UK North Sea market defiant to downturn

Drilling activity in the UK North Sea is on track to remain steady in 2015, compared to the two previous years, though it is down historically. The value of acquisitions and divestitures is also set to be strong, signaling the upstream market’s resilience to the industry-wide downturn precipitated by low oil prices.

The area has seen a total of 16 wells spudded so far this year, comprising 11 wildcats and five appraisals. Another 10-15 are expected by the end of December, according to oil and gas research firm 1Derrick, bringing the annual total to 26-31. This number would be in line with the 26 drilled in 2014, and 32 in 2013, but is still a fall from the 41 drilled in 2012 and historical high of 78 in 2008.

The end of the first half of 2015 also saw the value of acquisitions and divestitures exceed $1 billion. There have been a total of 20 transactions so far, including eight farm-ins, 11 development projects and one corporate merger. This already puts 2015 up from 2014, which saw only $788 million in such deals, though remains significantly below the $4.4 billion recorded for 2013 and $7.6 billion for 2012.

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