--> Abstract: Techniques for Analyzing Multiple Objective Prospects, by Brett Edwards and Roger Holeywell; #90914(2000)

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Brett Edwards1, Roger Holeywell2
(1) Rose, Edwards, and Associates, L.L.P, Evergreen, CO
(2) Marathon Oil Company, Houston, TX

Abstract: Techniques for analyzing multiple objective prospects

Multi-zone prospects tend to have more value than single objective prospects, either because the reserves are larger, or the dry hole risk is lower, or a combination of both. However, caution must be used when estimating the reserves and success rates for prospects of this type. The reserves of a multi-zone prospect are not the sum of the reserves of the individual objectives, nor is the discovery probability the sum of the individual probabilities of success, as might be assumed. Methods published by Rose (1992) and Mertha (1995) allow the estimator to rigorously combine each zone's reserve distribution and risk into an equivalent, composite prospect. These techniques require the user to estimate the extent to which each objective depends on the other - the chance of success for an objective, if we knew that the other objective had been successful. Oddly, there are subtle, but important restrictions on the risk and risk dependency estimates that are mathematically allowed. For more than three objectives, the complexity of the risk dependency inputs poses special problems for the estimator. For these situations, individual simulations are easy to construct in Excel and are well within the capabilities of current PC’s. In addition, several "quick-look" techniques are suggested, which can be used to rapidly screen out prospects that cannot meet the economic threshold, and therefore don't require further analysis.

AAPG Search and Discovery Article #90914©2000 AAPG Annual Convention, New Orleans, Louisiana