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Business-Outlook-2018-Facts-and-Figures V5 - Oil & Gas UK
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Business-Outlook-2018-Facts-and-Figures V5 - Oil & Gas UK
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of post-tax cash flow was generated on the. UKCS in 2017, more than in any year since 2011. The average share price of s
Business Outlook 2018 - Facts and Figures
2017 Progress UK upstream
Average unit operating costs have halved from around $30/boe in 2014 to
UKCS production remained flat in 2017 despite some start-up delays and unplanned outages
There were at least five exploration successes in 2017 with a combined discovery of
350
deals in 2017 surpassed $8 billion
million boe
in 2017
Around
The average share price of supply chain companies active on the UKCS increased by
of post-tax cash flow was generated on the UKCS in 2017, more than in any year since 2011
8% in 2017
2017 Challenges Just 94 wells (71 development, 14 exploration and 9 appraisal) were spudded on the UKCS in 2017, the fewest since 1973
Development drilling has fallen by around
45
Exploration appraisal Supplyand chain activity remained revenues have fallen depressed, just by more than
£10 22
Despite cost improvements, aggregate EBITDA for the supply chain fell by around £1.7 billion from 2014-16
Even if all fields discovered last year are developed, the reserves replacement ratio of
0.6
billion wells drilled in 2016 is not enough to sustain production
from 2014-16
in just two years
Outlook Potential At least 12 new developments – worth around £5 billion of capital investment – are expected to be sanctioned in 2018
Production is forecast to increase by around
5% in8
Operating costs could increase by around 5% in 2018 but unit operating costs will stay at
201
Supply chain revenues are expected to stabilise in 2018
£
~£11.30 /boe (~$16 /boe)
62% of supply chain companies surveyed by Oil & Gas UK have a more positive outlook for 2018
Outlook Challenges The fall in investment from 2014-17 means production decline is likely in the early 2020s
Free cash flow remains a major concern for the UK supply chain
Sustaining efficiency gains is vital if the basin is to continue to attract investment
It is important to improve exploration success
and the commercial viability of existing discoveries
The Industry’s National Contribution The UK oil and gas industry supports hundreds of thousands of jobs
The UKCS delivers more than half of the UK’s oil and gas
There are
The UK supply chain is a world leader
The industry is expected to make a consistent contribution of around
£
barrels of oil and gas still to recover
with unrivalled experience in maximising recovery from a mature basin
The wider tax contribution from across the supply chain includes employment, national insurance and corporation
TAX £1 billion per year in production tax revenues over the next five years
oilandgasuk.co.uk/businessoutlook
@oilandgasuk #ogOutlook
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