Exploration without development - the high returns strategy

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Report summary

Exploration returns are higher than full-cycle returns.  Explorers can choose to sell their discoveries rather than continue through to development and production.  The disposal option is often value-neutral but achieves faster payback.  Higher returns reward the greater risk in wildcatting. Development costs exceed exploration costs six-fold.  Early monetisation offers talented but capital-constrained explorers a route to accelerate reinvestment in their core strengths.  By staying small,...

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    Exploration without development - the high returns strategy

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Table of contents

  • Executive summary
  • Undeveloped discoveries can be attractive assets with prices to match
  • A few explorers have already enhanced their returns through disposals
  • Many more could yet transform exploration returns by selling discoveries
  • Show us the money - investors need explorers to prove value creation
  • But governments' attitudes to explorers selling discoveries can be mixed
  • Should I stay or should I go?

Tables and charts

This report includes 6 images and tables including:


  • Impact of disposal of recent discoveries on conventional exploration returns
  • Hypothetical impact of future disposals of recent discoveries on conventional exploration returns
  • Contrasting investor and industry perception of value through the exploration life cycle
  • Evolution of asset value and risk through exploration life cycle


  • Implied long-term oil price (ILTOP) of transactions by asset development stage
  • Generic develop or divest factors for explorers to consider

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