Page 1 of 35 Faroe Islands-Licence 005 ECMS Doc No: 318905 Well 6004/8a-1 Results and Revision: 1 Remaining Prospectivity Exploration Date: 11 October 2011 Faroe Islands-Licence 005 Well 6004/8a-1 Results and Remaining Prospectivity Final Evaluation Rev Date Description Originator Reviewed Checked Approved 0 Sept. 2011 First Issue EA/GB/SB/MR/PM EA/GB EA 1 Oct. 2011 Final Issue EA/GB/SB/MR/PM EA/GB EA MS ENIUK_n318905_v1_Faroe-Lic_005_Remaining_Licence_Prospectivity.doc 1 This document is CONFIDENTIAL and it is the property of Eni Denmark B.V. It shall not be shown to third parties nor shall be used for reasons different from which it is issued. Page 2 of 35 Faroe Islands-Licence 005 ECMS Doc No: 318905 Well 6004/8a-1 Results and Revision: 1 Remaining Prospectivity Exploration Date: 11 October 2011 DISTRIBUTION: Copy No. Name Department Company Paper Copies 1 E. Antonielli EXP Eni Denmark B.V. 1 Anne Stewart Library Eni U.K. 1 Carlo Zollino Archivio SEBU-ARMA Eni S.p.A. E & P Division 2 Heri Ziska Geology Jardfeingi (Faroe Directorate) Electronic Copies 1 ECMS 318905 ENI Denmark B.V. 2 Heri Ziska Geology Jardfeingi (Faroe Directorate) Original Archive Document Control ENI Denmark B.V. ENIUK_n318905_v1_Faroe-Lic_005_Remaining_Licence_Prospectivity.doc 2 This document is CONFIDENTIAL and it is the property of Eni Denmark B.V. It shall not be shown to third parties nor shall be used for reasons different from which it is issued. Page 3 of 35 Faroe Islands-Licence 005 ECMS Doc No: 318905 Well 6004/8a-1 Results and Revision: 1 Remaining Prospectivity Exploration Date: 11 October 2011 CONTENT: 1. EXECUTIVE SUMMARY........................................................................................4 2. GEOLOGICAL SUMMARY ....................................................................................7 2.1 Geological Setting and prognosis .......................................................................7 2.2 Well Objectives.......................................................................................................8 2.3 Target Definition ....................................................................................................8 2.4 TD Criteria...............................................................................................................8 2.5 Summary of the well results ...............................................................................9 3. POST DRILLING SEISMIC INTERPRETATION..........................................15 3.1 Seismic Data Volume..........................................................................................15 3.2 Stratigraphic and sequences calibration .........................................................20 3.3 Anne-Marie structure regional interpretation ................................................23 4. LICENCE 005 RESIDUAL POTENTIAL..........................................................27 4.1 T50/T45 (post-Basalt) section ..........................................................................27 4.2 The T45/T36 section ...........................................................................................29 4.3 The T35 and older section .................................................................................31 4.4 Final conclusions..................................................................................................34 5. ANNEX 1: REPORTS DELIVERED TO JARDFEINGI AND JV PARTNERS ........35 5.1 ENI IN HOUSE REPORTS:.................................................................................................35 5.2 OUTSOURCED CONTRACTORS REPORTS:....................................................................35 ENIUK_n318905_v1_Faroe-Lic_005_Remaining_Licence_Prospectivity.doc 3 This document is CONFIDENTIAL and it is the property of Eni Denmark B.V. It shall not be shown to third parties nor shall be used for reasons different from which it is issued. Page 4 of 35 Faroe Islands-Licence 005 ECMS Doc No: 318905 Well 6004/8a-1 Results and Revision: 1 Remaining Prospectivity Exploration Date: 11 October 2011 1. EXECUTIVE SUMMARY The Licence 005 is located in the Faroese sector of the Faroe-Shetland Basin and it has been operated by Eni Denmark B.V. with a 25% interest, along with the co- venturers Dana Petroleum (25%), OMV (20%), Cieco E&P (12.5%), Faroe Petroleum (12.5%) and First Oil Expro (5%). The Anne-Marie Prospect was drilled by the 6004/8a-1 vertical exploration well, located in 1106m of Water Depth, about 100 nautical miles from the nearest marine base (Runavik). The original targets were the clastic terms of the Palaeocene, T50/T45, T40/T38, T36/T31 (and additionally T10 and Mesozoic) in a low relief, four-way, structural closure. The drilling programme included coring and a comprehensive