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oil price slumped. Over the first half of this year, seven
exploration wells were drilled (with no sidetracks),
plus three appraisal wells (with six sidetracks) and
38 development wells (with 27 sidetracks). It is
anticipated that around 20 E&A wells will be drilled
in total this year, but with rig rates and the costs of
acquiring seismic at their most competitive for years
there will be opportunities for those companies
that have the capacity to invest in exploration in a
counter-cyclical manner.
There has also been a sharp decline in the volumes
discovered (see Figure 35 opposite). This is a
consequence of fewer wells being drilled and of
companies becoming more risk averse, targeting
smaller, less risky accumulations. Over the last three
years, there have typically been four discoveries
a year, with total recoverable reserves averaging
annually around 55 million boe. As at mid-year 2015,
one successful well with recoverable reserves of
around 20 million boe had been reported, although
the results from three of the seven wells drilled
to date are yet to be reported. Further wells are
planned in the second half of the year, which may lift
the outcome.
7.4 Stimulating Exploration
The industry, regulator and government all accept
that the current pace of exploration is insufficient.
Key priorities are to encourage exploration and prove
the basin’s resource potential.
As mentioned earlier, DECC has published central
case figures that suggest YTF potential of between
2-9 billion boe, depending on the perceived geological
risk associated with the resources being targeted.
At current drilling rates, it is anticipated that only a
small fraction of these YTF resources will be discovered
before the decommissioning of UKCS infrastructure
curbs further exploration activity.
0
10
20
30
40
50
60
70
80
90
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exploration Sidetracks
Exploration
Appraisal Sidetracks
Appraisal
Number of Wells Drilled
Source: DECC, Oil & Gas UK
Figure 34: Exploration and Appraisal Drilling