Operational Review 2012
In 2012, having previously acquired the first modern 3D seismic survey in The Bahamas (covering 3,074 km2), the Company completed the initial processing of the data (Fast Track) in January and the final processed volume, a pre-stack depth migration (PSDM), was completed in August. These data contain over 4 trillion bits of information and provide a very high resolution picture of a significant portion of the Southern Licence area. The PSDM is currently being utilised to improve
our understanding of the hydrocarbon potential and volumes, select appropriate drill sites and to guide well planning.
- Both the Fast Track and the final data were utilised by consultants at The University of Texas (UT), Bureau of Economic Geology (BEG), Reservoir Characterization and Research Lab (RCRL) to construct a detailed seismic facies analysis of the southern licence area.
- In conjunction with the UT study, iReservoir completed a detailed evaluation of the log data, particularly from the Doubloon Saxon well, and used these data to complete a seismic inversion of the Fast Track data.
- The University of Miami, Carbonate Sedimentology Lab (CSL) completed the interpretation of the multibeam survey previously collected over a portion of the southern licences.
As a result of this work regional stratigraphic control has been tied to the seismic at the Mid-Cenomanian Unconformity (MCU); a comprehensive seismic facies analysis has been completed; key horizons from the intra Jurassic to the intra Tertiary have been remapped; and, the Doubloon Saxon well petrophysics and lithology have been carefully tied into the overall interpretation.
Thus the understanding of the geologic history and hydrocarbon potential has been significantly advanced, most specifically, the assessed seal risk has been considerably reduced and the hydrocarbon potential increased in the lower stratigraphic horizons of both Folds B and C.
- Industry interest in the area increased with three wells drilled into the North Cuba Basin on the northwestern side of Cuba.These wells, drilled by Repsol, Petronas and PDVSA, were plugged and abandoned however each encountered indications of a working hydrocarbon system. A fourth well operated by the Russian company Zarubezhneft was spud late December 2012 and continues drilling into May 2013.
- Sufficient confidence was derived from interpretation of the Fast Track results to proceed with a Front End Engineering Design (FEED) study to construct an initial well plan. This included a review of the previously drilled wells and provides plans for the safe drilling of a 22,500 feet deep exploration well. This well is estimated to take up to 120 days to drill and log (P50 case). The ultimate well cost is highly dependent on spread rate but is anticipated to be in the $100-$120 million range.
2D Seismic Interpretation – Competent Persons Report
In 2011, 1,100 line kilometres of 2D seismic data was acquired followed by an independent assessment of the hydrocarbon potential in the southern licences by RyderScott Competent Persons Report – CPR). Their evaluation documented that three of the four structures mapped have an unrestricted potential in excess of 1 billion barrels of recoverable oil. The report addressed the chance of success for each structure ranging from 23% to 35% with the major residual risks being identified as source and charge. However, it is important to note that this report dealt only with the Aptian through top Cretaceous interval. Subsequent work continues to confirm that significant potential exists in the lower Aptian and deeper section and marks the primary target for drilling.
D Seismic Interpretation
A major milestone of 2012 was the receipt of the processed 3D seismic data from the Southern Licence area. These data were collected by CGGVeritas using their “BroadSeis” technology. An early volume, “Fast Track”, of the data was delivered in January 2012; and the final pre-stack depth migration (PSDM) processing was delivered in August 2012. Sample spacing on the PSDM volume is 12.5 metres horizontally and 4 metres vertically. The data are of high quality and are now being used to advance our understanding of the hydrocarbon systems. The 3D confirms and better defines the prospective structures (Folds B and C) previously mapped on the 2D and evaluated in the CPR, whilst removing structures mapped on the 2D underneath Trend A, which were confirmed as velocity artifacts. Significantly, the new data provides insight into the residual risks with encouragement regarding source potential and fetch area, indicating the basement to be deeper than previously mapped amplying a thicker, deeper Upper Jurassic (source rock) interval. Furthermore, the interpretation shows a uniform south west dip under the Cretaceous platform (Trend A) indicating access to a larger than previously mapped fetch area toward the Cuban mainland under the North Cuban basin. Faulting continues to display a distinct overthrust character turning horizontal in the interpreted organic-rich facies of the late Jurassic. The seismic displays good correlation across faults giving high confidence in the fault picks.
