PPA Intro,Risk - 1

2005 PetroSkills LLC, All Rights ReservedPPA - 1

Prospect and Play Prospect and Play AssessmentAssessment

Presented byPresented by

Dr. Michael I. TreeshDr. Michael I. TreeshPetroSkillsPetroSkills


Chapter 1 Chapter 1 -- IntroductionIntroduction


My Challenge to YouMy Challenge to YouRedefine our view of ourselvesRedefine our view of ourselvesBusiness man or woman with technical

expertiseFocus upon the business problem Focus upon the business problem to solveto solveApply technical expertise to solve

business problemsThis approach will define your This approach will define your strategies to exploration problemsstrategies to exploration problems

P. 1-1


Daily ScheduleDaily Schedule Day 1Day 1

Overview Risking Prospect volumetrics

Statistics Prospect guidesDay 2Day 2 Prospect exercise Prospect HC charge Other approaches

P. 1-2


Daily ScheduleDaily Schedule Day 3Day 3

Prospect workshop Summations Play assessment

Day 4Day 4 Play guides Play risking Play exercise

Day 5Day 5 Play maps Play workshop Selling your play Perspectives

P. 1-2


Course LogisticsCourse Logistics

Daily scheduleDaily scheduleHoursBreaksLunchLast dayMobile phones offMobile phones offToiletsToiletsEmergency evacuationEmergency evacuationContact Contact MikeMikes room numbers room number


PaperworkPaperwork

1.1. Did anyone bring payment for the Did anyone bring payment for the class?class? Contact me at the break

2.2. Complete yellow sheet by end of dayComplete yellow sheet by end of day Leave on your desk top

3.3. Registration formRegistration form Check your information and correct as

needed Provide your email address

4.4. Insert your business card in the Insert your business card in the holderholder


The Course Material The Course Material

ManualManualChaptersPage numbersGuides - Chapters 3 and 9References, glossaryExercises and answersCourse CDCourse CDPlease ask questions as they arisePlease ask questions as they arise


Introductions/ExpectationsIntroductions/Expectations

Your Job, Experience, Your Job, Experience, EducationEducationExperience with Assessment?Experience with Assessment? Team experience?Learning expectations from Learning expectations from this weekthis week

P. 1-3


Your knowledge Level Your knowledge Level prospects and playsprospects and plays

What is risk?What is risk?Define uncertainty?Define uncertainty?Contrast deterministic versus Contrast deterministic versus probabilistic reservesprobabilistic reservesWhat are playWhat are play--wide or dependent risks?wide or dependent risks?How are risked reserves best used?How are risked reserves best used?Define lognormal distribution of fieldsDefine lognormal distribution of fields

P. 1-3

SKILL AWARENESS BASIC ADVANCED MASTERY1. Principles of Geological Risk and Uncertainty

Describe the factors controlling technical risks and uncertainties of an exploration play, prospect or development opportunity

Assess risk factors governing the occurrence of a given investment opportunity. Identify those factors that are critical to the existence of the opportunity. Quantify uncertainties, report on the factors to achieve and overall risk/ uncertainty assessment

Propose methods to mitigate the assessed risks and reduce uncertainty. Make recommendations of activity based upon assessed and quantified risk/ uncertainty and geological insight into the potential of uncertainties.

Develop company-wide consistent measures to apply to risk and uncertainty assessment. Provide input into developing business strategies to minimize risk/uncertainty

2. Prospect Volume Calculation

Describe techniques of assessing trap volumes and calculating statistical ranges of expected volumes

Combine reservoir parameters to produce statistically correct assessment curve. Determine ranges of values for reservoir parameters, from multiple sources and ranges of uncertainty of each to combine for volumetric calculation.

Provide selection priorities for choices among prospects within organization. Review current and past evaluations to develop internal consistency in application.

a). Recognize a play as a group of prospects or leads sharing common controls (petroleum system)

Distinguish and characterize plays by controlling parameters geologic setting, economics, water depth, etc.

Prepare play summaries and maps. Classify multiple plays by their potential and use of analogues

b). Understand reserve distribution in a play

Predict number and size distribution of prospects in a play. Choose representative prospect(s) in which to test the play.

