Mike Tholen, Oil and Gas UK's Upstream Policy Director, said: “This year has been a very busy one for M&A activity which must be seen as a sign that confidence is returning the basin. Now with Transferable Tax History (TTH) in play, we expect that M&A activity will continue into 2018 as established players can more easily divest their non-core assets to companies better suited to invest in them and extend field life.
“Analysis shows that when an asset changes operatorship, average field life extension of nearly five years is achieved, and I am confident that trend will continue to shape the future of the UKCS.”
Although larger discoveries are still being made in the UK - with the basin's technical exploration success topping 300 million barrels of oil equivalent for a second consecutive year - the Market Insight, which has a special section on wells, notes that challenges do still exist within the drilling and wells area of the industry.
The low level of development drilling during 2017 is of particular concern, with just 63 wells drilled during the first three quarters of the year.
Mr Tholen added: “Oil and Gas UK's Wells Forum is working with the industry on a basin-wide performance improvement strategy which will help to make well construction a more efficient and cost-effective process.
“Success in our wells strategy will create a virtuous circle to help unlock more opportunities on the UKCS.”
Oil & Gas UK plans to release a Market Insight Report every six months, with each issue featuring a different area of focus.
Read the first Market Insight Report 2017 here.