KUMAR, NARESH
Growth Oil and Gas, Richardson, Texas

Abstract: Exploration of Mature Basins Outside the US: A Niche for the Small Independent

With more than 23,000 entities operating oil and gas wells in the United States, excepting a few areas, the domestic basins are one of the most densely drilled in the world. Independents drill a majority of the domestic wells and control more than one-half of the proved domestic reserves. Until recently, because of the capital, technology, and resources required, international exploration was a domain only for the majors and independents largely restricted themselves to domestic operations. However, with an average oil well producing 12 BOPD in the United States, compared to a world-wide average (excluding the United States) of 170 BOPD, it is critical that companies of any size select opportunities on a global scale.

The majors and large independents, because of their size and cost structure, generally have a threshold of 50 MMBO or more in recoverable reserves for international projects. At the same time, median international discovery is only approximately 10 MMBO. With their low-cost structure and use of technology comparable to that of large companies, small independents can profitably target small discoveries. Such projects can be especially profitable if a multiple of 10 MMBO "targets" can be combined together.

Because most of the host countries are not familiar with the resources and technology that the independents can provide, small companies need to develop local contacts and gain local exposure. To succeed globally, today's independents must have a worldwide outlook, an ability to make decisions rapidly and use technology efficiently. They also need to have a low cost organization, and should be able to raise adequate capital.

AAPG Search and Discovery Article #90928©1999 AAPG Annual Convention, San Antonio, Texas