Well numbers and discovered volumes fell to a nine-year low in 2016, but success rates increased by 35% and further growth is expected this year, a new report said.
While companies’ plans are still “fluid”, there is potential for a 10% increase on the 2016 global drilling count, according to the annual state of exploration report by Westwood Global Energy Group (WGEG).
Drillers will have to make up for a slow start to the year, however. The number of wells drilled in the first quarter of 2017 was down 35% on the same period in 2016.
Despite fewer wells being drilled, a high average commercial success rate of 60% was achieved.
Sixty-two high impact wells are planned globally for 2017, targeting 19.5billion barrels of oil equivalent (boe) unrisked, 37% of which is oil.
Twenty four of those wells target frontier plays, 11 of which are in the Atlantic margins and the Norwegian Barents Sea.
The report showed industry is still struggling to shorten the timeframe between discovery and production.
Of the gross 17.4billion boe discovered by the 40 companies tracked by WGEG since the start of 2013, 88% is still at an appraisal stage, reflecting a marked slowdown in progression to production due to the oil price fall.
Keith Myers, president of Westwood Research, said: “If the industry is out of the emergency room in 2017, it is not yet out of hospital. Even if oil prices recover further, explorers will need to focus on finding low cost oil and gas profitable to develop at $40 per barrel or less.
“Companies will need to believe they have the acreage portfolio, technology, people and processes to deliver exceptional performance. This means an efficient exploration process with larger prospect portfolios and fewer, better wells targeting bigger prospects at higher commercial success rates.”
“The industry is emerging leaner and fitter from this latest down-cycle, but it must be able to remain disciplined during the bull oil market to come. Decreased competition means lower access costs for exploration acreage and more opportunity to create value from exploration for the accomplished explorer.”