Tuesday, June 28, 2016 1:39:42 PM
"The practice of allowing E&P companies to keep some well-related information under wraps is not new, nor is it usually controversial. It began decades ago with so-called “wildcat” drilling, in which companies explored in undeveloped areas where little or nothing was known about the subsurface geology.
"Given those uncertainties, regulators began granting tight hole status to ensure E&P firms that the fruits of their labors — whether good or bad — would not immediately be disseminated for their competitors, shareholders and potential investors to observe and act upon. For example, a company that spent millions to drill in an unproven area might not want Wall Street to immediately know that it drilled a dry hole.
"Granting confidentiality also gave risk-taking companies some time to perfect their title and other paperwork if they drilled a high-producing well. It also afforded firms an opportunity to buy up additional tracts of land around high-performing wells. The rationale was that a firm that makes a risky, expensive decision to drill in an unproven area should be rewarded by getting additional time to expand its operations there. If regulators did not suppress the news of a high-performing well, the company’s competitors might swoop in and buy up all the adjacent leases.
“If you have a significant completion, and there is acreage available, you don’t want that particular completion to be made public until you have leased as much acreage as you possibly can around it,” said Whiting Petroleum’s Ekstrom.
"Ekstrom added that confidential status can be especially important for small producers whose stock price and market-capitalization value could be significantly impacted by the success or failure of just one well."
http://blogs.platts.com/2012/08/21/wildcat_or_not/
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