Understanding Deepwater Field Size Distributions

Ryan J. Wilson
Anadarko Petroleum Corporation, The Woodlands, TX

The method of using basin-wide field size distributions to predict the expected size of discoveries in a new play tends to under-predict reserves compared to actual results. Over time, the mean field size for a play in a basin becomes smaller as the play matures. This happens because companies target the largest risk weighted prospects first in order to maximize their return on investment, hence inadvertently applying a weighting factor to the distribution of outcomes through time. This concept is well illustrated by analyzing recent exploration results in deepwater basins worldwide. The estimated mean field size for a deepwater prospect can be as much as ten times under-predicted when using non-deepwater basin statistics as a guideline. Under-predicting the initial field size distribution in a new play translates directly into the economic analysis and can result in poor portfolio management decisions. Therefore, temporal analysis of field size distributions, as well as other petroleum system characteristics, should be utilized when constructing reserve distributions for prospects in new plays and frontier areas.