ROSE, PETER R. , Rose, Edwards Associates, LLP, Austin, Texas

The "Prospector Myth" is the oil business version of the "Hero Journey". Explorationists are informed and inspired by the image of the courageous lone prospector, struggling against Mother Nature, financial hardships, skeptical associates, and repeated rejection by potential investors, yet finally prevailing through persistence, faith, and luck, to achieve wealth and fame. Most of us know personally (or know of) one or more successful prospectors.

And yet, we know that most modern petroleum exploration is carried out by geotechnical teams, not individuals. Most substantial oil companies consider an inventory of many candidate drilling ventures, from which they select the annual drilling portfolio, containing those prospects which maximize value, consistent with acceptable risk. If portfolio management is to succeed, each prospect must be assessed consistently and objectively. Geostatistics can deal with the inherent uncertainties--what kills the portfolio is bias.

The "Prospector Myth" is the primary reason why explorationists persistently overestimate prospect reserves--after all, such dedicated prospectors are born optimists: they could hardly be expected to be ruthlessly objective about their prospects!

Industry has dealt with the dilemma in various ways. A common solution pits geoscientists against engineers. Another encourages executives to exercise their exploration intuition to identify which prospects are to be drilled. Today, growing adoption of consistent prospect risking methods, together with 1) continuous improvement procedures comparing geotechnical predictions vs. outcomes; 2) revised criteria for success (creating value vs. getting the prospect drilled); and 3) an appeal to geotechnical professionalism, may offer practical remedies to the problem.

AAPG Search and Discovery Article #90908©2000 GCAGS, Houston, Texas