Apply lessons learned in play evaluation to other areas

Propose exploration strategies compatible with the business objective of the organization. Offer ranking of these opportunities based upon potential, risk, and organizational fit

c). Describe risks associated with finding a successful play

Calculate dependant (play-wide) risk factors that may prevent play success

Map distribution of critical play risks to prioritize play evaluation. Propose strategies to mitigate or further define play risk

3a,b,c. Play Analysis Principles, Techniques

P. 1-4

Propose methods to mitigate Propose methods to mitigate the assessed risks and the assessed risks and reduce uncertainty. Make reduce uncertainty. Make recommendations of activity recommendations of activity based upon assessed and based upon assessed and quantified risk/ uncertainty quantified risk/ uncertainty and geological insight into and geological insight into the potential of the potential of uncertainties.uncertainties.

Assess risk factors Assess risk factors governing the occurrence of governing the occurrence of a given investment a given investment opportunity. Identify those opportunity. Identify those factors that are critical to the factors that are critical to the existence of the opportunity. existence of the opportunity. Quantify uncertainties, Quantify uncertainties, report on the factors to report on the factors to achieve and overall risk/ achieve and overall risk/ uncertainty assessmentuncertainty assessment

Describe the factors Describe the factors controlling technical risks controlling technical risks and uncertainties of an and uncertainties of an exploration play, prospect or exploration play, prospect or development opportunitydevelopment opportunity

1. Principles of Geological Risk and Uncertainty

Provide selection priorities Provide selection priorities for choices among prospects for choices among prospects within organization. Review within organization. Review current and past evaluations current and past evaluations to develop internal to develop internal consistency in application.consistency in application.

Combine reservoir Combine reservoir parameters to produce parameters to produce statistically correct statistically correct assessment curve. Determine assessment curve. Determine ranges of values for reservoir ranges of values for reservoir parameters, from multiple parameters, from multiple sources and ranges of sources and ranges of uncertainty of each to uncertainty of each to combine for volumetric combine for volumetric calculation.calculation.

Describe techniques of Describe techniques of assessing trap volumes and assessing trap volumes and calculating statistical ranges calculating statistical ranges of expected volumesof expected volumes

2. Prospect Volume 2. Prospect Volume CalculationCalculation

Prepare play Prepare play summaries and maps. summaries and maps. Classify multiple plays Classify multiple plays by their potential and by their potential and use of analoguesuse of analogues

Distinguish and Distinguish and characterize plays by characterize plays by controlling controlling parameters parameters geologic geologic setting, economics, setting, economics, water depth, etc.water depth, etc.

Recognize a play as a Recognize a play as a group of prospects or group of prospects or leads sharing leads sharing common controls common controls (petroleum system)(petroleum system)

3a,b,c. Play Analysis 3a,b,c. Play Analysis Principles, Principles, TechniquesTechniques

Apply lessons Apply lessons learned in play learned in play evaluation to other evaluation to other areasareas

Predict number and Predict number and size distribution of size distribution of prospects in a play. prospects in a play. Choose representative Choose representative prospect(s) in which prospect(s) in which to test the play.to test the play.

b). Understand b). Understand reserve distribution in reserve distribution in a playa play


Map distribution of Map distribution of critical play risks to critical play risks to prioritize play prioritize play evaluation. Propose evaluation. Propose strategies to mitigate strategies to mitigate or further define play or further define play riskrisk

Calculate dependant Calculate dependant (play(play--wide) risk wide) risk factors that may factors that may prevent play successprevent play success

c). Describe risks c). Describe risks associated with associated with finding a successful finding a successful playplay



Course ObjectivesCourse ObjectivesBest available assessment methodsBest available assessment methods Trap volumetrics and HC charge for prospects Potential field number and size for playsQuantify all geologic risks/uncertaintiesQuantify all geologic risks/uncertaintiesForms, guides for making judgmentsForms, guides for making judgmentsInsights for:Insights for:

1. Assessing assessments2. Avoiding pitfalls3. Highgrading exploration opportunities4. Planning selectively P. 1-5


Course ObjectivesCourse Objectives

Provide knowledge and unique Provide knowledge and unique toolstools Pre-drill assessment of potentially recoverable oil

and gas volumesExploration prospects and playsProbability of occurrence of prospect or playFocus on geologic concepts for Focus on geologic concepts for assessmentassessment P. 1-5


