exploration licenses in france

exploration licenses in france

  • Horizon is the operator and 100% interest holder in the Ger and Ledeuix exploration licenses in the Aquitaine Basin, SW France;
  • Interests are held through two wholly-owned Luxembourg subsidiaries
  • Ledeuix contains the Saucede discovery which was drilled in 1979 by ESSO with TD at 5,638m
  • Flow rates up to 21 MMscf/d averaged 10 MMscf/d during tests from reservoirs 4,500 – 4,800m
  • Well placed on production 08/1981 to 06/1985 with production rate 1.45MMscf/d declining to 0.46 MMscf/d – impacted by reservoir formation damage during drilling
  • Test data indicates likely well IP’s 25-30 MMscf/d
  • Cumulative production of 2 bcf.

Potential

  • Independent NI51-101 report assigned 719 bcf contingent resources to the Saucede structure
  • Upside potential in higher thrust sheets and structures in same naturally fractured reservoir
  • Best estimate Prospective Resources: 715 bcf, 114 bcf risked

Exploration and Development Strategy for the Permit

The French government has recently stated that it will no longer issue exploration permits. As well, the extension of current concessions will be gradually limited until they are phased out by 2040. The French government has also recently stated that it plans to pass legislation this year to phase out all oil and gas exploration and production by 2040.

This will not impact the Permit because it is an existing exploration permit. Furthermore, the Company intends to meet its financial commits on the Permit, which would ensure its continuance. Horizon management will be meeting with representatives of the BEPH (Bureau Exploration-Production des Hydrocarbures) in Paris in October, to discuss the Company’s plans for its Permit.

The Permit presents an opportunity to appraise and potentially develop Contingent Conventional Natural Gas Resources in a basin with ample existing gas infrastructure, and a well-developed gas market. Management and Directors of Horizon have expertise and experience in appraising, developing and monetizing naturally fractured reservoirs around the world with a number of oil and gas companies. Horizon’s strategy is to leverage that experience to target, acquire, develop and monetize these permits as well as similar gas resources in Europe. The scale of the target resource plays is such that they are immaterial to the large independents and major oil and gas companies but highly material to junior independents that have the technical and operating expertise and experience. The permits in France represent the first step in executing this strategy, and management has identified a number of potential follow up opportunities with significant undeveloped gas resources.

Ledeuix Exploration Permit

Well Test & Production Summary

Horizon holds a 100% interest in the Permit, which is located in the Aquitaine Basin of south-western France. The basin contains the largest natural gas fields in France: Lacq and Meillon, which combined have produced 11 TCF of gas to date. Hydrocarbons were sourced from the Lower Jurassic aged shales and marls, and have migrated into Jurassic and Cretaceous aged naturally fractured carbonate reservoirs contained in folded thrust sheets of the Pyrenean fold belt.

Eleven wells have been drilled in the Permit, with two of those wells testing hydrocarbons. Saucede-1 drilled in 1978 by Esso was a gas discovery flowing an average 9 MMscf/d over 19 days. It was placed on production 1981- 1985 and again in 1988 to 1993. The well produced a cumulative 1.85 BCF of gas from Lower Cretaceous and Jurassic aged naturally fractured carbonate reservoirs between 4,200 and 5,410 meters below sea level. Reservoir engineering analysis has indicated significant wellbore damage, caused by overweight drilling fluids and poor completion practices which could have resulted in poor well performance.

A number of leads have also been identified in different thrust sheets that have similar characteristics to the Saucede gas discovery at shallower depths that provide significant upside potential.

  • The Ledeuix permit is positioned in the North Pyrenean fold and thrust belt
  • The cross-section shows the subsurface structuring associated with the Pyrenean Oregeny and the location of the Ledeuix permit
  • The map to the right shows the regional structures in the South Acquitaine basin and the location of known hydrocarbon accumulations
  • The two largest gas accumulations in France sit just north and east of the permit
  • Seven prospective structures have been identified on the permit and are shown in the map below
  • These structures are individual thrust sheets which have been mapped by Petromanas over the permit
  • UPIIP best estimate of individual structures range from 41 Bcf up to 259 Bcf

Saucede Gas Discovery:

  • Drilled 1979 by ESSO with TD at 5,638 m
  • Difficult drilling condition compounded by inadequate blow out preventer leading to poor casing design
  • Tested gas from Jurassic aged naturally fractured carbonate reservoirs between 4,200 – 5,500m
  • Heavy drilling fluids to control high formation pressure above reservoir zones may have caused significant formation damage

Well Test & Production Summary

  • Flow rates averaged 21 MMscf/d during test
  • Well placed on production 08/1981 to 06/1985 with production rate 1.45MMscf/d declining to 0.46 MMscf/d
  • Cumulative production of 2 bcf
  • Esso test analysis concluded well was underperforming due to possible formation damage and poor completion practice:
  • Inadequate perforation density (one shot/ft.) and small gun size
  • Inappropriate acid strength leading to possible precipitation in reservoir casing possible blockage
  • Insufficient diversion for acid job resulting in only one zone being stimulated
  • Esso concluded that the zones were not fully evaluated

    Ledeuix regional cross-section

    Ledeuix prospective structures

    Potential:

    • Independent NI51-101report assigned 720 bcf contingent resources to the Saucede structure
    • Upside potential in higher thrust sheets and structures in same naturally fractured reservoir

    Ger Property

    • The map to the right shows the regional structures in the South Acquitaine basin and the location of known hydrocarbon accumulations
    • The Ger regional cross-section shows the positioning of the permit relative to the regional structuring
    • In the vicinity of the Ger permit most of the structuring appears to be related to the Basement fault blocks
    • There are four play tupes which have been identified by the Ger permit
    • The permit sits in front of the Ste-Suzanne thrust making these plays stratigraphic in nature.

    Ger regional cross-section

    Ger prospective structures