Partridge and Verbier fail to find oil
Key wells fail
Azinor Catalyst’s Partridge and Statoil’s Verbier wells were each targeting over 100mmbbls in well drilled areas of the North Sea and were rare examples of exploration in the region with independent involvement. Jersey Oil and Gas (JOG) held 18%WI in Verbier, having successfully attracted Statoil to farm-in to its original 60% WI in 2016, while Azinor held a 100% WI in Partridge (subject to back in options with third parties).
Read more...Drombeg adds to Druid disappointment
The Druid/Drombeg frontier exploration well, 53/6-1, is currently being plugged and abandoned after encountering porous water bearing reservoir across both target intervals. Operator Providence Resources announced the results from the deeper Drombeg target this week, following on from similarly disappointing results from Druid in August.
Read more...Factors in US shale balances - Declines vs DUCs
Negatives of declines in Permian vs increases in DUCs
There have been a number of developments in recent months in US shale.
We examine two key factors to see their effect on market data and sentiment - the levels of inventories and the quantity of drilled, uncompleted wells (DUCs).
Increasing decline rates in the Permian could have significant long-term effects on US shale production expectations, while increasing numbers of DUCs in Permian should give bulls pause for thought on meaningful, near-term increases in oil prices.
Korpfjell disappoints in the Barents
One of the most anticipated exploration wells of 2017, Korpfjell, has proven a small non-commercial gas volume in the frontier southeast region of the Barents Sea. The Statoil operated well had been targeting oil in a large structure that was estimated by partner Lundin to be over four times the size of that seen in the giant 1.9 - 3bnbbl Johan Sverdrup field.
Read more...Made a discovery? What are the odds of another?
Opening sequences
For exploration, and particularly for frontier exploration, it is useful to know how likely exploration may open up further discoveries in the block. We try to quantify how exploration discoveries may lead to further success - and how these results should affect company valuation
Read more...Supply/demand rebalancing some time away
US shales can produce enough to supply demand increases
The oil sector is firmly in a new cycle, with a dramatically lower cost profile across the industry. Inventories in the US remain at elevated levels (only just below last year’s record levels). Although demand growth is steady, the production growth from the US shales alone is seen to be enough to provide for this growth from (Q217-Q218), with OPEC playing a role as the swing producer to cover seasonal variation. The market agrees, and the forward curve has progressively lowered and flattened over the last 18 months. We lower our long-term oil price assumption to $70/bbl in 2022 (equivalent to c $60/bbl real in 2016).
The note is here
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