The folding shows distinct rollover above the fault plane creating significant attic volumes above any migration entry or exit point to the structure. A structure map near the late Cretaceous level (Figure 2) shows clearly the carbonate platform/reef edge (Trend A) and the distinctive features Fold B and Fold C. The tops of these features at this horizon are at a depth of between 700 and 900 m, structures are continuous on strike for 75 and 25 km respectively with obvious closure. Vertical relief is between 350 and 750 m. In total Fold B displays closure at this horizon exceeding 400 km² and Fold C over 60 km². At the Albian level the earlier platform/reef edge is clearly visible and displays significant karstified weathering. Ahead of the reef edge it has been possible to map a starved basin mudstone that covers Fold C and most of Fold B. This mudstone would likely be an effective seal and would not have been penetrated in any of the previously drilled wells. Considerable vertical relief in the both of these structures is preserved down below the Aptian horizon at a depth of between 2,400 m and 3,250 m and certainly well below the first anhydrite salt horizon which shows itself clearly on the seismic.
Seismic Interpretation integration
The last oil exploration well drilled in The Bahamas was completed in 1987, located on the edge of the existing great Bahama bank within the Donaldson licence some 25 km from the crestal location at Fold B. Drilled on the back of poor quality 2D seismic it is difficult for us now to interpret any trap at this location (Figure 3) as there is very little residual data once noise is filtered out. Ideally the modern 3D data would have been tied directly into this well location, but water depth and acquisition technique precluded this. However, it has been possible to merge, with good correlation, the 3D into the historic data at the Fold B location highlighting the distinctive structuring based upon better imaging of reflectors at depth as well as the better polarity, amplitude and frequency character of the 3D slice compared to the 2D.
As part of interpretation efforts iReservoir were contracted to generate an inversion of the Fast Track data. An inversion seeks to identify rock properties from the seismic signature and tie these properties directly to rock types. This technique involves careful analysis of the log data from the previously drilled wells to tie the lithology seen in those wells directly to a specific seismic response. The result of these efforts is an excellent tie of the rock types seen in the Doubloon Saxon #1 well (only available through the Company data room) to the 3D data volume (Figure 3). Thus now, in combination with other data, these seismic attributes can be used to better understand how the lithology and possibly fluid content may vary across the entire area of the acquired 3D (Figure 4). This study adds further evidence that the best potential exists in the lower Cretaceous where the regionally extensive evaporite beds begin to occur. The inversion indicates this interval to comprise interbedded anhydrite and dolomite and can most clearly be seen in Figures 3 and 7.
RCRL have completed a seismic facies interpretation on vertical slices every 200 crosslines (2,500m spacing) and structure maps on fourteen individual stratigraphic horizons from the Tertiary drape, through the top Cretaceous Pelagics, the Upper Cretaceous platform, the Albian down to the first anhydrite occurrence into the Lower Cretaceous and the base of the high amplitude evaporite zone and finally into the late Jurassic (Callovian) – the results of which are most clearly shown and summarised in Figure 4.
- The seismic facies interpretation documents the evolution from a shallow water restricted basin, through gradually deepening water depth, to a carbonate “mega bank”, breakup of the megabank into isolated platforms and deeper water channels and finally cessation of growth and burial of the carbonate platform by deeper water sediments (Figure 5).
- Their work has provided some additional encouragement for seal potential above the evaporite (anhydrite) section. By carefully tying the sequences to nearby deep ocean drill sites with biostratigraphy they can project where known Oceanwide Anoxic Events (OAE) would occur. Elsewhere in the Gulf of Mexico the OAE zones correspond to shale (probable seal) intervals: (Figure 6).
- The top Cretaceous reef and platform can be shown to tie to the mid Cenomanian unconformity, a Gulf wide event: (All Figures).
- The sink hole/karst features seen on the sea bottom and at the top of the mid Cenomanian platform can be shown to extend downward to the top Albian karsted surface. The possible gas escape features could be sourced as deep as the top Albian below Trend A.
