Development of an Exploration Strategy: a Case Study

Lee C. Gerhard, Lee A. Graber, Erling A. Brostuen

Evaluation of economic, geologic, and production constraints and consequent development of exploration strategy can improve management of exploration costs and enhance exploration success rates within overall budgetary constraints. One example of exploration planning sets corporate budget, reserve addition objectives, and other constraints and asks "Where can we explore in the lower 48 onshore to meet these constraints and still meet financial objectives?" The question is answered by examination of economic, geologic, and production factors in the various geologic provinces. Resulting quantitative and qualitative data are tabulated and ranked in a decision matrix.

In the one scenario, based on a budget of $5 million per year for 10 years, objectives of 25 million bbl of reserve additions in 5 years, with exposure to at least one 50-million bbl field opportunity in 10 years, analysis of 16 geologic, cost, and engineering factors suggests that the Rocky Mountains province ranks as most desirable; the southeast and Permian basin provinces follow closely. Other managers may wish to assign different weights to the various factors and may arrive at different conclusions. However, the method of analysis can give strong direction to exploration programs.

AAPG Search and Discovery Article #91033©1988 AAPG Rocky Mountain Section, Bismarck, North Dakota, 21-24 August 1988