Gary P. Citron1,
Peter R. Rose2
(1) Rose, Edwards & Associates, Houston, TX
(2) Rose, Edwards & Associates, L.L.P, Austin, TX
Abstract: Reality checks, performance tracking and calibration of exploration portfolios
As companies strive to assess exploration prospects systematically, results arrive that can convey valuable lessons. Companies that choose to critically examine such results (and adopt the procedural and technical changes that are indicated), usually improve their exploration efficiency. We report here on pertinent reality checks, post-appraisal patterns, and resulting calibration along that desired path of improvement. Reality checks include reconciling your assumptions with archived predrill estimates. Potential prospect reserve ranges often carry low-side numbers that, based on known occurrences, are too high. This significantly contributes to overestimation of prospect reserves and reduced credibility. Estimation bias within organizations is typically endemic, but can be reduced with feedback. Portfolio-level scrutiny of recoverable reserve estimates versus actuals (at the portfolio level) can often determine if bias exists. Cross plotting of volumetric component estimates vs. actual outcomes help determine the nature and extent of such bias. Determination of dry-hole causes, especially when compared to forecast critical risks, improves estimates of geologic success, and makes geotechnology more cost-effective. The Firm's challenge is to develop calibrated systems of chance and volume as well as profitability. Assessment processes that incorporate learning usually generate more predictable results. Geotechnically sound, systematic risking systems, continuously calibrated with actual drilling results can be expected to deliver more efficient exploration results, which approach predicted portfolio performance much more closely.
AAPG Search and Discovery Article #90914©2000 AAPG Annual Convention, New Orleans, Louisiana