With the price of oil down by about $50 from a year ago, who wants to drill offshore anyway, much less in deepwater?

Well, ConocoPhillips, for one.

“We’re going to have a very active deepwater drilling program going on in West Africa, the Gulf of Mexico and off the coast of Canada,” said Matt Fox, executive vice president, E&P, speaking to a group of investors and analysts recently. Fox said that ConocoPhillips has three significant discoveries in the Paleogene in the Gulf of Mexico at Gila, Tiber and Shenandoah and will be drilling at least one appraisal well on each of those in 2015.

“We also intend to drill up to five exploration wells this year,” Fox said. “Three are in the Paleogene, and two are in the Miocene.”

Offshore West Africa, the company started a four-well exploration program in Angola to test a presalt play analogous to the Brazilian presalt play. The first well was a dry hole, but the company is drilling a second well now and will complete the four-well program in 2015.

“On the other hand, we had a significant success with our exploration drilling last year in Senegal,” Fox said. “In fact, we drilled two wells and had two significant discoveries that really open up this basin in the deepwater of Senegal. The first discovery was the FAN well, and it discovered high-quality oil in a Cretaceous stratigraphic trap with about 95 ft [29 m] of net pay. The second discovery was SNE, and it’s a different type of Cretaceous play. It’s a mixture of a stratigraphic and structural traps. It discovered 120 ft [37 m] of net oil-bearing sandstone with high-quality oil as well.”

ConocoPhillips will renew drilling during the fourth quarter on the 1.8-million-acre license, where it holds 35% equity with an option to take over operatorship when it moves to development.

“We are going to participate in two significant exploration programs off Canada starting this year,” Fox said. “The first one will be off the coast of Nova Scotia, where we have 30% equity in a 5-million-acre license. Just to put that in context, that is the same size as the Mississippi Canyon protraction area in the Gulf of Mexico.”

The company also will begin an exploration campaign off the coast of Newfoundland between the Jeanne d’Arc fields and the Bay Du Nord discoveries. That will start with a seismic program this year and move into the drilling phase over the next few years.

It’s true that ConocoPhillips has backed off its spending for 2015, down about $1 billion from last year. Even so, that’s an aggressive plan, and deepwater exploration isn’t cheap. Is ConocoPhillips missing the point? Or is management thinking long-term? You can get a good rate on offshore drilling rigs just now, not to mention all of the support services and products that go into drilling operations. Meanwhile, production from these wells could be five to 10 years away, when no one knows what the price of oil will be.

As the immediate shock of lower prices wears off, we can expect to see more of this from the planners of the industry.

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