Estimating the Required Resource Volumes and Sources to Meet Strategic Targets

Abstract

This presentation describes an internally consistent method to link future strategic production targets to the various sources of future production that are available to a company; exploration, acquisition of conventional or unconventional assets, and improved recovery from existing fields. The methodology requires initial estimates of the company's exploration prospect inventory, proven reserves, and non-proved resource base. The model employs a variety of user-controlled parameters, such as the commonly used R/P ratio, and less common yet important ratios such as Reserve / Non-Proved Resources, Exploration Success Rate, and the efficiency of converting Exploration Discovered Volumes to Non-Proved Resources. These ratios can be set with knowledge of the company's competitor set. With the addition of estimated average costs to pull through all the resources to reserves, the company can develop an initial total plan and annual cost. Company leaders can use the insights gained from the initial passes to iterate the strategic goals, acceptable ratios and overall costs to reach an agreed set of achievable and financially prudent targets. The company can then allocate various parts of the targets and budgets to the operating divisions. This methodology is designed to produce accurate, but not precise views of the future. The company can, and should develop robust stochastic exploration portfolio predictions, production forecasts and portfolio models using more advanced tools.

AAPG Datapages/Search and Discovery Article #90259 ©2016 AAPG Annual Convention and Exhibition, Calgary, Alberta, Canada, June 19-22, 2016