Uses of AssessmentsUses of Assessments

Guide exploration by ranking Guide exploration by ranking opportunities (risk vs. potential)opportunities (risk vs. potential)Base for economic analysesBase for economic analysesLongLong--range planning range planning (technologic and capital needs)(technologic and capital needs)DiscoveryDiscovery--rate and supply rate and supply forecastsforecasts P. 1-6


Perspective on AssessmentsPerspective on Assessments

We will usually be wrong on details We will usually be wrong on details of individual assessments of individual assessments Unless we predict 1.0 or 0 for the Unless we predict 1.0 or 0 for the existenceexistence of an individual factor, we of an individual factor, we will will alwaysalways be wrongbe wrongSuccessful assessmentsSuccessful assessments

reserves found = average reserves found = average expectationsexpectations P. 1-6


Chapter 2 Prospect AssessmentChapter 2 Prospect Assessment

Tools:Tools:RiskingProbability distributionMonte Carlo techniquesAssessment curvesGeostatisticsMappingMaking choices


DefinitionsDefinitions

LeadLead potential prospect potential prospect lacks a key controlling factorlacks a key controlling factorProspectProspect potential oil or potential oil or gas fieldgas fieldPlayPlay group of geologicallygroup of geologically--related prospects with similar related prospects with similar petroleum systempetroleum system P. 2-2


Assessment TechniquesAssessment Techniques

ProspectsProspectsTrap volumeTrap volumeHC charge HC charge volumesvolumesHC fillHC fillRisk Risk AssessmentAssessment

PlaysPlaysSummation of Summation of prospectsprospectsField numbers & Field numbers & sizessizesRisk Risk AssessmentAssessment

P. 2-2


Objective Assessment MethodsObjective Assessment Methods

BasinsBasinsSummation of Summation of playsplaysSediment Sediment volumes and volumes and yieldsyields

RegionsRegionsSummation of Summation of basinsbasinsLifeLife--cycle cycle projectionsprojectionsDiscoveryDiscovery--rate rate extrapolationsextrapolationsEconometric Econometric

modelsmodelsP. 2-2

SEDIMENTARY BASIN

PETROLEUM SYSTEM

PLAY

PROSPECT

Economics VERY

Important

Economics NOT

Important

P. 2-3


Play and Prospect AssessmentPlay and Prospect Assessment

ID Task Name Duration1 ESTABLISHING STANDARDS 0.5 days10 PLAY ASSESSMEMENT 11.5 days11 PLAY RISK ASSESSMENT 7.5 days

16 PLAY VOLUMETRICS 4 days

19 PROSPECT ASSESSMENT 3 days20 PROSPECT RISK ANALYSIS 1 day

87 VOLUMETRICS 1 day

107 ECONOMIC ANALYSIS 1 day

110 POST-DRILL REVIEW 1 day

W T F S S M T W T F S S M T W T F SFeb 23, '03 Mar 2, '03

P. 2-3


Typical exploration workflowsTypical exploration workflows

1.1. Map the critical prospect factorsMap the critical prospect factors(trap type and size, reservoir presence, porosity, source

capability, drive mechanism, recoverability, etc)2.2. Select ranges for factors that describe Select ranges for factors that describe

prospect conditionsprospect conditions3.3. Combine factors to derive an assessment Combine factors to derive an assessment

curvecurveDescribes sizes that can occur given local conditions

4.4. Perform a risk assessment on the projectPerform a risk assessment on the project

Mean = 50.00

25.00 37.50 50.00 62.50 75.00

Effective thickness

TRAP, SEAL, TIMING 0.72Closure volume 0.8Seal - top.lateral,no serious leakage by faults or fractures 0.9Timing - Relative to migration 1

RESERVOIR, POROSITY, PERMEABILITY 0.8Adequate reservoir thickness 0.8Porosity 1Permeability, Continuity 1

SOURCE, MATURATION, MIGRATION 0.9Organic quantity/quality 1Maturation (adequate time, temperature, pressure) 1Migration (primary, secondary, source to trap) 0.9

PRESERVATION, HC QUALITY, RECOVERY 1Preservation (no bad flushing, biodegradation) 1HC Quality and concentration 1Recovery (drive, pressure, depth) 1


2 Key Questions2 Key Questions

Is an Oil or Gas field presentIs an Oil or Gas field present??What is probability?

