The report analyses international conventional exploration performance in 2016 and over a five-year exploration cycle, together with 2017 exploration drilling plans. A group of active mid and large sized E&P companies are used as a benchmark peer group and global frontier and high impact exploration across the whole industry is examined. The analysis covers:
- Key discoveries in 2016
- Systematic benchmarking of exploration performance over a 5 year cycle and analysis of global trends
- Key basins and plays with success factors and failure analysis
- Global frontier and high impact exploration
- Success rates and finding costs by play type, basin and geography
- Pre-drill risking versus actual commercial success rates
- The conversion of discovered resources to reserves
- Company exploration strategy in a lower oil price world
- Analysis of the key wells and plays targeted in 2017
Every exploration well drilled by these companies in 2012-16 has been analysed, together with global frontier and high impact wells drilled by the wider industry, based on published company reports and Westwood’s own assessments. Westwood Energy has judged the likelihood of a commercial development for each successful well and made estimates of the most likely recoverable volumes. Resource estimates for pre-2016 wells have been reviewed in the light of recent appraisal or development activity.
Amongst its key conclusions, it reveals that:
- Commercial oil and gas volumes discovered fell to a nine-year low in 2016, as the ‘lower for longer’ oil price scenario caused companies to reduce exploration programmes further, with less exposure to frontier, especially deep water, and emerging play drilling.
- The diminished 19 well frontier programme delivered only one commercial success, a modest sized gas discovery offshore India. Frontier oil exploration continues to fail to replenish the emerging play prospect inventory, which is acting as a break on future oil exploration performance.
- The commercial success rate was the highest in nine years at 35 per cent, eight percentage points higher than 2015, with success rates improved on the lower well count in proven plays and proportionally fewer high risk frontier wells.
- Overall drilling finding costs increased to $2.0/boe in 2016 from $1.6/boe in 2015 due to the lack of large frontier and emerging play discoveries and much smaller average discovery sizes. Oil prospect finding costs averaged $3.1/bbl in 2016 – slightly down on the $3.4/bbl recorded in 2015.
- 88 per cent of the gross 17.4 bnboe discovered by the 40 E&P peer group companies since the start of 2013 is still at an appraisal stage, reflecting a marked slowdown in resource progression to production due to the oil price fall.
- Exploration drilling plans for 2017 would suggest a slightly higher (~10 per cent) drilling count than in 2016. Plans are still fluid, however, and the number of wells drilled in the first quarter of 2017 was down 35 per cent on the same period in 2016, with a record high average commercial success rate of ~60 per cent.
- 62 high impact wells are planned globally for 2017, targeting 19.5 bnboe (unrisked), 37 per cent of which is oil. 24 of these wells are targeting frontier plays, 11 of which are in the Atlantic margins and the Norwegian Barents Sea.
Each company is assessed on gross and net wells drilled, commercial success rates, discovery sizes, net discovered volumes of oil and gas per well and finding costs. Westwood also collects information regarding the type and nature of the prospect being drilled; e.g. the primary target, prospect type and play maturity, together with a failure analysis of unsuccessful wells where possible.
The analysis allows insight into success rates and finding costs across geographies, different basin types and between exploration plays. Exploration drilling plans for 2017 have been analysed including pre-drill prospect volumes and risks. Forecasts of drilling activity by country, basin, play type and maturity provide insights into how exploration strategy is evolving and the outlook for discoveries in the year ahead.
- Significant discoveries in 2016
- REP40 Exploration performance 2012-2016
- Geographic and geological focus
- REP40 Company benchmarking 2012-2016
- Global frontier and high impact exploration, 2012-2016
- Pre-drill risking – the effectiveness of analogue play statistics
- Resources to reserves
- Exploration strategy in a ‘lower for longer’ world
- 2017 Exploration look-ahead
The analysis allows insight into success rates across geographies, different basin types and between exploration plays.
The report will provide users with expert intelligence on international conventional oil and gas exploration for company strategy, business development and performance benchmarking.
Westwood is also offering a presentation of the report findings, via webinar, to purchasers at no extra charge.
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