Business Outlook 2018

Despite the challenges, 2018 could be a good year for exploration drilling in the UK. Although well spuds are forecast to drop further, there is a healthy mix of wildcat and infrastructure-led opportunities being considered. The Lyon prospect, which Siccar Point partially farmed-out to Ineos late last year, could be material with a preliminary estimate that it could contain one-to-three trillion cubic feet of recoverable gas with potential follow-up opportunities nearby. Appraisal Drilling Appraisal activity remains suppressed with only nine wells drilled in 2017. This largely reflects the relatively poor exploration success prior to 2016 resulting in fewer opportunities to appraise. The recent focus on near-field, infrastructure-led exploration is also likely to have had an impact on appraisal drilling, with these successful discoveries often progressing to development quickly with little or no appraisal work required.

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Although it is likely that appraisal drilling will remain suppressed in 2018, there is appetite to appraise some exploration successes, which should result in at least seven appraisal wells this year.

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Figure 28: Appraisal Drilling

90

5

Appraisal Wells

80

Potential Upside on Forecast

70

6

60

50

7

40

30

8

20 Number of Appraisal Wells (including geological sidetracks)

10

9

0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Oil & Gas UK, OGA

10

11

39

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