--> ABSTRACT: Current Economic Bias Against Exploration, by J. M. Campbell and Charles Campbell; #91025 (2010)

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Current Economic Bias Against Exploration

J. M. Campbell, Charles Campbell

The current economic climate has motivated many companies to greatly reduce their commitment to exploration. The continued de-emphasis on exploration largely results from several biases against exploration in the economic methods employed to justify that investment. This paper explores the cause of that bias and illustrates why that bias is inconsistent with the stated goals of most exploration companies and the future well-being of the industry.

After careful review of the biases, we propose alternative methods for evaluating exploration ventures. These alternatives are easy to understand and represent an extension of existing knowledge for most people. The methods are easily adaptable to most computer programs or can be included in most spreadsheets.

Alternative methods for analyzing the merits of exploration investments are important today. The traditional methods developed during the early days of the industry fail to reflect the changing characteristics of the industry and the depletion of existing reserves. Only by more wisely adapting investing methods can the industry expect to meet the challenges of the future.

AAPG Search and Discovery Article #91025©1989 AAPG Midcontinent, Sept. 24-26, 1989, Oklahoma City, Oklahoma.