OT14000 | PRT: non-field expenditure - exploration and appraisal expenditure: searching and ascertaining

OTA75\S5A(2)(a)-(c)

Searching and ascertaining (or exploration and appraisal) will cover

• the cost of shooting or purchasing seismic (in contrast to the CT provisions, see OT26045, there is no distinction between seismic that is directly commissioned or purchased)

• the cost of interpreting seismic data

• drilling exploration wells

• further evaluation of the geological prospects

• drilling of wells to ascertain the extent of the reservoir, testing flow rates etc.

Conversely, it will not include

• production feasibility studies

• preliminary engineering and design work studies

• work done on evaluating another company’s prospects before buying its share capital or seeking to ‘farm in’ (see OT18320)

• drilling of future production slots under the guise of appraisal wells

• economic studies.

Both these lists are intended as a guide and not to be exhaustive.