform.org.trr/images/yayinlar/sunum_ve_konnusmalar/aytac__eren.pdf.
2 Aydemir, A., 2010. “Potential Shale Ga as Resources Inn Turkey: Evaluuating Ecologicaal Prospects, Geeochemical Propperties,
Surface Acccess & Infrastruucture.” TPAO Turkish
T Petroleuum Corporation , presented at the Global Shaale Gas Summitt 2010,
Warsaw, Pooland, July 19, 2010. http://www..global-shale-gas-summit-2010.ccom/index.asp
3 M 2013. “Compparison of the Daadas Shale to thhe Woodford Shaale Developmennt.” TransAtlantic Petroleum, Feebruary
Mitchell, M.,
12.
4 Anatolia Energy, 2013. “U
Unlocking Turkeyy’s Shale Resources.” March, 2 013.
5 Gürgey, K., Philp,R.P.,, Clayton,C.,Em miroglu, H., annd Siyako,M., 2005. “Geocchemical and IIsotopic Approaach to
Maturity/souurce/mixing Estimations for Nattural Gas and Associated
A Conddensates in thee Thrace Basin, NW Turkey.” A
Applied
Geochemisttry, vol. 20, no. 11,p.
1 2017-20377.
6Sari, A., annd Kars,A.S., 20008. “Source Rock Characterization of the Tertiaary Units in Havssa-Edirne Area: Thrace Basin/TTurkey.”
Energy Sources, Part A: Reecovery, Utilizatioon, and Environm
mental Effects, vvol. 30, no. 10, pp. 891.
7 Aydmir, A., Basins of Turkeyy.” Presented att the AAPG European
A 2010. “Potential Unconventtional Reservoirss in Different B
Region Annual
A Conferrence, Kiev, Ukraine, Occtober 17. hhttp://www.searcchanddiscovery.nnet/abstracts/pddf/2010/
kiev/abstraccts/ndx_Aydemirr.pdf.
8 TransAtlanntic Petroleum, 4Q12 Preliminarry Financial and Operations Revview, March 19, 2013
June, 2013 XXVI-13

A - EIA - ARI - 2013 World Shale Gas and Shale Oil Resource Assessment

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A - EIA - ARI - 2013 World Shale Gas and Shale Oil Resource Assessment

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EIA/ARI World Shale Gas and

Shale Oil Resource Assessment

EXECUTIVE SUMMARY AND STUDY RESULTS .................................................................................................... 1-1

EXECUTIVE SUMMARY AND STUDY RESULTS

Three individuals, each a long-term member of Advanced Resources International, Inc.,

SUMMARY OF STUDY FINDINGS

Two-thirds of the assessed, technically recoverable shale gas resource is concentrated

Similarly, two-thirds of the assessed, technically recoverable shale oil resource is

Sub-Total 31,138 6,634

Sub-Total 5,799 286.9

Technically Recoverable Technically Recoverable

I. Canada 2,413 573 162 8.8

Australia III. Australia 2,046 437 403 17.5

Colombia 308 55 120 6.8

Poland 763 148 65 3.3

XIV. Morocco* 95 20 5 0.2

XX. China 4,746 1,115 644 32.2

Grand Total 31,138 6,634 5,799 286.9

COMPARISON OF STUDY FINDINGS

Table 4. Comparison of 2011 EIA/ARI Study and

Australia 396 437

Europe 624 883

Africa 1,042 1,361

Total 5,760 6,634

Table 5. Selected Comparison of 2011 and Current EIA/ARI Estimates

Table 6. Comparison of Scope and Coverage,

EIA/ARI 2011 Report EIA/ARI 2013 Report

Shale Gas Shale Oil

TOTAL 70 1161 35 47.7

*Woodford includes Ardmore, Arkoma and Anadarko (Cana) basins.

Roseneath-Epsilon-Murteree (Nappamerri) 307 89 17 1.0

June, 2013 Attachment C-1

Baltic Basin/Warsaw Trough Llandovery 532 105 25 1.2

N. UK Carboniferous Shale Region Carboniferous Shale 126 25 0 0.0

June, 2013 Attachment C-2

June, 2013 Attachment C-3

June, 2013 Attachment C-4

Muskwa/Otter Park 100% 75% 75%

Roseneath-Epsilon-Murteree (Nappamerri) 100% 75% 75%

June, 2013 Attachment D-1

Baltic Basin/Warsaw Trough Llandovery 100% 40% 40%

N. UK Carboniferous Shale Region Carboniferous Shale 60% 35% 21%

June, 2013 Attachment D-2

June, 2013 Attachment D-3

June, 2013 Attachment D-4

SHALE GAS AND SHALE OIL RESOURCE

RESOURCE ASSESSMENT METHODOLOGY

1. Conducting preliminary geologic and reservoir characterization of shale basins and

4. Estimating the risked shale gas and shale oil in-place.

1. Conducting Preliminary Geologic and Reservoir Characterization of Shale

 Depositional environment of shale (marine vs non-marine)

 Depth (to top and base of shale interval)

 Structure, including major faults

 Gross shale interval

 Organically-rich gross and net shale thickness

 Total organic content (TOC, by wt.)

 Thermal maturity (Ro)

Figure 1: Prospective Shale Basins of Argentina

Figure 2. Neuquen Basin Stratigraphy

Modified from Howell, J., et al., 2005

Figure 3: Neuquen Basin SW-NE Cross Section

Los Molles Gas Vaca Muerta Hydrocarbon Migration Pathways

Mosquera et al., 2009