Oil Exploration, Appraisal Outlook Appears Promising after ‘Savage Year’

Analysts forecast about 65 to 80 high-impact oil and gas exploration and appraisal wells will be drilled this year after a plunge in activity in 2020.

The Lang Lebah field offshore Malaysia is shown in 3D compared to the Petronas Twin Towers. (Source: Petronas)

The Lang Lebah field offshore Malaysia is shown in 3D compared to the Petronas Twin Towers. (Source: Petronas)

Following a 64% plunge in drilling spend with less than two dozen wells drilled in 2020, analysts expect operators to ramp up high-impact appraisal activity this year with a continued focus on oil.

The outlook—centered on resources of at least 100 million barrels of oil, 1 Tcf of natural gas and play-opening frontier discoveries—was delivered as the oil and gas industry continued to claw its way from the pandemic-driven drop in oil demand that slowed exploration and appraisal activity and further squeezed spending.

“We expect there to be an increase in activity to 32 wells with 26 of these clusters firm and a further six is probable,” Joe Killen, an exploration and appraisal analyst for Westwood Global Energy Group, said on a recent webinar. “We see a continuation of trends that we saw with appraisal of oil over gas, with a focus on producing basins.”

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Velda Addison

Velda Addison is the senior editor of digital media for Hart Energy’s editorial team. She covers energy with a focus on renewables.