What is itWhat is its sizes size??Most likely amountRange of reserves expected

Risk Assessment

Volumetrics

P. 2-5


Prospect AssessmentProspect Assessment

SuccessSuccess -- meeting or exceeding meeting or exceeding minimum economic sizeminimum economic sizeSteps in assessment process Steps in assessment process

1. Define minimum economic size2. Select ranges for individual factors3. Combine factors to derive

assessment curve4. Estimate adequacy of achieving

minimum economic size

P. 2-5


Two issues in risk assessmentTwo issues in risk assessment

To what does the risk refer? To what does the risk refer? The risk of what potential future

event?How is the risk of each How is the risk of each individual factor quantified?individual factor quantified?


Risk of what? Risk of what? The possibilitiesThe possibilities1.1. Geological successGeological success? ? Consistent through time Not a measure of the economic viability of the

prospectPresence of an oil and/or gas Presence of an oil and/or gas accumulation (producible accumulation (producible hydrocarbons)hydrocarbons)? ?

Focuses on finding hydrocarbons, but not an economic accumulation

An economically successful An economically successful accumulationaccumulation? ?

Better business/economic measure But, threshold size can vary with time and

location


Arguments against minimum economicsArguments against minimum economics

How do explorationists know how How do explorationists know how much of a factor will give an much of a factor will give an economically viable field? economically viable field? The economics can change rapidlyThe economics can change rapidlyMakes choices and risk analyses

ineffective With our experienced With our experienced explorationists, we do not need this explorationists, we do not need this extra stepextra step

P. 2-9


Economic minimum Economic minimum -- AdvantagesAdvantages

Ties explorationists to business Ties explorationists to business drivers of the organizationdrivers of the organizationPrevents spending time on Prevents spending time on uneconomic businessuneconomic businessMaximizes efficiency Maximizes efficiency Enables explorationists to Enables explorationists to become better business peoplebecome better business people


Economic minimum Economic minimum -- StepsSteps

1.1. Gather data Gather data -- the factors:the factors:Oil and gas prices expectedDevelopment costsInfrastructure costs (pipelines, facilities, platforms, etc.)Production costsProduction timing

2.2. Combine to establish thresholdCombine to establish threshold3.3. Measure the probability of success against a Measure the probability of success against a

standardstandard

So we know what to So we know what to risk.risk.

How is the chance of How is the chance of success measured?success measured?


How to measure riskHow to measure risk

Establish a standard throughout the Establish a standard throughout the organizationorganizationAssessments can be compared on the same basisConsistent through time

Compatible with:Compatible with:Business processes, language, comfort for risk, and

culture Implement training that includes practice in Implement training that includes practice in making consistent assessmentsmaking consistent assessmentsProspect postProspect post--mortems to define risking mortems to define risking successsuccess


2 Key Questions2 Key Questions

Is an Oil or Gas field presentIs an Oil or Gas field present??What is probability?

What is itWhat is its sizes size??Most likely amountRange of reserves expected

Risk Assessment

Volumetrics




1. Define minimum economic size2. Select ranges for individual factors3. Combine factors to derive

assessment curve4. Estimate adequacy of achieving

minimum economic size

P. 2-5


1. Define Minimum Economic Size1. Define Minimum Economic Size

Define the minimum field size Define the minimum field size determined to be economic in playdetermined to be economic in playInteractive process in companyInteractive process in companyFactorsFactors to be consideredto be consideredOil and gas prices expectedDevelopment costsInfrastructure costsProduction costsProduction timing

P. 2-9




1.1.1. Define minimum economic sizeDefine minimum economic sizeDefine minimum economic size2.2.2. Select ranges for individual factorsSelect ranges for individual factorsSelect ranges for individual factors3.3.3. Combine factors to derive assessment Combine factors to derive assessment Combine factors to derive assessment

curvecurvecurve4. Estimate adequacy of achieving

minimum economic size P. 2-4


Are any commercial Are any commercial O & G fields presentO & G fields present??

Risk AssessmentRisk AssessmentP. 2-6

Propose methods to mitigate the Propose methods to mitigate the assessed risks and reduce assessed risks and reduce uncertainty. Make uncertainty. Make recommendations of activity recommendations of activity based upon assessed and based upon assessed and quantified risk/ uncertainty and quantified risk/ uncertainty and geological insight into the geological insight into the potential of uncertainties.potential of uncertainties.

