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A New Method for Assessing the Impact of Exploration Prospect Interdependency


Van Wees, J.D., H. Mijnlieff, J. Lutgert, J. Breunese, C. Bos, TNO, Utrecht, Netherlands


Prospect interdependencies, if present and positively correlated, result in a higher stan­dard deviation of the portfolio’s volumetric expectation curve, compared to a portfolio with independent prospects. The wider uncertainty range offers options for companies to increase the expected monetary value (EMV) of the exploration portfolio. In order to inves­tigate these effects on exploration portfolios, a methodology has been developed for mod­elling these dependencies spatially, and updating them in time as new information is acquired. The methodology integrates Bayesian Belief Network techniques in a stochastic exploration business process simulator. Applying this methodology to the Netherlands gas portfolio, clearly demonstrates an increase in the range and of the expected recoverable vol­ume of the exploration portfolio. Proper tuning of the exploration strategy, using an efficient frontier approach, and regular updating of the portfolio’s economic forecasts, increases the probability of realizing the upside at minimum risk, when compared to independent prospect portfolios. The staged decision strategy and the value of information underlying the gradual increase of EMV can also be calculated and visualized through decision tree analysis tech­niques which have been developed as a complementary tool to the stochastic exporation simulator.