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Abstract: Achieving Consistency in Exploration Risk Assessment--A Key to Improving Exploration Success

Andrew M. Conway, Matthew O. Strickland

Selecting the best exploration opportunities within a given exploration strategy requires an economic evaluation of exploratory prospects. This involves the assessment of many uncertainties that have a range of possible outcomes. Geologic risk, reserves distributions and economic value estimate are the essential elements for selecting an appropriate prospect portfolio. But comparing exploration opportunities can only be achieved if consistent, unbiased quality prospect evaluations are provided.

This paper reviews the methodology and tools used to achieve consistency in exploration risk assessment. Emphasis is placed on following a simple, concise process that allows the explorer to focus on the key exploratory uncertainties--geologic risk and reserves ranges--in order to derive expected value estimates for a prospect. This process begins with 'early framing' of the decision where objectives are identified, alternatives reviewed, and uncertainties discussed. The involvement of multidiscipline teams, peer review and multiple working hypotheses at this early stage is highlighted as an important element toward achieving consistency. The use of historical data to provide analogs and computer tools to assist in the risk analysis is also discussed, with a focus on keeping the tools user-friendly and effective.

To create a visible and accessible prospect inventory and select the best opportunities possible requires comparison of predictions vs. actual results and regular benchmarking efforts of exploration performance. An approach that embraces these concepts together with consistent 'early framing' ideas forms the basis of this paper.

AAPG Search and Discovery Article #90951©1996 AAPG International Conference and Exhibition, Caracas, Venezuela