UK exploration, appraisal drilling reaches new high

Offshore staff

TWICKENHAM, UK -- Hannon Westwood reports that in 2008, exploration and appraisal drilling in the UK offshore sector reached its highest level since 1997.

Of the 77 wells spud, 41 were exploration and 36 were appraisals of previous discoveries. There were 18 exploration and 19 appraisal successes in 2008, together finding or progressing some 841 MMboe of additional UK reserves against 1.08 billion produced in the year.

The Northern North Sea, West of Shetland, and southern North Sea all recorded exploration drilling success, while there was no drilling in 2008 in the East Irish Sea, English Channel, or SW Approaches. A multi-well, multi-operator drilling program is scheduled for this year in the East Irish Sea.

Appraisal activity in 2008 continued apace with the central and southern North Sea areas accounting for the majority of the appraisal activity. With less volatility in the gas price, there was a steady and concerted appraisal program in the southern North Sea, with seven successes. The standout of these was the continued appraisal of Breagh by Sterling Resources, with the East and West extensions confirmed by two wells in block 42/13, the company says.

The 77 wells were operated by 43 companies on behalf of 89 joint venture participants. Oilexco and Ithaca Energy operated the most wells, with five each. Twenty four companies each operated a single well, many of which were their first wells in the UKCS.

Hannon Westwood estimates that the 18 successful exploration wells found approximately 488 MMboe, an average finding rate of 27.1 MMboe per well, while 353 MMboe were progressed by 20 successful appraisal wells, an average rate of 17.7 MMboe per well.

"This [economic downturn] is now being seen in the early part of 2009 as companies rein in unnecessary expenditure and discretionary drilling plans are put on hold," says Chris Bulley, Hannon Westwood partner. "By the end of 1Q 2009 there were seven new well spuds and 10 sidetracks compared with 20 and eight, respectively, for the same period of 2008."

05/20/2009