Wildcat Drilling

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.

BREAKING DOWN '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. Wildcatting

    A policy instituted by the Securities and Exchange Commission ...
  4. Sweet Crude

    A type of oil that meets certain content requirements, including ...
  5. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  6. Sour Crude

    The name given to barrels of crude oil that do not meet certain ...
Related Articles
  1. Investing Basics

    Oil: A Big Investment With Big Tax Breaks

    Oil and gas investments can provide unmatched deduction potential for accredited investors.
  2. Active Trading

    Oil And Gas Industry Primer

    Before jumping into this hot sector, learn how these companies make their money.
  3. Forex Education

    A Primer On Offshore Drilling

    Learn the important ratios and terms that you'll need to know to get involved in this trading sector.
  4. Active Trading

    Unearth Profits In Oil Exploration And Production

    Drill down into financial statements to tap into the right companies and let returns flow.
  5. Markets

    What Drives Oil Prices?

    Have you ever wondered why oil’s price fluctuates more than the value of other investments?
  6. Investing News

    Obama Floats $10 a Barrel Oil Tax

    President Obama intends to propose a $10 a barrel tax on oil; consumers might have to cough up 25 cents more per gallon.
  7. Fundamental Analysis

    4 Predictions for Oil in 2016

    Learn four predictions for oil markets in 2016 including where prices are heading and the key fundamental factors driving the market.
  8. Investing News

    Gartman: Oil Swings to Flatten Out at $27-$47

    Trying to figure out if oil has bottomed? The opinions of the names listed below might give you some insight.
  9. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  10. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
RELATED FAQS
  1. Is Norway a developed country?

    Norway is a highly developed country, and typically has a world GDP ranking in the top 30, with a 2014 GDP at $500 million ... Read Full Answer >>
  2. Is Qatar a developed country?

    Qatar is a developing country, according to the United Nations. However, as the country with the highest gross domestic product ... Read Full Answer >>
  3. Why do some oil refineries get tax exemptions?

    Oil refineries normally receive tax exemptions due to tax loopholes. The extracted fuel exemption, for example, one of the ... Read Full Answer >>
  4. How much oil must be produced to maintain inventory levels in the United States?

    Domestic energy investors should track the reserve inventory of crude oil for the United States, which is released in a weekly ... Read Full Answer >>
  5. To what extent is the oil and gas sector dominated by a few major companies?

    Oil and gas are two expansive and highly diverse product lines, with active competition domestically and internationally. ... Read Full Answer >>
  6. Do all oil companies received the quoted price of West Texas Intermediate for their ...

    The quoted, or spot, price of West Texas Intermediate, or WTI, crude oil is just one of several benchmark oil prices. The ... Read Full Answer >>
Hot Definitions
  1. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  2. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  3. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  4. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  5. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center