Deepwater statistical report: GOM development portfolio analysis

Julie Wilson, Wood Mackenzie

An analysis of the Gulf of Mexico’s probable development portfolio can help us better understand the remaining potential of the US GOM. Eight new probable developments were added to the list in 2007, five of which are at least 100 million boe each in size. Overall, there are presently 16 probable GOM developments with an estimated combined reserve of 2.5 billion boe.

Wood Mackenzie values these assets at $13.5 billion (NPV10). Their weighted average development cost is estimated to be $11.60/boe. This is almost $2.00/boe higher than the cost of the fields that are currently under development.

TABLE 1. 2007 Probable Portfolio

Fields that are under development hold 30% more reserve (at 3.3 billion boe) than the probable developments. This difference in size is in part a reflection of the challenges that operators are facing as they explore and bring forward opportunities for development. Operators now have to drill increasingly deeper and more complex prospects that often require imaging beneath the salt canopy. These new prospects also tend to be in greater water depths. Many of the largest probable developments lie in the deeper Lower Tertiary and Lower Miocene plays. The development of these fields presents unique challenges, delaying the peak production of the probable developments portfolio until 2017.

Chevron leads the ranks in terms of the probable developments it holds-a reflection of its successful exploration strategy. BP is second with half the reserves of Chevron. BP has found it a challenge to sustain the development pace it has set in the past. Meanwhile, Shell’s portfolio lacks any large developments.