The Economics of Exploration in the UK Continental Shelf: the 2015 Perspective

A new research paper from Professor Alex Kemp and Linda Stephen finds that substantial cost reductions are necessary to stimulate exploration in the UKCS.  The paper measures the prospective pre-tax and post-tax returns facing an explorationist in the UKCS.  The analysis highlights the risks involved in the cycle of activities through the exploration, appraisal, development and production stages.  Extensive use is made of the Monte Carlo technique to acknowledge these risks and measure their consequences for the expected returns.