Activity Survey 2015

ACTIVITY SURVEY 2015

2.4 Drilling Activity

• Exploration activity was significantly worse than expected in 2014, with only 14 of the expected 25 wells actually drilled (including sidetracks). This compares with 15 wells in 2013 and reflects a downward trend since 2009. • Inability to access capital was cited as the main reason for low exploration activity, which led to the discovery of just 50 million boe that has the potential to be commercially developed. • As few as 8 to 13 exploration wells are forecast to be drilled in 2015 as the lower oil price adds to existing barriers. • 18 appraisal wells were drilled (including sidetracks), 7 more than were forecast but a significant fall from the 29 wells drilled in 2013. • No more than 5 appraisal wells are forecast for 2015, a fall that is driven by poor exploration results over the last 4 years. • 126 development wells (including sidetracks) were drilled in 2014, compared with 120 wells in 2013. • Production averaged 1.42 million boepd in 2014, 1.1 per cent less than in 2013, representing the best year-on-year performance in 15 years. • Liquids production declined by 2.6 per cent, but was offset to some extent by a 1.1 per cent increase in gas production. • Following production falls of 19 per cent, 14 per cent, and 8 per cent in each of the last 3 years, respectively, the improvement in performance in 2014 has been driven by an increased focus on production efficiency, the impact of new start-ups and no major unplanned shutdowns during the year. • Despite steady production, revenues fell to just over £24 billion for the year, the lowest since 1998. • Looking ahead, up to 15 new fields could begin production in 2015, many of which are expected in the first half of the year. If there is no major project slippage, production could increase to around 1.43 million boepd this year. • The impact of new start-ups is so great that, by 2019, more than half of UKCS production is likely to come from fields that started production since the end of 2012.

2.5 Production

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