Oil and gas sector sees improved exploration performance

Westwood Global Energy Group revealed its 9th annual State of Exploration Report, which focuses on conventional oil & gas exploration. The report analyses global conventional exploration performance over the past five years, as well as exploration drilling plans for 2018.

Dr. Keith Myers, President of Research at Westwood Global Energy Group, said:

With higher oil prices, improving exploration performance, and the cost of exploration falling more than 50% since 2013/14 plus fewer companies competing for acreage it could be argued that there has not been a better time to be exploring in the last decade. But there are challenges too with frontier success rates remaining stubbornly low and new oil plays continuing to be elusive. The focus continues to be on deep and ultra-deep water for high impact discoveries.

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Key points from the report include:

Exploration drilling activity in 2017 was little changed compared to 2016 but performance was strong with discovered volumes more than double that of 2016, overall commercial success rates rising to a record high of 47% and record low finding costs of <$0.5/boe.
Success rates were driven by near-field drilling in lower risk mature plays onshore Colombia and Australia while volumes were influenced by a few large discoveries, primarily in emerging deep water plays such as Guyana and Senegal.
Success in frontier exploration has been elusive and effective high grading of frontier opportunities has not been evident in drilling results. There was no significant frontier discovery in the 39 attempts since Zohr in mid-2015, with Guyana emerging as the biggest new oil province since the Brazil pre-salt.
For 2018, exploration drilling is expected to increase by 12% and budgets by 7%, with around 60 high impact wells planned globally for the remainder of 2018, focused in the Atlantic margins, Gulf of Mexico and the Caribbean.
The risk profile of the wells being drilled in 2018 has increased and the improved performance seen in 2017 may not be sustained in 2018.

The report analysis includes key discoveries of 2017, and the key plays explored and all frontier drilling. The report also includes a 10-year lookback at global high impact exploration.