Global Exploration and Appraisal Reports

This is the twelfth edition of the State of Exploration report and it is published at a time which may come to be seen as a watershed moment in the global energy industry. The drop in oil demand and crash in the oil price associated with the Covid-19 pandemic combined with the reality of the approaching energy transition has made many oil and gas companies rethink the strategy of their entire business. Exploration is a part of that. 2016-2020, which is covered in this report, was looking like the period when the crash of 2014 was behind us and exploration activity levels were beginning to rebound. Then things changed. 2020 closed surprisingly well, considering, with the level of exploration activity and associated performance looking far better than was imagined in the middle of the year. 2021 is expected to see relatively high levels of activity, as wells deferred from 2020 for operational and budgetary reasons are drilled.

During the first half of 2021, 30 high impact wells were completed delivering seven potentially commercial discoveries at a 23% commercial success rate.  High impact drilling activity should increase in the second half of the year, with 70-80 high impact wells anticipated to complete by the end of the year. The industry is still drilling through some high-potential and interesting prospectivity, and 15 ‘key wells to watch’ are reviewed from the remaining 2021 program.

The energy transition away from fossil fuels to combat climate change is forcing the oil and gas industry to rethink strategy and reflect on the role of exploration. This briefing note looks at the shape of conventional oil and gas exploration in 2026 and the factors that will influence it.

Appraisal activity on high impact discoveries fell 51% from 45 appraisal wells completed in 2019 to only 22 wells in 2020. This report reviews the global high impact appraisal drilling programme in 2020 to understand which discoveries were appraised, the appraisal objectives and what the impact was on resource progression.

The industry has placed big exploration bets on the Brazil pre-salt. Since 2017, 14 companies have spent ~$7.2bn in signature bonuses to access 34 licences in the area outboard of the proven pre-salt fairway. 15 wells have been committed targeting 13bnboe of prospective resources. Two unsuccessful wells have been completed in the outboard area and are early warning signs to the play risks. How many wells will it take to prove the play extends outboard? It should be a lot fewer than the 15 committed.

In November 2020, Oil Search announced a significant resource upgrade to their discoveries in the Nanushuk play of the Colville Basin in Alaska and their intention to progress to FID in 2021. This report reviews the exploration history and performance of the play, which is the second fastest growing conventional oil play after the Liza play in Guyana. It provides a detailed analysis of geological play risk and competitive landscape for both the proven play fairway and the remaining running room.

This note, recently published on the Westwood Atlas service, builds on an August 2020 Wildcat Exploration Monthly report article asking why the industry appears to be ignoring evidence from EM when highgrading exploration prospects. Four wells drilled in Norway, during 2020, which targeted prospects with no associated EM anomalies were dry. This report reviews the exploration performance of wells drilled on prospects with EM data in NW Europe between 2011 and 2019. The presence of an EM anomaly increases the chance of a commercial success, whilst no commercial discoveries were made on prospects where an EM anomaly was absent.

This report reviews high impact discoveries made between 2008-2016 that are stalled in their progression to development to understand the reasons for delay and what it would take to unlock them.

The industry is drilling out 15 billion barrels of prospective resource offshore Mexico, in a key campaign for an industry still hungry for high impact oil discoveries. This report analyses the commitments international oil companies have made, the performance and spending to-date and the exploration wells and financial commitments remaining.

International companies have completed 15 wells in Mexico with six commercial discoveries including the two discoveries announced this week. 3.5bnboe of prospective resource has been drilled out so far discovering an estimated 1.2bnboe of commercial resources. Mexico is yet to be the bonanza the industry was hoping for but it is still early days. Over 10bnboe is still to be tested, in 38 identified wells through to end 2023.This report reviews the results to-date, the wells still to be drilled and some of challenges the geology offshore Mexico presents.

In 2019, 30% of exploration wells targeting clastic reservoirs tested stratigraphic traps, the highest proportion in the past 12 years. This report analyses the exploration performance of clastic stratigraphic traps to investigate if the industry is getting better at stratigraphic trap exploration and, if so, what the key success factors might be.

This briefing note compares the performance of exploration wells targeting different categories of publicly reported pre-drill direct hydrocarbon indicators (DHIs) over the last 12 years. The study finds that DHIs have contributed towards higher than benchmark technical and commercial success rates in frontier plays whilst their effectiveness in mature and maturing play exploration has been poor with below average commercial success rates.