UK drillers shift focus to appraisal

Exploratory drilling across the UK shelf last year approached a level not seen since the late 1990s, according to analysts Hannon Westwood.

Offshore staff

ABERDEEN --Exploratory drilling across the UK shelf last year approached a level not seen since the late 1990s, according to analysts Hannon Westwood.

The 77 spuds comprised 44 exploration and 33 exploration wells, only three below the 1997 total of 80. Additionally, eight exploratory and 28 appraisal sidetracks got under way.

The high proportion of appraisal wells – 43% of the total – suggests a continuing shift towards commercializing existing finds, the analysts add.

By end-March 2009, ten mobile drilling rigs and one platform rig were active, again predominantly in appraisal work. The long-running programs of certain wells are keeping the rig fleet active for the time being.

Hannon Westwood's database identifies around 200 forthcoming UKCS wells, mainly exploration, with evidence of rig and vessel day rates falling. Nevertheless, the sector continues to deliver potentially commercial finds, the analysts claim, and the process of shifting from exploration to appraisal and development appears to be more efficient.

Consolidation in the sector could threaten future drilling activity, they caution, but it could also lead to some wells being reinstated in cases where larger companies acquire previously under-funded portfolios.

05/13/2009

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