--> The Smaller Independent Oil Company Exploring Overseas: A New Frontier or a Money Trap?, by A. G. Hatley; #90986 (1994).

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Abstract: The Smaller Independent Oil Company Exploring Overseas: A New Frontier or a Money Trap?

Allen G. Hatley

As smaller independent oil exploration companies and individual investors in North America and western Europe search for prospects with larger reserve targets, or when they desire to look at the reactivation of older oil or gas fields, they are naturally drawn to examine the possibility of exploring overseas. While stories of twelve million dollar wildcat wells, deals where you may get less than 25% of the oil produced, and living with the greater risks of terrorism, will keep many small independents exploring only in the Denver basin, Oklahoma, or Alberta, Canada, smaller oil companies successfully exploring in many of the remote regions of the world is nothing new or unusual.

For the last 30 years a number of small independent oil companies have either led the search for hydrocarbons or competed effectively with major oil companies for large and significant discoveries in a number of countries including Indonesia, Peru, Yemen, Tunisia, France, the Philippines, and Colombia. In the future host nations such as China, and the former Soviet Union may be added to that list.

This talk will specifically look at how a smaller exploration company can build an International data base, and target a country or region for action; It will discuss which countries are "small company friendly." It will look at how and when to conduct direct negotiations with host governments or participate in competitive tenders, and what to look for when reviewing an overseas farm-in. The talk will also examine the fact that joining in an international project is not necessarily for everyone, regardless of the opportunities.

During the course of the talk, a number of "life examples" or "case histories" regarding international exploration experiences by smaller exploration companies are discussed and analyzed, in order to (hopefully) assist the aspiring international explorer in correctly answering the question "How much oil have you found today?"

AAPG Search and Discovery Article #90986©1994 AAPG Annual Convention, Denver, Colorado, June 12-15, 1994