--> Abstract: Examining Appraisal Project Values for Both Portfolios and Appraisal Plans, by Peter Cunningham; #90039 (2005)

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Examining Appraisal Project Values for Both Portfolios and Appraisal Plans

Peter Cunningham
Consultant, Decisions Unlimited, Tarland, United Kingdom

After discovery, appraisal projects often do not easily sit in a company's asset portfolio due as the unknown reservoir size and flowing capacity. Further data acquisition and interpretation are required to value and advance the project. But before the appraisal occurs, it is difficult to place the asset in terms of the other assets in the portfolio. Also creating a focused appraisal planning is difficult and often appraisal occurs on a well by well basis, which may lead to overcapitalisation.

By focusing on the key uncertainties the appraisal is addressing, allows companies to both value their projects in terms of their portfolio and to create focused appraisal programs that rapidly advances the project. By examining how the appraisal work is helping to create value allows the project to be valued in terms of the inherent uncertainties. And by using a series of simple decision trees, the whole learning process that occurs during appraisal is incorporated into the analysis to understand how the appraisal work is advancing the project and help create focused appraisal programs.

AAPG Search and Discovery Article #90039©2005 AAPG Calgary, Alberta, June 16-19, 2005