Risk capital delays drilling

Press, 9 February 1983, Page 30

Risk capital delays drilling

NZPA Sydney About 200 to 270 oil and gas wells will be drilled in Australia in 1983, but rig contracts have been signed for only about half that number because of a lack of risk capital, the chairman of the Australian Petroleum Ex-' ploration Association (A.P.E.A.) chairman. Mr Keith Orchison, has said. Mr Orchison said about sAust76oM will be spent on exploration compared with sAust7so-800M last year when 230 wells, a record number, were drilled.

However, he said only 115 rig contracts had been signed, many companies experiencing extreme difficulties raising risk capital to meet their commitments, mainly because of weakness in the share market’s oil sector.

“Plans for seismic work — the essential precursor to drilling — are at their lowest levels in the last decade and indicate that a dramatic slump could occur in drilling in 1984-85 if the industry is unable to raise large-scale support from Australian investors." Mr Orchison said.

Mr Orchison said an analysis of the association’s 1983 industry survey suggested the number of wells would be about 200 “but a range of factors could lower or raise this figure by 30 to 50."