Fewer wells, higher volumes

July 24, 2017
Commercial discoveries in this year's first half are already greater than the total for 2016, according to a report from Westwood Global Energy Group.

Tayvis Dunnahoe
Exploration Editor

Commercial discoveries in this year's first half are already greater than the total for 2016, according to a report from Westwood Global Energy Group. Drilling was down 20% in the first half compared with the same period in 2016, however, Westwood said 2017 discovered volumes are nearly twice that in the same period in 2016. Success rates jumped to 53% in the first half from 30% for the same period in 2016. Finding costs have been reduced by half to less than 30¢/boe among the analyst's benchmark companies.

Notable discoveries

In January, Esso Exploration & Production Guyana Ltd. (EEPGL) encountered more than 95 ft of oil-bearing sandstone in its Payara-1 well, which was drilled about 10 miles northwest of the Liza-1 discovery (OGJ Online, Jan. 12, 2017). This made ExxonMobil Corp.'s second oil discovery on the Stabroek block. The well was drilled in a new reservoir that was similar in age to that of the original Liza discovery.

In March, EEPGL encountered 82 ft of high-quality, oil-bearing sandstone reservoirs while drilling the Snoek well on the Stabroek block offshore Guyana. The well reached 16,978 ft in 5,128 ft of water and targeted similar aged reservoirs as encountered in previous discoveries at Liza and Payara. Snoek is in the southern portion of the 6.6 million-acre block, 5 miles southeast of the 2015 Liza-1 discovery (OGJ Online, Mar. 30, 2017).

PJSC Lukoil and partner Inpex Corp. made an oil discovery with its Eridu 1 well on Block 10 in sourthern Iraq in February. The well tested more than 8,000 b/d from the Mishrif horizon (OGJ Online, Feb. 22, 2017). Block 10 is 150 km west of Basra, covering 5,600 sq km. The operator plans to drill and test and Eridu 2 later in 2017.

Repsol SA and Armstrong Energy LLC extended the Nanushuk play more than 20 miles south in Alaska North Slope's Pikka Unit in the Colville basin. The Horseshoe 1 well encountered 150 ft of net oil pay in multiple zones within the Nanushuk section (OGJ Online, Mar. 10, 2017). The well was drilled 6,000 ft and the Horseshoe 1A sidetrack reached an additional TD of 8,215 ft, encountering more than 100 ft of additional net oil pay. The Nanushuk play could contain as much as 1.2 billion bbl of recoverable light oil, Repsol says.

A group led by Oil Search Ltd. in the Papua New Guinea highlands reported the successful production test of the Muruk-1ST3 appraisal well, which was drilled southwest of the Muruk-1 natural gas discovery. (OGJ Online, June 14, 2017). Oil Search reported that the well flowed gas at a maximum equipment-constrained rate of 16 MMcfd through a ½-in. choke. The test assessed reservoir productivity and to ensure a wide array of samples from the Toro sandstone reservoir from 3,968-4,065 m, which is consistent throughout the central Papua New Guinea fold belt. Muruk field is 21 km northwest of the Hides processing facilities and immediately north of Juha gas field, all of which derisks the gas prospectivity along the Hides-P'nyang geological trend. The operator has scheduled follow-up site preparations for late this year ahead of a potential appraisal program in 2018.


Westwood predicts that drilling and other investments will decrease in 2017 compared with 2016. The analyst firm also reported that exploration budgets have applied 75% of their 2017 total to infrastructure-led drilling in established plays. Only five frontier wells were completed in this year's first half, with Gorgon-1 offshore Colombia being the only commercial gas discovery. Westwood reported that 10-15 frontier wells will commence by yearend.

Lower well counts are leading to more success with lower finding costs, even though overall exploration activity remains subdued.