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7 Pages

Exploration without development - the high returns strategy


Exploration without development - the high returns strategy

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,...

What's included?

This report includes 1 file(s)

  • Exploration without development - the high returns strategy PDF - 512.88 KB 7 Pages, 2 Tables, 4 Figures

Description

This Oil and Gas Exploration Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For participants, suppliers and advisors who want to look at the trends, risks and issues of this topic, this report gives you an expert point of view to help inform your decision making.

Wood Mackenzie provides accurate and in-depth analysis to help you navigate the ever-changing challenges of oil and gas exploration so you can make key commercial decisions.

  • 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?

In this report there are 6 tables or charts, including:

  • Executive summary
  • Undeveloped discoveries can be attractive assets with prices to match
    • Implied long-term oil price (ILTOP) of transactions by asset development stage
  • A few explorers have already enhanced their returns through disposals
    • Impact of disposal of recent discoveries on conventional exploration returns
  • Many more could yet transform exploration returns by selling discoveries
    • Hypothetical impact of future disposals of recent discoveries on conventional exploration returns
  • Show us the money - investors need explorers to prove value creation
    • Contrasting investor and industry perception of value through the exploration life cycle
  • But governments' attitudes to explorers selling discoveries can be mixed
  • Should I stay or should I go?
    • Generic develop or divest factors for explorers to consider
    • Evolution of asset value and risk through exploration life cycle
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