Last year’s oil price dip and COVID-19 pandemic led to a 56% decrease in E&P farm-out deals compared to 2019. The 29 exploration transactions completed represented the lowest of the past decade. Deepwater deals were down by 70%, with shallow water more resilient, only 24% lower, mainly due to agreements covering maturing and mature plays in northwest Europe. Shell and Qatar Petroleum each completed three farm-ins, while Total and Equinor traded out equity in six and four deals, respectively.
The commercial success rate from farm-out drilling in 2020 was 38%, a five-year high. Ten of the successes arose from the 26 wells that were drilled after equity transfers. The largest farm-out discovery was Maka Central-1 in block 58 offshore Suriname, where Total took a 50% stake from Apache. Offshore the UK and Norway, the commercial success rate from farm-out wells in 2020 was 66%, compared with 46% for all wells drilled in those two countries.
– Vikesh Mistry, senior analyst, Westwood Energy
