Our skilled and creative geologists and geoscientists screen the entire world for attractive opportunities based on their regional knowledge and subsurface competence that cumulatively spans over two hundred (200) years. Projects are ranked and prioritized globally to ensure we pursue the most attractive opportunities.
In order to explore for and produce oil and gas within a specified geographical area, Philux Energy requires an exploration or production license. New licenses can be acquired through government licensing or bid rounds, through direct negotiations or through business deals with other companies holding licenses. We have a formidable legal team that works on obtaining the requisite licenses for our oil prospecting, exploration and production.
When venturing into a new area, a first important step in the exploration process is understanding the sub-surface rock structures, in order to determine where there can be potential for hydrocarbons. Well info (where available) and space information is vital.
Seismic data acquired is processed into images of the sub-surface structures. These images are finally interpreted by our highly skilled and professional geoscientists.
Based on what we have learned from the maturation stage, we assess the probability of finding oil and gas. Prospects that are considered the most geologically interesting are then explored through one or more wells. Before actually drilling the wells, we do not know which prospect will be successful. This emphasizes the importance of having a broad portfolio with many options and this is where our ingenuity comes in at Philux Energy.
The development stage takes place after a significant oil or gas discovery has been found to be commercially viable. A final investment decision is based on a development concept, which fully addresses the complexities of the field, in particular related to reservoir management, recovery rates and project execution. Some projects will require tailor-made solutions and pioneering technology in order to be developed. Between the maturity years and the start of a new one: the production phase. This can go on for several decades, and throughout this time, new wells might be drilled to increase production. It is instructive to note that exploration is a portfolio game.
We therefore contemplate exploration to be a long portfolio game and aver that an opportunity-rich and balanced portfolio is that the key to undefeated exploration on our stable.
The typical likelihood of finding oil or gas in a very frontier unknown space will be as low as ten to fifteen p.c, and that interprets into one discovery for each seventh exploration well. This is why it is essential to have an attractive opportunity set to ensure that we do not fully depend on the exploration results in any single area. As we test the prospects in our exploration portfolio, we need to replenish them with new opportunities to make sure we always maintain optionality and efficiency.
Another basic principle of a strong exploration portfolio is to maintain an appropriate overall risk-volume-value balance. The geological chance of success varies significantly for different types of opportunities. While it is quite low for frontier basins, it increases significantly for exploration near existing infrastructure in mature basins, which enjoy probabilities of 50 percent or above.
These prospects also rate high on value, as they can be quickly and efficiently tied into existing infrastructure. On the opposite hand, these prospects usually deliver lower volumes than frontier prospects. Philux Energy has a well-balanced global exploration portfolio, so the risk we are taking in our frontier high-potential wells is balanced by exploration in the mature areas with high discovery rates though modest volumes.