--> ABSTRACT: The Multi-Zone, Multi-Prospect Value Dilemma, by William J. Haskett; #91020 (1995).
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The Multi-Zone, Multi-Prospect Value Dilemma

William J. Haskett

Attempting to realistically represent the reserves/value of multiple zone prospects, multiple prospect drilling programs, or trends can be exceptionally difficult without specific technical information, sound geological reasoning and appropriate method. Such calculations require an understanding of the independent and dependent risks of the opportunities as well as an appreciation of the tactical operating "personality" of the company.

A portfolio of independent opportunities of similar size and shape is able to be valued using Previous HitbinomialTop probability calculations, but in reality, this scenario is extremely unlikely. It is ideal that the explorationist uses more complicated methods of reserves/value determination when there is variation in the uncertainty or the risk of the individual opportunities. Dependency requires alternate methods. It is important that the explorationist be able to discern when "close" is good enough and to be able to modify the reserves/value determination method accordingly.

Risk factors may be fully or partially dependent between targets. Spatial representation of zone probabilities and dependencies provides a new way to visualize and quantify outcomes. To evaluate fully and fairly the reserves and or value of dependent targets, one may create a decision tree of gigantic proportions, or make use of computer simulation. Appropriate spreadsheet software will allow for rapid simulation of complex dependencies.

AAPG Search and Discovery Article #91020©1995 AAPG Annual Convention, Houston, Texas, May 5-8, 1995