Unconventional exploration: important plays to watch

We share significant developments from high potential international plays as well as some our findings from several of the latest intriguing, unconventional exploration plays in North America

On 28 July 2014, the long awaited 14th UK onshore licensing round was launched. Licences up for grabs include acreage in the Bowland Shale in the north of England and the Midland Valley in Scotland.

The previous onshore licensing round was opened in 2007 and since then, shale plays in the onshore UK unconventional sector have generated large amounts of interest.

Although large volumes of resources in place are estimated by the British Geological Society, the subsurface and productivity has yet to be proven. Only a handful of wells have been drilled targeting the Bowland shale. Much will be riding on initial well results - but even in the US, the early plays took time to prove commercial and develop.

Perhaps the biggest obstacle in getting exploration activity underway will be in obtaining planning permission to drill, hydraulically fracture and test wells. Extensive public relations exercises are needed before planning applications are even submitted to local councils.

UK block map

*Larger image available in the downloads panel 

Our analysis elsewhere shows that in China, the Sichuan Basin has enjoyed success with a few dozen wells having been completed. Sinopec has reported that most wells have achieved encouraging initial production rates.

To build on this, Sinopec has announced plans to ramp up production in the Fuling and CNPC has also declared its intention to increase investment in its own shale blocks.

If both achieve their respective output goals in 2015, they would collectively surpass China's National Development and Reform Committee's (NDRC) Twelfth Five-Year target of 6.5 bcm (230 bcf).

In North America, the US Lower 48 Rocky Mountains tight oil play of Powder River Cretaceous Sands is a major new addition to our expanded unconventional research, with 20 companies already appraising acreage. EOG is also increasing its activity here, with potential returns reaching almost 30%.

So far, well results have been encouraging. EURs from the Upper Cretaceous sections range from 300 to 500 mboe (65-75% oil) and 500 to 1,000 mboe (65-85% oil) for the Lower Cretaceous zones.

Whilst well costs are roughly US$9.5 million, some have been drilled and completed for less than US$7 million, offering even more compelling returns.

 Powder river map

Also recently added to our analysis is the Lower 48 Appalachian Basin Upper Devonian (UD) shale play which refers to the Rhinestreet, Middlesex, Geneseo and Burkett zones collectively.

Our research shows that current production is already close to 100 mmcfed and 50 further wells are expected by year-end. Due to its location, operators expect that it could help to commercialise marginal portions of the adjacent Marcellus.

UD operators already benefit from Marcellus project build-outs and their wells have reduced pad and infrastructure costs of roughly US$850,000. This, in turn, reduces UD breakeven prices by US$0.25/mcfe.

Read more 
Global unconventional plays wall map
Unconventional plays to watch [Subscription required]
14th UK onshore licensing round launched [Subscription required]
Bowland-Hodder shale gas unconventional play [Subscription required]

Media enquiries
If you would like to interview one of our experts please get in touch with one of our regional press offices or email us at press@woodmac.com.

Find out more
Wood Mackenzie's upstream research can help you understand emerging and proven unconventional plays and benchmark costs, economics and above-ground risk for both gas and liquids plays.

To find out more send your details via the 'Register Interest' button below and we will call you.

Register Interest