Determinants of the Timing and Incidence of Exploratory Drilling on Offshort Wildcat Tracts

Kenneth Hendricks and Robert Porter

No 4605, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper documents exploratory drilling activity on offshore wildcat oil and gas leases in the Gulf of Mexico that were sold between 1954 and 1990, with emphasis on the period before 1980. For each year of the lease, we study the determinants of the decision whether or not to begin exploratory drilling, and the outcome of any drilling activity. Our results indicate that equilibrium predictions of plausible noncooperative models are reasonably accurate, and more descriptive than those of cooperative models of drilling timing. We discuss why noncooperative behavior may occur, and the potential gains from coordination.

JEL-codes: D83 L72 (search for similar items in EconPapers)
Date: 1993-12
Note: IO
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Citations: View citations in EconPapers (3)

Published as Hendricks, Kenneth and Robert H. Porter. "The Time And Incidence Of Exploratory Drilling On Offshore Wildcat Tracts," American Economic Review, 1996, v86(3,Jun), 388-407.

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