Abstract: Exxon's Approach to Improving Exploration Results

W. E. Sparks Jr.

One of Exxon's goals is to pursue the highest quality exploration opportunities worldwide. To accomplish this goal, we use an approach that allows us to systematically compare the different exploration areas worldwide in order to identify and focus on the highest quality basins and plays, prioritize investment opportunities that are identified in these areas, and allocate our resources appropriately.

The process begins with the development of a list of basins that are ranked according to their assessed undiscovered potential and the geotechnical characteristics of their hydrocarbon systems. This basin scale seriatim or rank list is then used to identify the highest quality "focus" plays within the higher potential basins and hydrocarbon systems. The ranked list of basins and plays becomes the foundation for development of an "Opportunity Seriatim."

There are three principal components incorporated into Exxon's Opportunity Seriatim: (1) Geotechnical appraisal -- How good is the resource?, (2) Accessibility - Can we or will we be able to access the resource?, and (3) Economics - will we make an acceptable profit if we access the resource? After these components are considered, additional adjustments are made to the Opportunity Seriatim.

The Opportunity Seriatim is then used to develop strategies which are globally consistent to build and maintain a broad portfolio of the highest quality opportunities, and finally, to select the best quality prospects in our highest quality plays for funding. Prospects are selected based on risk vs. reward ratio, drilling commitments, and appropriate economic yardsticks.

Using this process, Exxon has steadily improved its exploration performance. Over the last ten years, the volume of reserves Exxon discovers has increased, our drilling success rate has improved substantially, and our finding costs have continued to fall. We believe that the continuing improvement in exploration results is closely related to the increased selectivity and focusing from our Opportunity Seriatim process.

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