[First Hit]

Datapages, Inc.Print this page

LEVEILLE, GREGORY P., Conoco Inc., Houston,Texas

Abstract: Managing Risk and Uncertainty in Frontier Deep-Water Exploration Ventures

Prospect-focused quantitative risk Previous HitanalysisNext Hit methods generally do a poor job of assessing the value of frontier exploration plays because they do not handle shared risks and uncertainties in a rigorous manner. Given that most of the deep-water basins of the world are currently either unexplored or are relatively under-explored, this is a significant problem - a problem which if not recognized and corrected may lead to sub-optimal investment decisions for individual exploration companies and the upstream industry as a whole. Previous HitPlayNext Hit-scale risk Previous HitanalysisNext Hit methods that correctly deal with shared risks and uncertainties are therefore required for assessing the potential of frontier deep-water exploration ventures.

Previous HitPlayNext Hit-scale risk Previous HitanalysisNext Hit methods provide better value assessments than prospect-focused techniques in frontier plays because the value of a frontier Previous HitplayNext Hit is generally greater than the sum of the values of the individual prospects in the Previous HitplayNext Hit. This is true as long as 1) the Previous HitplayNext Hit consists of multiple prospects, 2) some risks and/or uncertainties are shared amongst the prospects, and 3) one has the option to stop exploring if condemning or strongly negative information is acquired during the exploration program. While every Previous HitplayNext Hit will be different, in general, plays with a high proportion of shared risks and uncertainties and a large numbers of prospects will have the greatest variance between Previous HitplayNext Hit based and prospect based value assessments. Because frontier plays generally have these attributes, prospect-focused risk Previous HitanalysisTop methods often undervalue these plays enough to impact resource allocation decisions and exploration strategies.

AAPG Search and Discovery Article #[email protected] International Conference and Exhibition, Birmingham, England