The number of oil and gas wells being drilled in the UK North Sea nearly halved to just 41 between 2008 and 2009 but the success rate of those wells was more than double the long term UK average.
According to Hannon Westwood, an oil & gas industry consultancy, 28 of the 41 wells drilled in 2009 were successful in appraising or finding additional technical reserves – a 68% success rate compared with 47% in 2008. In total, 1,224 million barrels of oil equivalent (mmboe) were either appraised or discovered in 2009, which compares with UK production during the period of 836 mmboe – representing a technical replacement rate of 146%.
Chris Bulley, executive director at Hannon Westwood, said: “In response to the economic downturn, drilling activity dipped significantly in 2009 compared to 2008. However, the increased success rate is testament to the improving expertise and technology being applied in the UK exploration & production industry to locate reserves on the UK Continental Shelf, and we see this high quality technical success continuing.”
Mr Bulley added that with approximately 240 known forecast wells currently in various stages of planning for the period 2009 to 2015, there is still a substantial exploration resource to be tapped in the North Sea.
Yesterday, AIM company Deo Petroleum (LON:DEO) launched plans to raise £0.6m to fund its investing strategy of doing deals over North Sea oil and gas assets. Deo changed its approach last December in order to take advantage opportunities to back “stranded assets” that are often overlooked by larger energy companies. In April, shares in Dana Petroleum Plc (LON:DNX) soared on the back of news that the company had made a significant gas discovery at the Platypus prospect in the UK Southern North Sea. Early analysis indicated that the reserves discovered are in line with pre-drill estimates of approximately 130 billion cubic feet of gas.
Chris Bulley, executive director at Hannon Westwood, said: “In response to the economic downturn, drilling activity dipped significantly in 2009 compared to 2008. However, the increased success rate is testament to the improving expertise and technology being applied in the UK exploration & production industry to locate reserves on the UK Continental Shelf, and we see this high quality
...or is it due to the fact that, during the downturn, fewer high-risk prospects were being drilled and precious cash was focussed more on lower risk appraisal activites? ;0)
