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Prospecting is the very first stage of the oil and natural gas development process. It consists of Exploration, Permitting and Leasing.

Exploration encompasses the processes and methods involved in locating potential sites for oil and gas drilling and extraction. Numerous tools are used to identify and characterize “prospects” for oil and natural gas development. These tools range from basic geological and paleontological understanding of a reservoir to acoustic and magnetic seismography enhanced by 3D imaging. Other factors such as road access, topography, and prior drilling results (if any) are also considered. If available, data from already existing wells in the reservoir is analyzed, such as well logs, cross-section data, and Estimated Ultimate Recovery (EUR), which is an estimate of the expected recovery of oil or gas from a producing well. Finally, the location must be economically and regulatorily available.

Permitting and Leasing are closely intertwined and follow exploration. Prior to drilling in hydrocarbon fields that were identified through the exploration process, permits and leases must be secured from the entity that owns the land and its associated mineral rights. In the United States there are four types of land ownership which influence this process: Private, Federal, State, and Tribal. The Federal Government manages leases on the outer continental shelf of the United States for offshore activity as well. The United States is the only country in the world that allows private ownership of mineral rights. Outside the United States, permitting and leasing of mineral rights are generally a government-managed process.

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