Hi Ed, main reason would be because the exploration well is not likely to be located at optimum location or shape to be a big producer. Exploration wells are mainly designed for gathering max information, not producing max hc's. Seems strange I know, specially given the massive cost to drill these wells, but they are usually drilled vertically (or near) to TD, and they can't produce as well as a horizontal through the reservoir. However, a well-located discovery well can save many millions in developement costs of a field later by, among lots of other things, telling you where to best locate appraisal and production wells for max drainage of a field. Hope this helps.
MOG Price at posting:
21.5¢ Sentiment: Hold Disclosure: Held