Assess risk factors governing the Assess risk factors governing the occurrence of a given investment occurrence of a given investment opportunity. Identify those factors opportunity. Identify those factors that are critical to the existence of that are critical to the existence of the opportunity. Quantify the opportunity. Quantify uncertainties, report on the uncertainties, report on the factors to achieve and overall risk/ factors to achieve and overall risk/ uncertainty assessmentuncertainty assessment

Describe the factors controlling Describe the factors controlling technical risks and uncertainties technical risks and uncertainties of an exploration play, prospect or of an exploration play, prospect or development opportunitydevelopment opportunity

1. Principles of Geological Risk and Uncertainty

P. 2-6


Exercise - Geologic Risk-Factors

The first and most crucial step in assessment is to have a firm understanding of the geologic factors controlling oil and gas occurrence. These control factors, if inadequate or missing at the prospect or play being assessed, become the geologic risks that deny success. List below all the factors that you can think of that are essential to the geologic creation of an oil or gas field having significant potentially recoverable reserves. You may choose to list more than 10. 1.

2.

3.

4.

5.

6.

P. 2-7

10 minute exercise with your partner


AnswersAnswers

ReservoirReservoirPorosityPorosityPermeabilityPermeabilityContinuityContinuityClosureClosureSealSealTimingTimingVolumeVolume

SourceSourceMigrationMigrationMaturityMaturityPreservationPreservationOrganic Organic quantity/qualityquantity/qualityRecoverabilityRecoverabilityEtc.Etc.


Any fields present?Any fields present?

Based upon adequacy of Based upon adequacy of basic controls:basic controls:Sealed Trap Reservoir SourceRecoverabilityPrediction of probability of Prediction of probability of Prediction of probability of meeting minimum meeting minimum meeting minimum economic limiteconomic limiteconomic limit

P. 2-8


Risk analysis FormRisk analysis FormTRAP, SEAL, TIMING

Closure volumeSeal - top, lateral,no serious leakage by faults or fracturesTiming - Relative to migration

RESERVOIR, POROSITY, PERMEABILITYAdequate reservoir thicknessPorosityPermeability, Continuity

SOURCE, MATURATION, MIGRATIONOrganic quantity/qualityMaturation (adequate time, temperature, pressure)Migration (primary, secondary, source to trap)

PRESERVATION, HC QUALITY, RECOVERYPreservation (no bad flushing, biodegradation)HC Quality and concentrationRecovery (drive, pressure, depth)

P. 2-8


Critical Element in RiskingCritical Element in Risking

Risk of What?Risk of What?


Any fields present?Any fields present?

Based upon adequacy of Based upon adequacy of Based upon adequacy of basic controls:basic controls:basic controls:Sealed Trap Sealed Trap Sealed Trap Reservoir Reservoir Reservoir SourceSourceSourceRecoverabilityRecoverabilityRecoverabilityPrediction of probability of Prediction of probability of meeting minimum economic meeting minimum economic limitlimit P. 2-8


1. Define Minimum Economic Size1. Define Minimum Economic Size

Define the minimum field size Define the minimum field size determined to be economic in playdetermined to be economic in playInteractive process in companyInteractive process in companyFactorsFactors to be consideredto be consideredOil and gas prices expectedDevelopment costsInfrastructure costsProduction costsProduction timing P. 2-9

Sieve - Size = 5 MMBO

All possible prospects

Prospect too small are lostEconomic prospects saved

P. 2-10


Types of Exploration RisksTypes of Exploration Risks

Geologic existence risksGeologic existence risksFinding risksFinding risksEconomic risksEconomic risksEnvironmental risksEnvironmental risksPolitical risksPolitical risks

P. 2-10


Uncertainty and RiskUncertainty and RiskUncertaintyUncertainty -- imprecision in estimating the size imprecision in estimating the size range of factorsrange of factorsRelates measures of volumetric factors

ProbabilityProbability -- the likelihood of an eventthe likelihood of an eventnumber from 0 through 1 (a fraction) that represents the

chance or likelihood that an event will occurRiskRisk -- the probability of an event (ex. presence of the probability of an event (ex. presence of reservoir)reservoir)Always stated as risk of ..This course - relates to minimum required for an economic

accumulationAdequacyAdequacy (Chance of Success)(Chance of Success) -- one minus riskone minus risk

