Why Are Offshore
Assets Attractive?
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large offshore assets offer more significant opportunities for redevelopment
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complex geology lends itself to finding additional reserves
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reserves de-risked over time in many cases without additional CAPEX
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offshore crude oil-centric assets typically have
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lower decline rates
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substantial rates of cash flow from operations
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revenues unaffected by local market forces
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the worldwide playing field opens up opportunities to acquire under-valued, under-
exploited assets of major oil companies
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shortage of offshore capable players due to industry/capital shift to onshore shale
plays -
higher cost of entry requirements - operational excellence, financial strength
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existing asset teams lack resources of capital and/or are stuck in “harvest” mode
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the US Outer Continental Shelf (OCS) provides a stable business environment for investment
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predictable legal, regulatory and fiscal framework
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world-class infrastructure coupled with abundant service providers
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highly competitive market without dominant players
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highly attractive drilling economics with developments looking for capital partners
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equity and capital infusion toward unconventional shale (resource) plays have created market discontinuities in terms of
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competition for positions in the best shale plays has over-heated
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some legacy conventional plays assets becoming stranded, under-capitalized
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publicly traded companies are no longer the “natural owner” of these smaller assets
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the perceived no-risk “manufacturing process” of resource plays was proven false
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not all rock is the same
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over-extension of lines of credit led to multiple bankruptcies
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the “Energy Transition” is proving to take decades, not years
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crude oil assets will be needed for substantially longer than anticipated