Wildcat Drilling

AAA

DEFINITION of 'Wildcat Drilling'

The process of drilling for oil or natural gas in an unproven area, that has no concrete historic production records and has been unexplored as a site for potential oil and gas output. The most successful energy companies are the ones with a very high rate of drilling success, irrespective of whether the wells are drilled in known areas of production.


Wildcat drilling is also known as exploratory drilling.

INVESTOPEDIA EXPLAINS 'Wildcat Drilling'

The term "wildcat drilling" probably has its origins in the fact that drilling activity in the first half of the 20th century was often undertaken in remote geographical areas. Because of their remoteness and distance from populated areas, some of these locations may have been, or appeared to be, infested with wildcats and other untamed creatures. Presently, with global energy companies having scoured much of the earth's surface, including oceans, for oil and gas, few areas remain unexplored for their energy potential.


Wildcat drilling amounts to a small proportion of the drilling activity of large energy companies. For small energy companies, wildcat drilling can be a "make-or-break" proposition. Investors in such companies can reap significant rewards if such drilling results in locating large energy reservoirs. Conversely, wildcat drilling that repeatedly results in dry holes can lead to adverse performance for a small-cap energy stock.

RELATED TERMS
  1. Spud

    In the oil and gas industry, the process of beginning to drill ...
  2. Oil Reserves

    An estimate of the amount of crude oil located in a particular ...
  3. Sour Crude

    The name given to barrels of crude oil that do not meet certain ...
  4. Wildcatting

    A policy instituted by the Securities and Exchange Commission ...
  5. Barrel Of Oil Equivalent (BOE)

    A term used to summarize the amount of energy that is equivalent ...
  6. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
Related Articles
  1. Oil: A Big Investment With Big Tax Breaks
    Investing Basics

    Oil: A Big Investment With Big Tax Breaks

  2. Oil And Gas Industry Primer
    Active Trading

    Oil And Gas Industry Primer

  3. A Primer On Offshore Drilling
    Forex Education

    A Primer On Offshore Drilling

  4. Unearth Profits In Oil Exploration And ...
    Active Trading

    Unearth Profits In Oil Exploration And ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center