A year on since the oil price collapse and the effects are making themselves felt across Northwest Europe, particularly in the UK and Norwegian sectors.
The count of exploration and appraisal well spuds in the UK is an all-time low, a level not seen since offshore drilling commenced in 1964, whilst in Norway a glut of dry holes and technical-only, rather than commercial, successes have plagued otherwise buoyant activity levels.
However, whilst the UK saw just 13 exploration spuds last year, matching that of 2014, commercial success rates have been the highest for over a decade, and in 2015, the UK delivered the same volume of new resources through the drill-bit as Norway, despite far fewer wells, with 16.5 MMboe per well comparing favorably to just 6 MMboe per well east of the median line.
Meanwhile, continued caution in the mergers and acquisition market has resulted in only a handful of transactions in the UK, whilst it is business as usual in Norway with over 40 deals conducted, Hannon Westwood reports.
Positive results from the UK, in particular with regard to high commercial success rates and production levels, and Norway, where activity levels have remained high despite the current environment, are supplemented with encouraging signs elsewhere in Northwest Europe.
The largest gas discovery in the Netherlands for some time was reported last year, albeit at 150 Bcf, along with substantial interests in the latest offshore Ireland licensing Round provide optimism for the industry.
Looking forwards, a number of potentially high impact exploration and appraisal wells in the UK are expected in 2016, whilst the deals market in Norway is anticipated to remain stable despite a forecast drop in exploration and appraisal drilling.
So whilst investment is flagging, and companies are becoming ever more averse to unnecessary or risky expenditure, there remains quite a lot to be positive about in the coming 12 months.