This work has reduced seal risk by identifying potential starved basin mudstones draped over Fold C and most of Fold B, which would not have been penetrated in the previously drilled wells, identified regionally extensive anhydrite beds now mapped from as shallow as approximately 13,000 feet and allowed the mapping of intervals below base Aptian with greater confidence. The Lower Cretaceous/Upper Jurassic section is now considered the primary target – hence planned drilling depths past 20,000 feet. These units are interpreted to consist of interbedded reservoir (dolomite), and seal (anhydrite). The top of this interval ties to the anhydrite interval already seen in the base of the Doubloon Saxon #1 well from logs, chippings and core – a conclusion further supported by this seismic inversion analysis. The detachment surface that accommodates the major thrust faulting is readily mappable and occurs below the base Lower Cretaceous in what is interpreted to be the organic rich shales of the Upper Jurassic – this would act as the link between the interpreted source below and the reservoir rocks above.
towards potentially successful commercial oil exploration. Most of this deeper section is below the intervals assessed in the CPR released in 2011. It is the section we previously indicated as having ‘significant unevaluated potential’. As regards the risk estimates that are indicated in the CPR, additional seal encouragement exists with the identification of the Albian mudstones. As mapped the closure of the Fold B structure extends some 78 kilometers along strike with a vertical closure of over 850 metres.
This shows a vertical section through the 3D dataset 25 km long and 8 km deep. Geological horizons, shown in colour, are tied directly to previously drilled wells and record the evolution from hypersaline basin to north east facing reef/platform margins and basin morphology.
3D Structure maps displayed at different stratigraphic horizons and related directly to the 3D section. The considerable dimensions of these structures both shallow and deep in the section are denoted recognising their aggregate global scale.
To the left: shows the drilling location of the Doubloon Saxon – 1 well drilled in 1987 superimposed on the historic 2D data devoid of character and structure. Compare this to the inserted slice of recently acquired 3D data displaying better polarity, amplitude and frequency character. To the right: a synthetic section based upon log, cuttings and core data superimposed and correlated to the 3D section.
Stratigraphic model and major events. This is a summary of the regionally significant stratigraphic events as identified by the Reservoir Characterization Research Lab at The University of Texas. As the continental margin subsided following the breakup of the continents in the Jurassic the initial sediments were deposited in a restricted marine environment (grey and purple). It is in the first layer (grey) that we believe our source rocks were deposited. The purple layer records a regionally extensive evaporitic basin where anhydrite (seal) and dolomite (reservoir) were deposited. As the water depth deepened an extensive carbonate platform, or “megabank”, was created (green through light blue-Aptian through lower Albian). As the water depth continued to deepen the megabank divided into distinct reef and platform areas separated by deeper water areas. This lasted until mid-Cenomanian (top of the light orange) when the water depth became too deep for the reef and platform facies. During the overall trend of deepening water depth there were times when sea level dropped and the reef and platform areas were exposed and caves and caverns developed (dark orange). This seismic facies framework is used to help us better interpret rock types from the seismic and is key to our well planning.
Shows an example of the karsted surface on top of the Albian reef.
Karsted platform top: The irregular surface of the Upper Albian platform results in discontinuous seismic reflections.
Shows the onlap of deeper water facies onto the Albian reef. Note the very high quality of the seismic data and the younger Cenomanian reef and platform shallower and to the left.
Shows the high amplitude high frequency nature of the deeper section. The peaks (blue) are interpreted as anhydride, the troughs (yellow) are interpreted as porous dolomite. It is this section that contained the oil shows in the previously drilled wells. This interval is our primary target for exploration.
Well Design Montage.
Geological section through well location.
Utilising the 3D data, the seismic facies mapping, detailed prospect inventory work, the multibeam data collected in 2011 and incorporating data from previous drilling in the area Advanced Drilling Technologies (ADTI) have provided initial well designs and drilling plans (Figure 8), as well as specifically identified long lead time items to discharge licence obligations. Currently these long lead items are identified as the large bore wellhead with H²S resistant metallurgy (and appropriate running tools) and a rig that can accommodate “managed pressure drilling”. The plan has safety and environmental components consistent with international waste and emissions standards as well as response plans for emergency situations. The well – named Perseverance – is designed to target the Jurassic at or around a TD of 22,500 feet located on the crest of Fold B (Figure 9) at the south-eastern end of the structure. This location will fully evaluate those resources identified in the competent person’s report at the late Cretaceous, Albian and late Aptian horizons but significantly is also designed to target the additional prospectivity now the focus of the Company’s attention in the inter bedded anhydrite, dolomite and limestone reservoir sequences in the Early Aptian and below. Drilling is anticipated to be in approximately 1,500 feet of water, which by today’s modern standards is relatively modest (see page 31), to take 120 days to execute and log. The ultimate well cost is highly dependent on spread rates and is still anticipated to be in the US$100 million – US$120 million range. It is further anticipated that the rig will carry additional safety related equipment based upon Gulf of Mexico incident experience as Bahamas Petroleum Company is committed to employing the best planning, preparation and equipment for the drilling conditions anticipated in the subsurface.
