Exploration outcomes, both positive and negative, are statistical in nature. Despite this fundamental fact, many explorationists, managers, board members and shareholders continue to express surprise at exploration outcomes. Obviously, when a well is successful, everyone is a hero. But the truth is that more often than not, i.e. between 60-70 percent of the time on a global average, we do not obtain commercial success with our drilling campaigns. This is despite the best brains, the best technology and the best data available being employed. The aim of my talk is to lay out the fundamentals of how to design a portfolio of prospects/ wells and predict at which stage of the exploration campaign we can deliver 90 percent certainty of at least one success. I have found this approach much more useful to set up the right expectations so that when the negative results inevitably come in, no one is surprised and that more patience can be encouraged in an organization before eventual success. Having worked with many companies, I have seen much trauma where professionals are dismissed or teams reorganized based on incorrect understanding of the statistical nature of exploration outcomes. My talk will also emphasize that companies which want to have a sustainable E&P business should limit their prospects to a certain Chance of Success range that match their financing capabilities. If this is not done, it will be shown that the probability of company failure increases.
Exploration outcomes, both positive and negative, are statistical in nature. Despite this fundamental fact, many explorationists, managers, board members and shareholders continue to express surprise at exploration outcomes. Obviously, when a well is successful, everyone is a hero. But the truth is that more often than not, i.e. between 60-70 percent of the time on a global average, we do not obtain commercial success with our drilling campaigns. This is despite the best brains, the best technology and the best data available being employed. The aim of my talk is to lay out the fundamentals of how to design a portfolio of prospects/ wells and predict at which stage of the exploration campaign we can deliver 90 percent certainty of at least one success. I have found this approach much more useful to set up the right expectations so that when the negative results inevitably come in, no one is surprised and that more patience can be encouraged in an organization before eventual success. Having worked with many companies, I have seen much trauma where professionals are dismissed or teams reorganized based on incorrect understanding of the statistical nature of exploration outcomes. My talk will also emphasize that companies which want to have a sustainable E&P business should limit their prospects to a certain Chance of Success range that match their financing capabilities. If this is not done, it will be shown that the probability of company failure increases.
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