P. 2-10


Chance of AdequacyChance of Adequacy(1(1-- Risk)Risk)Used for individual factors or combined for Used for individual factors or combined for entire accumulationentire accumulationAdequacy of prospect or play equals Adequacy of prospect or play equals productproduct of individual control factors:of individual control factors:Sealed Trap, Reservoir, Source,

RecoverabilityAdequacy of Adequacy of minimum economic minimum economic accumulationaccumulation notnot presence or absencepresence or absence

P. 2-11


Risk analysis FormRisk analysis FormTRAP, SEAL, TIMING

Closure volume 1Seal - top.lateral,no serious leakage by faults or fractures 1Timing - Relative to migration 1

RESERVOIR, POROSITY, PERMEABILITYAdequate reservoir thickness 0.8Porosity 1Permeability, Continuity 1

SOURCE, MATURATION, MIGRATIONOrganic quantity/quality 1Maturation (adequate time, temperature, pressure) 1Migration (primary, secondary, source to trap) 0.8

PRESERVATION, HC QUALITY, RECOVERYPreservation (no bad flushing, bidegradation) 1HC Quality and concentration 1Recovery (drive, pressure, depth) 1

P. 2-12


Risking GuidelinesRisking Guidelines

1.01.0 CertainCertain 0.70.7 LikelyLikely 0.5 0.5 Equally likely/unlikelyEqually likely/unlikely 0.30.3 UnlikelyUnlikely 00 ImpossibleImpossible Used for Used for individual controlsindividual controls or combined or combined

for a for a prospect or playprospect or play likelihoodlikelihood

P. 2-12


Another Qualitative ScaleAnother Qualitative ScaleJones and Hillis, 2003Jones and Hillis, 2003

P. 2-13

*Meyer and Brooker, 1991; Watson, 1998.

98-100%90-98%75-90%60-75%

40-60%

20-40%

2-20%

0-2%

Proven; definitely trueVirtually certain; convincedHighly probably; strongly believe; highly likelyLikely; probably true; about twice as likely to be true as untrue; chances are

goodChances are about even, or slightly better than even or slightly less than

evenCould be true but more probably not; unlikely; chances are fairly poor;

two or three time more likely to be untrue than truePossible but very doubtful; only a slight chance; very unlikely indeed; very

improbableProven untrue; impossible

Sherman-Kent Scale for Eliciting and Quantifying Confidence Judgments*


Risking ComparisonRisking Comparison

P. 2-13Otis and Schneiderman, 1997Otis and Schneiderman, 1997

Unfavorable0 Non-existent

Questionable0.3Unlikely

Neutral0.5Equally likely/unlikely

Encouraging0.7Likely

1.0 0.7 Favorable1.0Certain

ChevronScaleThis Course


Risk levels, Risk levels, Rose, 1992Rose, 1992

P. 2-14

P

R

O

B

A

B

I

L

I

T

Y

S

C

A

L

E

1.0.9.8.7.6.5.4.3.2.10

(WILL OCCUR)

VIRTUAL CERTAINTY

REASONABLE GEOLOGIC CONFIDENCE

50/50 CHANCE

SIGNIFICANTUNCERTAINTY

ONLY A MODERATE CHANCE

HIGH-RISK GEOLOGIC FACTOR

(WONT OCCUR)

P

R

O

B

A

B

I

L

I

T

Y

S

C

A

L

E

1.0.9.8.7.6.5.4.3.2.10

(WILL OCCUR)

VIRTUAL CERTAINTY

REASONABLE GEOLOGIC CONFIDENCE

50/50 CHANCE

SIGNIFICANTUNCERTAINTY

ONLY A MODERATE CHANCE

HIGH-RISK GEOLOGIC FACTOR

(WONT OCCUR)


Seal ClassificationSeal ClassificationJones and Hillis, 2003Jones and Hillis, 2003

P. 2-14


Risking seal capacityRisking seal capacityJones and Hillis, 2003Jones and Hillis, 2003

P. 2-15

Fault Throw(m, ft)

Sedimentary Architecture(facies stacking geometry)

No DataNo Data

No DataFault-Zone Architecture

(single/multiple slip plane)

Offset well coreFacies variability/uncertainty

High-resolution seismic dataGood prospect coverage

Full Data Set(Data quality/control is excellent)

No Data

0 0.2 0.4 0.6 0.8 1

Figure 2-3.

