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

51 Pages Posted: 29 Dec 2000 Last revised: 16 Aug 2010

See all articles by Kenneth Hendricks

Kenneth Hendricks

University of Texas at Austin - Department of Economics

Robert H. Porter

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 1993

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.

Suggested Citation

Hendricks, Kenneth and Porter, Robert H., Determinants of the Timing and Incidence of Exploratory Drilling on Offshort Wildcat Tracts (December 1993). NBER Working Paper No. w4605. Available at SSRN: https://ssrn.com/abstract=253137

Kenneth Hendricks (Contact Author)

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States
512-475-8532 (Phone)
512-471-3510 (Fax)

Robert H. Porter

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States
847-491-3491 (Phone)
847-491-7001 (Fax)

National Bureau of Economic Research (NBER)

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