The industry is planning to drill out 3.7 billion boe of prospective resources in 16 high impact wells in 2018 in the UK and Norway. Westwood has reviewed the drilling programme for wells targeting resources >100 mmbbl of oil or 1 tcf of gas, to assess the potential for a game changing discovery in 2018.
Three high impact wells have been drilled to date this year, with one successful well, 6506/11-10, delivering c. 140 mmboe from two separate discoveries in both the primary and secondary targets. A further 13 HI wells are planned this year targeting a remaining unrisked prospective volume of c. 3.3 billion boe.
The majority of the wells are in the frontier and emerging plays of the Barents Sea, but there has also been a slight increase in the testing of high impact prospects within the mature plays of the North Sea and Norwegian Sea.
Play maturities of the 2018 HI wells split by basin
Source: Westwood Atlas & Wildcat
The question is how successful the high impact drilling campaign will be. The recent industry track record is not encouraging.
In the last five years, 121 discoveries have been made in the UK and Norway, of which 41 are currently considered potentially commercial. Only four (3%) of the 121 discoveries were >100 mmboe and all four targeted play opening frontier prospects. Two of the discoveries, Lincoln and Halifax, are within the West of Shetland fractured basement play and are classified as non-commercial pending successful production tests. The other two discoveries, Wisting Central and Alta targeted frontier plays in the Barents Sea, and are considered potentially commercial following appraisal, but are as yet unsanctioned.
In terms of the 68 high impact prospects tested in the last five years, only 8 wells made commercial discoveries (Figure 2); a commercial success rate of 12% for c. 750 mmboe of total resources. Only two (3%) of the HI prospects tested, however, delivered commercial HI discoveries.
Commercial discoveries made from HI wells in the last five years
Source: Westwood Atlas & Wildcat
In 2017, there were 17 high impact wells drilled, testing 3.6 billion boe of unrisked pre-drill resources which found only c.100 mmboe of commercial resources – a 3% success rate by volume. In the UK, seven HI wells were drilled of which two made commercial discoveries, but considerably smaller than 100 mmboe. Of the 10 HI wells drilled in Norway in 2017, principally in the Barents Sea, none made HI commercial discoveries.
The industry has a well documented tendency to over-estimate the commercial chance of success and prospective volume especially in high risk plays. The industry will be hoping that it is more accurate with its pre-drill volume and risk analysis this year and geology can sometimes throw up some nice surprises as in the 2 billion barrel Johan Sverdrup 2010 discovery.
Roderick Bevens, Analyst, Northwest Europe Research
[email protected] or +44 (0)20 3794 5377
