Do technical studies reduce subsurface risk in hydrocarbon exploration: and if not, how do they add value?
Do technical studies reduce subsurface risk in hydrocarbon exploration: and if not, how do they add value?
The title ‘The Value of Outcrop Studies in Reducing Subsurface Uncertainty and Risk’ might suggest that we expect new information to improve prospect risk, but this is not correct. Gaining new information generally does change our estimate of prospect risk: the change may be up or down, and the average of all possibilities is zero change. You cannot acquire data for the purpose of increasing the probability of success. We should expect that: (a) the expected value of the risk of a single prospect, post-data, is equal to the prior (pre-data) value; and (b) risk should become worse for the majority of prospects. New information adds value, not from changing pre-drill risk, but from decisions made as a consequence. The main value added is from identifying prospects not to drill, thereby saving the cost of likely dry holes, and by choosing the ones to test first, accelerating revenue from a successful outcome. Further value is added if the new information leads to the identification of new prospects or new plays, or suggests follow-on potential elsewhere in the region. Value may also be added if the new information is negative for a whole region, enabling us to focus our attention elsewhere.
247-259
The Geological Society of London
Peel, Frank J.
ccbb86f8-56a0-4b59-b664-e772a9c4015f
White, Jonathan
2e38abdc-fad1-4c46-bd1d-2b5f241e13d8
December 2016
Peel, Frank J.
ccbb86f8-56a0-4b59-b664-e772a9c4015f
White, Jonathan
2e38abdc-fad1-4c46-bd1d-2b5f241e13d8
Peel, Frank J. and White, Jonathan
(2016)
Do technical studies reduce subsurface risk in hydrocarbon exploration: and if not, how do they add value?
In,
Bowman, M., Smythe, H.R, Good, T.R., Passey, S.R., Hirst, J.P.P. and Jordan, C.J.
(eds.)
The Value of Outcrop Studies in Reducing Subsurface Uncertainty and Risk in Hydrocarbon Exploration and Production.
(Geological Society of London Special Publications, 436)
London, GB.
The Geological Society of London, .
(doi:10.1144/SP436.4).
Record type:
Book Section
Abstract
The title ‘The Value of Outcrop Studies in Reducing Subsurface Uncertainty and Risk’ might suggest that we expect new information to improve prospect risk, but this is not correct. Gaining new information generally does change our estimate of prospect risk: the change may be up or down, and the average of all possibilities is zero change. You cannot acquire data for the purpose of increasing the probability of success. We should expect that: (a) the expected value of the risk of a single prospect, post-data, is equal to the prior (pre-data) value; and (b) risk should become worse for the majority of prospects. New information adds value, not from changing pre-drill risk, but from decisions made as a consequence. The main value added is from identifying prospects not to drill, thereby saving the cost of likely dry holes, and by choosing the ones to test first, accelerating revenue from a successful outcome. Further value is added if the new information leads to the identification of new prospects or new plays, or suggests follow-on potential elsewhere in the region. Value may also be added if the new information is negative for a whole region, enabling us to focus our attention elsewhere.
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Accepted/In Press date: December 2015
e-pub ahead of print date: 16 December 2015
Published date: December 2016
Organisations:
Marine Geoscience
Identifiers
Local EPrints ID: 385544
URI: http://eprints.soton.ac.uk/id/eprint/385544
PURE UUID: b5d11418-7708-403a-891a-556feff662c5
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Date deposited: 06 Jan 2016 11:15
Last modified: 14 Mar 2024 22:19
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Contributors
Author:
Frank J. Peel
Author:
Jonathan White
Editor:
M. Bowman
Editor:
H.R Smythe
Editor:
T.R. Good
Editor:
S.R. Passey
Editor:
J.P.P. Hirst
Editor:
C.J. Jordan
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