As Bahamas Petroleum prepares to drill its well, international oil companies have increased activity offshore Cuba. Three offshore wells drilled during 2012 on the Western side of Cuba were plugged and abandoned. These wells were drilled by Repsol, Petronas and PDVSA. Each of these wells reportedly encountered shows in both the Tertiary and the Cretaceous section but were not considered commercial at these locations. It is important to note the geology where these wells were drilled is considerably different from the geology in Bahamian waters. In western Cuba, where these wells were drilled, the Mesozoic carbonate rocks are buried beneath a deep Tertiary basin. A 15,000 foot exploratory well would need to drill through as much as 13,000 foot of Tertiary cover and only penetrate the uppermost portion of the carbonate platform rocks of the Late Cretaceous; well short of the deeper section where confidence in seal is increased. In addition the trap styles, fault bounded high standing horst features, are considerably different and considered higher risk than the thrust related, four-way dip closed anticline structures found in The Bahamas. Thus Bahamas Petroleum does not believe their result has a negative impact on the assessment of the potential in Bahamian waters.
Scarabeo 9 drill rig used in Cuban Drilling
A well drilled to between 15,000 and 16,000 feet at locations in Cuba would only be able to intercept the upper portion of the mesozoic carbonate section because of the thick Tertiary cover. Whereas at a location on Fold B within the Company licences a well to a similar depth would be able to penetrate the regional anhydrite seal and reach the additional prospectivity of the Lower Cretaceous.
Bahamas Petroleum continues to seek an industry partner to join in the drilling and opened a data room for the period of May 2012 receiving a number of offers to farm-in to its licences, none of which were accepted, as they were deemed to be too heavily discounted. Discussions remain ongoing with a number of interested parties, but the basis for these discussions has benefited significantly from the renewed clarity provided by the Government in early 2013 regarding a clear mandate to carry out an exploratory drilling programme.
New Licence Applications
The company has applied for two additional licenses in the Santaren Channel and a further three licences in joint partnership with Statoil. In the joint-venture with Statoil an Environmental Feasibility Study (EFS) has been submitted and is currently under review by The Bahamas Environmental, Science and Technology (BEST) Commission and their consultants. A decision on these applications is expected in 2013. See New Licence Applications page.
2013 and 2014 Outlook
Since the time of licence award and before, the Company has worked diligently to collect all available historic geological and geophysical data and where possible re-examine using modern technologies and interpretative techniques. At today’s prices the data would have cost hundreds of millions of dollars to acquire. Integration of all of this data, new and historic, confirms The Bahamas has ‘World Class’ petroleum potential, with multiple, very large traps identified. Well data confirms the reservoir potential; seismic and well information provide encouragement for sealing intervals; and, the regional geology provides evidence of the likelihood of rich source rocks in the Upper Jurassic. There remains a variety of different play types within our acreage; reef margin plays similar to Golden Lane in Mexico, fore reef debris and breccia plays similar to the Canterell complex, very large foreland basin structures comparable in geology and size to many fields in the Middle East and possible deeper rift basin structures.
Therefore the outlook for Bahamas Petroleum Company is encouraging as we gear up for drilling, expected to start between mid-year 2014 at the earliest but potentially closer to the end of 2014. Ongoing work will continue with a greater focus on detailed prospect evaluation and volumetric analysis. Whilst inversion, attributes, anomaly and DHI analysis will remain ongoing to high-grade drilling locations with a capacity for multiple targets, it is not anticipated that further work will lead to a significant reduction in risk. A new emphasis will be on detailed drilling planning work as we progress with designing the exploration well in the context of the new environmental and safety regulations, anticipated new standards and required equipment specifications. Technical studies and projects currently underway which the Company expects to detail during the year are:
Development of an extensiveprospect inventory;
Detailed volumetric analysis of the high graded inventory;
Site specific drilling plans; and
Emergency Management Plans (EMP) for possible drill sites. Each comprising oil spill analysis for worst case discharge, oil spill response plans and specific compliance documentation.
A key priority this year will be to close the farm-out discussions as soon as possible and review options over drilling rig selection, long lead item selection, procurement plans and scheduling. In response to these activities we will be looking to broaden skill sets of the employed staff continuing to build our technical team to best manage the exciting transition from wholly subsurface to drilling activities. We will be continuing to push for the and BDR listing on the Bahamian International stock exchange and whilst a lot of work has already been done in preparation of the prospectus there will no doubt be considerable work in support of coming to the market.