Geophysical Direct Hydrocarbon Indicators (DHIs) have long been the holy grail for explorers, providing a means to predict discoveries ahead of the drill bit.  But how effective are they?  In a new study[1] Westwood has reviewed over 500 wells drilled since 2008 with DHIs reported pre-drill and compared actual success rates against global exploration benchmarks for all wells.

The evidence, from the 2008-14 period, shows that DHIs were far from being the holy grail with overall delivered success rates actually lower than the global benchmark. This has changed since 2014 though, and the success rates for prospects with DHIs has increased across the board.

Figure 1. Commercial success rates in DHI supported wells compared to Global exploration success rates for all wells.
Source: Westwood Wildcat Database

Commercial success rates (CSR) for all exploration wells increased 5% points in the 5 years after 2014 whilst for DHI supported wells they increased by 11% points and both are now 34%.  In 2019 the CSR for DHI supported wells exceeded the global benchmark by 8% points.

So, the underperformance has disappeared but what has been driving the improvement?

DHIs improve success rates in stratigraphic trap exploration

Westwood statistics show a growing appetite for stratigraphic exploration with over a quarter of all prospects drilled in 2019 being stratigraphic compared with just 12% of prospects in 2008. In this style of exploration effective DHIs are crucial. The CSR for DHI supported stratigraphic trap wells was just 7% in 2013 and lagged the benchmark for all wells targeting stratigraphic traps by 19% points.  CSRs for DHI supported stratigraphic trap wells improved to over 50% in 2018 and 2019, comfortably outperforming the all well benchmark.

The good news is that explorers are becoming more confident in their ability to search for the subtle trap. Combining consistently well-conditioned seismic data with sound geological models is the key to applying DHIs effectively.

Figure 2. Commercial success rates in DHI supported wells targeting stratigraphic traps compared to Global exploration success rates for all stratigraphic wells.
Source: Westwood Wildcat Database

Find out more about the DHI report, here.

[1] The impact of DHIs on exploration performance.  Westwood November 2019

Andrew Jackson, Analyst, Global Exploration & Appraisal
ajackson@westwoodenergy.com