Business Outlook 2018


Development Drilling The low rate of development drilling is now a primary concern for the UKCS with just 71 wells spudded last year. This represents a fall of around 45 per cent over the last two years. Historically there has been a strong relationship between production volumes and the number of development wells drilled, leading to concern that the fall in development drilling will begin to impact production delivery. In the current cash-constrained environment, E&P companies will focus on opportunities that provide the greatest return on investment, leading to only the most profitable wells being drilled. There is a major risk that economic reserves remain in the ground as capital is prioritised elsewhere. This demonstrates the importance of ensuring that assets are owned by companies who consider them core to their business and are best placed to maximise economic recovery. The recent wave of M&A and asset transfer activity offers cause to be optimistic, with companies such as Chrysaor 13 and EnQuest 14 looking to invest in the assets they have acquired from Shell and BP, respectively. It is also likely that the development wells drilled in recent years have benefitted from increased efficiencies and the deployment of new technology, helping to improve well placement and total production. Companies may also be prioritising methods of maximising return from their existing well stock over drilling new wells. This could include well interventions and workovers that will not translate directly into well spuds but will be reflected in reduced well losses and improved output from existing assets.

Figure 29: Development Drilling


Development Wells Potential Upside on Forecast




Number of Development Wells (including geological sidetracks)



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

Source: Oil & Gas UK, OGA

13 See 14 See


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