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<p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><strong>Conventional Vs Unconventional Plays</strong></span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Conventional gas reservoirs contain free gas in interconnected pore spaces that can flow easily to the wellbore i.e. natural flow is possible. In conventional natural hydrocarbon reservoirs, the hydrocarbon is sourced from organic-rich shales which had migrated to these nearby sandstone or carbonate reservoirs, over geologic time. Unconventional reservoirs produce from low permeability (tight to ultra tight) same i.e Shale which has moderate porosity but extremely low permeability and therefore, the hydrocarbon trapped within the rock, can&#39;t move of its own. Therefore, it is necessary to stimulate the reservoir by creating a fracture network to jive enough surface area for the hydrocarbon to follow to the well bores. Thus, in the development of conventional resources, the hydrocarbons migrate from source rock to a reservoir rock, where they are trapped within the same formation for unconventional shale plays.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><strong>Avoiding conflicts through a single operator</strong></span></span></span></p> <p style="text-align: justify;">&nbsp;</p> <p style="margin-left: 0.25pt; margin-right: 0in; text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">There are many fields / basins where conventional and unconventional for unconventional plays. There are many examples in the U.S. such as Cotton Valley sandstones and Haynesville shale in the Gulf Coast basin, Medina-Clinton sandstones and Utica-Marcellus shales in the Appalachian basin, Dakota sandstones and Fruitland coals in the San Juan basin, Madison-Red River carbonates and Bakken shale in the Williston Basin, etc. We find similar phenomenon outside of the U.S. in the Western Canadian basin of Canada, the Cooper basin of Australia, and the Neuquen basin of Argentina. The global practice is to allow pursuing the conventional and the unconventional hydrocarbons together by the same operator and not conversely. Any shale play campaign require significant infrastructure in form of logistics, water and frac chemicals etc. Thus, multiple operators working in the same license area for conventional and unconventional hydrocarbons is bound to create operational conflicts between operators and is not a global practice.</span></span></span></p> <p style="margin-left: 0.7pt; margin-right: 0in; text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Additionally, frac for one play type (say for unconventional) designed by one operator can adversely impact the production of other play type (conventional) of another operator. As an example, any frac for shale play at a lower section if not planned properly may damage the upper reservoir or maybe even an underlying reservoir, depending upon the formations. Overlapping licenses with simultaneous operations will pose significant HSE risks &nbsp;&amp; operational conflicts, would lead to conflicting claims 10 resource ownership, inefficiencies in optimal utilisation of capital, among others. It is far better to acknowledge that existing licenses provide exclusive rights to explore for and develop all hydrocarbon resources in a block. Therefore, it is more logical to award both the play types to the same operator.</span></span></span></p> <p style="margin-left:.7pt; margin-right:0in; text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source:SNP Infra Research</span></span></span></p>