From: Otis & Schneiderman, 1997

P. 2-`16shale sandstone

Critical Moment

OilWindow

DeltaicSands & Shales

Marine Shale

Neoc. Early Late Pal. Eoc. Olig. Mic. PlNeogenePaleogene

TertiaryCretaceous

(Ma)

Prospect:Country:

Source Rock

Reservoir Rock

Seal Rock

Trap Formation

Generation/Mig.

Preservation

120 100 80 60 40 20 0

DeltaicSands & Shales

Rules of ThumbRules of ThumbOtis & Schneiderman, 1997Otis & Schneiderman, 1997

P. 2-170.500.50 0.250.25 0.120.12 0.060.06

Same Play Adjacent Structure

Same Play Nearby Structure

New Play Same Trend Old Play New Trend

New Play New Basin or Play with Negative Data

Producing Area Emerging Area Frontier Area

Delineation Prospect Play Hydrocarbon System

VERYLOWRISK

LOWRISK

MODERATERISK

HIGHRISK

VERYHIGHRISK

Evaluation Conventional Frontier

Avg. Pg=0.75 Avg. Pg=0.375 Avg. Pg=0.183 Avg. Pg=0.092 Avg. Pg=0.05

Pg=Probability of Geological Success


Geostatistics and Risk Geostatistics and Risk AssessmentAssessment

SimulationSimulation

after Wolfe et al. (1994)

P. 2-20

P. 2-21

P. 2-22


P. 2-23

Sand Distribution

0

5

10

15

20

25

30

9 18 27 36 45 54 63 72 81 90

Economic Threshold 40'

35%35% 65%65%

P. 2-25


Sand Distribution

0

5

10

15

20

25

30

9 18 27 36 45 54 63 72 81 90

Economic Threshold 40'

35% 35% -- failurefailure 65% 65% -- successsuccessThe modeled probability of success is 0.65

Geostatistical ApproachGeostatistical Approach

100 trials to 100 trials to predict predict

thicknessthickness

P. 2-25


Prospect Probability of SuccessProspect Probability of Success

0.33

1.00Recovery (drive, pressure, depth)

1.00HC Quality and concentration

1.00Preservation (no flushing, biodegradation)

1PRESERVATION, HC QUALITY, RECOVERY

1.00Migration (primary, secondary, source to trap)

0.70Maturation (adequate time, temperature, pressure)

0.90Organic quantity/quality

0.63SOURCE, MATURATION, MIGRATION

1.00Permeability, Continuity

1.00Porosity

0.65Adequate reservoir thickness

0.65RESERVOIR, POROSITY, PERMEABILITY

0.80Timing - Relative to migration

1.00Seal - top, lateral, no serious leakage by faults or fractures

1.00Closure volume

0.8TRAP, SEAL, TIMING

This means that this prospect has a 33/100 chance to contain at least the minimum economics


Handling UncertaintyHandling Uncertainty

Engineers missed range for 2/3 of Engineers missed range for 2/3 of questionsquestionsNo difference for PNo difference for P3030 and Pand P9090 rangesrangesPeople prouder of answers than data People prouder of answers than data would indicatewould indicateMost donMost dont widen ranges even when t widen ranges even when indicatedindicatedProblem can be costlyProblem can be costly P. 2-26


Handling Uncertainty Handling Uncertainty -- SolutionsSolutions

Understanding the objectives of Understanding the objectives of assessmentassessmentBetter knowledge Better knowledge -- better rangesbetter rangesTraining in predictionsTraining in predictionsUsing two rangesUsing two rangesProbability yes, Probability noLognormal or normal distribution?Lognormal or normal distribution?Do more researchDo more research P. 2-26




1.1.1. Define minimum economic sizeDefine minimum economic sizeDefine minimum economic size2.2.2. Select ranges for individual factorsSelect ranges for individual factorsSelect ranges for individual factors3.3.3. Combine factors to derive assessment Combine factors to derive assessment Combine factors to derive assessment

curvecurvecurve4. Estimate adequacy of achieving minimum

economic size P. 2-4

PPA Intro,Risk - 1

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