--> ABSTRACT: Plays and Concessions - A Straightforward Method for Assessing Volumes, Value, and Chance, by P. Jeffrey Brown and Peter R. Rose; #90906(2001)

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P. Jeffrey Brown1, Peter R. Rose1

(1) Rose and Associates L.L.P, Austin, TX

ABSTRACT: Plays and Concessions - A Straightforward Method for Assessing Volumes, Value, and Chance

It is an exploration "fact of life" that, while the Prospect is the economic unit of exploration, the Play is the operational unit. Due to the magnitude of expenditures (both money and manpower) and time framework involved, the most difficult and critical task in Exploration is selecting which plays in which to explore, not which prospects to drill.

We present a simple but powerful method for evaluating the geologic (and economic) chance, volume and value of geologic plays. The methodology is applicable for a spectrum of opportunities, from a medium-sized concession to a full geologic play. This monetization approach fills an 'analytical gap' between traditional methods for assessing volumes and geologic chance for plays (e.g., Baker et al., 1984,) and assessing the value of individual prospects (e.g., Rose, 1992, White 1994).

Required inputs (only seven variables) are tied to company strategy (e.g., activity level, risk tolerance), and to units of natural measure (forecast geologic discoveries, their size distribution, and historic success rates) that can be validated against historical (or analog) results. The small number of requisite input variables encourages making multiple sensitivity cases for an exploration program.

Calculated outputs provide powerful information that can be used to prioritize a company's exposure to various trends, leading to a portfolio of Plays. The process flow can be created quickly using Microsoft Excel and its embedded functions, as demonstrated in our poster session. Spreadsheets can be customized to model optimal activity levels and working interest, based upon a company's risk tolerance.

AAPG Search and Discovery Article #90906©2001 AAPG Annual Convention, Denver, Colorado