Global high-impact exploration in 2017 is expected to match 2016 in both activity and success rates, and with a marked improvement in commercial oil volumes discovered and lower finding costs, Westwood, an energy intelligence group, said in a report on Monday. In 2018, Westwood expects 70 high-impact wells will be drilled.
Westwood defines high-impact conventional exploration wells as either frontier wells targeting new plays and/or wells targeting prospects with pre-drill volumes of >100 mmbls or >1tcf.
High impact drilling commercial success rates have remained constant around the 1 in 4 level for the past 5 years, but in 2017 resources discovered per high impact well drilled increased to 104 mmboe from 71 in 2016. Coupled with a dramatic fall in the average well cost to $48 million per well, finding costs dropped to below $0.50 per barrel, the lowest since 2011, Westwood said.
Much of the discovered volumes in 2017 have come from just a handful of high-impact wells. Some of the largest include: Kosmos’ giant Yakaar gas discovery in the MSGBC Basin offshore Senegal; a trio of oil discoveries in the offshore Guyana for Exxon at Payara , Snoek and Turbot; and Talos Energy’s Zama-1 discovery in the Salina Basin offshore Mexico.
Other notable discoveries include Armstrong’s Horseshoe oil discovery in Alaska, Oil Search’s Muruk gas discovery onshore PNG and Rosneft’s frontier Arctic oil discovery in the Laptev Sea , Westwood said.
70 high-exploration wells in 2018
Looking forward to 2018, Westwood has recorded over 70 high impact exploration wells expected to be drilled, and has recently released a research note highlighting twenty of the key ‘wells to watch’.
High impact drilling in 2018 is expected cover more than 40 separate basins, with around 35% of the wells targeting frontier plays. Hot spots for gas are expected to be the MSGBC and Nile Delta, and for oil the Colville and Suriname-Guyana basins. The combined unrisked pre-drill resource potential is estimated to be almost 30 bn boe and is heavily weighted to gas (11.7bn bbl liquid and 107 tcf gas).
Just a few major discoveries from this pool of wells could bolster global discovered commercial volumes in 2018, and many have the potential to open-up new plays with substantial follow up potential for the future, Westwood said.