R5 960 MMbbl ultra-heavy oil exploration option with 7.4% development probability, requiring novel offshore thermal EOR technology. · Phase A Evaluation

Fynn Beauly

R5 Speculative · 8% Dev Probability

P2634 · Blocks 14/15a, 20d, 15/11a · JV: Orcadian 50% / Serica Norte 50%

← All Assets

Expected Value

$3.87

Risked at 8% dev prob

Unrisked FV

$48.38

IF developed

STOIIP P50

960 MMbbl

Massive resource base

Oil Viscosity

4,106 cP

Dead oil — GOR unknown

API Gravity

10.6°

Ultra-heavy

Dev Probability

>90% chance of zero

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Funding Crisis — Phase A Unfunded

Orcadian cash: £75,919 vs Phase A net obligation: £530,000. Funding gap: £454,081. Default could trigger JOA penalties. Serica acquisition of Parkmead adds further uncertainty.

Development Probability Tree

Factor	Probability	Note
Geological success	50%	Discovery proven, but uncertainty on structure
Viscosity acceptable	40%	Dead oil 4,106 cP — GOR never measured
Technology works offshore	30%	EM heating + polymer — no offshore precedent
Commercially viable	50%	Multi-billion capex, heavy oil discount
Orcadian funded	60%	£76k cash vs £530k gross (Serica fees offset net cost)
Combined (strict)	1.8%	Product of all factors
Adopted probability	8%	Rounded up for partial success / farm-out scenarios

Development Probability — Decision Tree

Sequential gate probabilities · Combined probability of full development ≈ 7.4%

Oil Properties — The Key Unknown

Dead Oil Viscosity

4,106 cP

Measured — extremely viscous

API Gravity

10.6°

Ultra-heavy oil

GOR

Unknown

Never measured — critical gap

Two Oils

Yes

14/15-2 encountered different oils in same well

Target Viscosity

<1,000 cP

Need GOR to reduce viscosity for polymer flood

Heavy Oil Discount

25%

10.6° API, likely high TAN. Realised ~$56/bbl

Development Concept

EM Heating

Acceleware RF-XL

TRL 8-9, proven onshore Canada, never offshore

Polymer Flood

After viscosity reduction

Needs oil at ~400 cP for injection

Geothermal

Deep permeable rocks

Supplementary heat source — evaluation stage

Well Patterns

45 patterns

Massive drilling campaign required

Capex (est.)

$2-5 billion

No published figure — derived from analogues

Peak Production

30-40k bopd

If everything works (optimistic)

Phase A Work Programme — JV Budget

Study	Cost (50%)	Status	Note
APT viscosity prediction	£75,000	Not started	Key study — determines if concept is viable
EM heating simulation	£150,000	Not started	Acceleware RF-XL antenna modelling
Polymer screening	£50,000	Not started	Viscosity reduction target ~400 cP
Reservoir modelling	£100,000	Not started	Simulation of EM + polymer system
Geothermal feasibility	£30,000	Not started	Deep permeable rocks evaluation
Seismic reprocessing	£125,000	Not started	Updated structural interpretation

Catalyst Timeline

H1 2025

Serica/Parkmead acquisition close

New partner may change work programme

H2 2025

APT viscosity study begins

First data on reservoir oil behaviour

2026

Viscosity results + EM simulation

Go/no-go on development concept

Feb 2027

Drill-or-drop decision

Phase A → Phase B transition. 960 MMbbl optionality warrants retention.

2028

Appraisal well (if funded)

Prove concept, enable farm-out to major

2030+

Development decision

If everything works, FID for $2-5bn project

2034+

First oil (optimistic)

First distributions to R5 holders

R5 Sensitivity Analysis

Expected value impact — dev probability IS the sensitivity

Source: Albion DCF Model v2.0

EOR Technology Comparison

RF Heating Upside

Acceleware RF XL technology (TRL 8-9, Marwayne pilot onshore Canada) heats connate water in-situ via radio waves, mobilising viscous oil without steam, fresh water, or solvents. Lower emissions than SAGD/CSS. STOIIP range: 602–1,343 MMbbl.

Scenario	Recovery Factor	Recoverable (P50)	Range	Status
Current 2C (polymer)	30.7%	292 MMbbl	—	Base case
RF Heating (40% RF)	40%	384 MMbbl	241–537 MMbbl	Upside
RF + Polymer combo	45%	432 MMbbl	271–604 MMbbl	Blue sky

RF Heating Advantages

• No steam — no fresh water needed

• No solvents — no chemical supply chain

• Lower CO₂ emissions than SAGD/CSS

• In-situ heating — no surface processing of heat

• Scalable via well patterns

Risks & Unknowns

• Unproven offshore (all pilots onshore Canada)

• Offshore power supply for RF transmitters

• NSTA regulatory pathway for novel offshore EOR untested

• Capital cost at commercial scale uncertain

• Reservoir heterogeneity may limit sweep

Near-term hold cost de-risked: Serica pays Orcadian for technical work on Phase A, reducing net obligation. Retaining 960 MMbbl STOIIP optionality at minimal cost is recommended over relinquishment.

Lowlander Discovery

Same Licence — P2634

Lowlander is a separate light oil discovery on block 14/20b within P2634. Unlike Fynn Beauly's ultra-heavy oil, Lowlander contains 39.5° API light oil — but with a critical complication.

STOIIP P50

93.8 MMbbl

Light oil

Recoverable P50

23.4 MMbbl

25% RF

API Gravity

39.5°

Light oil — high value

H₂S Content

24,000 ppm

Lethal — major hazard

Working Interest

50%

Orcadian 50% / Serica Norte 50%

Commodity

Light oil with extreme H₂S

24,000 ppm = 2.4% — requires sour gas processing

Tieback Potential

Future Fynn infrastructure

Could share FPSO if Fynn proceeds

Status

Undeveloped

No current work programme — contingent on Fynn progress

Key Risk

H₂S processing

Lethal concentration. Specialist metallurgy + gas sweetening required. Adds >$200M to FPSO cost.

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Binary Bet — Exploration Option

R5 is NOT a yield investment. It is a call option on 960 MMbbl STOIIP (+ 93.8 MMbbl Lowlander upside). >90% probability of zero distributions. ~8% probability of $48+/token unrisked. The upside is massive IF the viscosity study proves workable oil and a major farms in. Position sizing must reflect this binary nature.