wire-line formation evaluation programme. The Seadrill West Phoenix deepwater semi-submersible rig spudded the well on the 23rd July 2010 and reached the commitment TD of 3941m MDRT (-3901m TVDSS, as per the licence obligations) on 23rd October 2010. Upon completion of the logging program the 6004/8a-1 well was safely plugged and abandoned: the West Phoenix Rig was then released from contract at 00:15 hrs of 11th November 2010. Three significant gas shows intervals were crossed in the Palaeocene Sequence, from 2854.5m to 2965m (Flett Volcanic Series), from 3392m to 3440m (Lamba 1) and, finally, from 3734m to virtually TD (Lamba 2, Kettla Tuff Member and Vaila Volcanic). A considerable amount of high quality data have been acquired in Anne Marie well; however, due to the peculiar “unconventional” geological setting, their interpretation was not straightforward and it took a significant amount of time to be completed. A reconstruction of the geological setting by means of calibrated regional seismic interpretation and multidisciplinary analysis, matching all independent observations (GWD, core, log, MDTs,), finally produced a satisfactory integrated interpretation. The analysis highlighted the absence, or minimal quality, of any effective reservoir in the gas shows intervals. Even with an optimistic approach, the Anne Marie well data clearly demonstrate the absence of any accumulation of potentially commercial size: a GOIP of 177Gft3 is estimated. No remaining Prospectivity worth of consideration is recognised within Licence 005. No further technical work could be carried out, that could significantly change the above perceptions. Remark: For detailed description of the Drilling and Subsurface Operations, please refer to the ANNE-MARIE 6004/8a-1 EXPLORATION WELL END OF WELL DRILLING REPORT (issued April 2011) and the FINAL WELL GEOLOGICAL REPORT (issued October 2011) ENIUK_n318905_v1_Faroe-Lic_005_Remaining_Licence_Prospectivity.doc 4 This document is CONFIDENTIAL and it is the property of Eni Denmark B.V. It shall not be shown to third parties nor shall be used for reasons different from which it is issued. Page 5 of 35 Faroe Islands-Licence 005 ECMS Doc No: 318905 Well 6004/8a-1 Results and Revision: 1 Remaining Prospectivity Exploration Date: 11 October 2011 Fig. 1: Location Map ENIUK_n318905_v1_Faroe-Lic_005_Remaining_Licence_Prospectivity.doc 5 This document is CONFIDENTIAL and it is the property of Eni Denmark B.V. It shall not be shown to third parties nor shall be used for reasons different from which it is issued. Page 6 of 35 Faroe Islands-Licence 005 ECMS Doc No: 318905 Well 6004/8a-1 Results and Revision: 1 Remaining Prospectivity Exploration Date: 11 October 2011 Licence 005 Jv : Eni Denmark Bv Oprt. 25% DANA 25% OMV 20% CIECO 12.5% Faroe Petroleum 12.5% First Oil Expro 5% GEOG. SYSTEM/GRID: Spheroid WGS84, Datum ETRF89 / UTM Zone 30, CM 3° West SURFACE LOCATION LAT/LONG : 60° 49' 14.667" North 04° 33' 55.327" West SURFACE LOCATION UTM : 6 743 836.40m North 414 864.60m East BOTTOM HOLE LOC. LAT/LONG :60° 49' 13.934" North 04° 33' 52.947" West BOTTOM HOLE UTM :6 743 812.87m North 414 900.01m East DISPLACEMENT AT TD : 51.95m WATER DEPTH : 1106.35m RIG/TYPE : West Phoenix / Deepwater Semi submersible REFERENCE DATUM (RTE) : 38.65m PERMANENT DATUM : Mean Sea level RIG ON CONTRACT : 12/07/2010 SPUD DATE : 23/07/2010 DATE WELL AT FINAL TD : 23/10/2010 RIG OFF CONTRACT : 11/11/2010 TOTAL DAYS : 118 TOTAL DEPTH (DRILLERS): 3941m MD 3902.35m TVDSS TOTAL DEPTH (LOGGERS): 3943m MD 3904.35m TVDSS BHF :Vaila Eq., Palaeocene - T35 RESULT :GAS (three intervals w/ shows) Reservoir :Tuffs, weathered volcanic, silty-sst GOIP estimated : combined mean 177Gft3 STATUS : P&A Final classification : Gas discovery CONTRACTORS: DRILLING: Seadrill DRILLING FLUIDS: Baker Hughes MWD/LWD: Pathfinder WIRELINE LOGGING: Schlumberger MUDLOGGING: Geoservices CORING: Halliburton BIOSTRATIGRAPHY: Ichron Fig. 2: Well 6004/8a-1 (Anne-Marie) basic data summary ENIUK_n318905_v1_Faroe-Lic_005_Remaining_Licence_Prospectivity.doc 6 This document is CONFIDENTIAL and it is the property of Eni Denmark B.V. It shall not be shown to third parties nor shall be used for reasons different from which it is issued. Page 7 of 35 Faroe Islands-Licence 005 ECMS Doc No: 318905 Well 6004/8a-1 Results and Revision: 1 Remaining Prospectivity Exploration Date: 11 October 2011 2. GEOLOGICAL SUMMARY 2.1 Geological Setting and prognosis Licence 005 is located in the lightly explored Faroese sector of the Faroe-Shetland Basin and covers an east-west trending splay off the Westray-Corona Ridge that separates the Faroe sub-basin to the north from the Judd sub-basin to the south. The licence lies within the larger area covered by a thick extrusive Palaeogene basalt