FAVERSHAM, UK – Conventional exploration results are on the rise, with commercial success rates so far this year above 50% and much lower finding costs than for the same period in 2016, claims analyst Westwood Global Energy Research.
Although drilling during the first half of this year was down 20% compared to the same period in 2016, discovered volumes were nearly twice as high while overall finding costs halved to <$0.3/boe for Westwood’s ‘W40’ exploration benchmark companies.
And commercial volumes discovered this year already exceed the total proven in 2016.
Notable oil exploration successes so far includePayara and Snoek in the offshore Suriname-Guyana basin, while gas standouts include Yakaar offshore Senegal; Qattameya Shallow offshore Egypt; and Macadamia offshore Trinidad.
This adds up to commercial success rates of 53% compared with 30% in 1H 2016, reflecting the high-grading of drilling portfolios, and fewer higher risk frontier wells (down to five in 1H 2017).
Drilling and expenditure for the year as a whole will likely finish slightly down on 2016 overall, said Westwood’s Andrew Hughes, although there is uncertainty over some plans.
Infrastructure-led exploration drilling in established plays accounted for 75% of the total exploration drilling budget during the first half of this year while spending on high impact exploration remained steady.
However, none of the five frontier completed delivered commercial discoveries with just one technical gas discovery atGorgon-1, offshore Colombia.
Currently four frontier wells are drilling with an additional 10-15 frontier wells expected to spud by year-end.
Hughes concluded that while green shoots for exploration drilling are emerging, overall activity remains subdued.