Changes

Accordingly, the ''expected value'' (EV) of any venture can be expressed as follows:

Accordingly, the ''expected value'' (EV) of any venture can be expressed as follows:

:<math>\ \text{EV} = \text{Probability}_\text{success} (\text{Project present value})~-~\text{Probability}_\text{failure} (\text{Cost of failure})</math>

:<math>\ \text{EV} = \text{Probability}_\text{success} (\text{Project present value})~-~</math><br><math>\text{Probability}_\text{failure} (\text{Cost of failure})</math>

==Expected value concept==

==Expected value concept==

# ''What is the probability (or confidence) that '''reservoir rock '''is present, of sufficient [[porosity]] and [[permeability]] to be productive, and in some minimal thickness and extent sufficient to contain detectable (i.e., measurable) quantities of mobile hydrocarbons, or to tempt a prudent onshore domestic operator to attempt a completion?''

# ''What is the probability (or confidence) that '''reservoir rock '''is present, of sufficient [[porosity]] and [[permeability]] to be productive, and in some minimal thickness and extent sufficient to contain detectable (i.e., measurable) quantities of mobile hydrocarbons, or to tempt a prudent onshore domestic operator to attempt a completion?''

#: One approach is to estimate the minimum required flow rate and relate this flow rate to thickness and [[permeability]]. In any case, what we seek is the geologist's confidence in the existence of at least a minimal reservoir—thickness, extent, [[porosity]], and effective [[permeability]]. Under this approach, encountering a wet, commercial-quality sandstone would not be a failure in the reservoir category, but rather in one of the other categories, such as an unexpected structural low, an absence of hydrocarbon charge, or a leaky trap. However, the presence of a 1-ft-thick tight siltstone where a 10-ft-thick porous sandstone objective had been predicted would be a reservoir failure!

#: One approach is to estimate the minimum required flow rate and relate this flow rate to thickness and [[permeability]]. In any case, what we seek is the geologist's confidence in the existence of at least a minimal reservoir—thickness, extent, [[porosity]], and effective [[permeability]]. Under this approach, encountering a wet, commercial-quality sandstone would not be a failure in the reservoir category, but rather in one of the other categories, such as an unexpected structural low, an absence of hydrocarbon charge, or a leaky trap. However, the presence of a 1-ft-thick tight siltstone where a 10-ft-thick porous sandstone objective had been predicted would be a reservoir failure!

# ''What is the probability (or confidence) that the '''geological structure '''of the reservoir objective is, in reality, essentially as represented on maps and cross sections?''

# ''What is the probability (or confidence) that the '''geological structure''' of the reservoir objective is, in reality, essentially as represented on maps and cross sections?''

#: It is important to note here that we do not require an actual "structure," such as a domal anticline or a fault closure, only that prospect maps and sections accurately depict the structural configuration. For example, if only regular monoclinal south dip is required in the case of a stratigraphic trap prospect, then the geologist should express confidence—as a probabilistic estimate—that the structure in the vicinity of the prospect actually is indeed regular monoclinal south dip.  

#: It is important to note here that we do not require an actual "structure," such as a domal anticline or a fault closure, only that prospect maps and sections accurately depict the structural configuration. For example, if only regular monoclinal south dip is required in the case of a stratigraphic trap prospect, then the geologist should express confidence—as a probabilistic estimate—that the structure in the vicinity of the prospect actually is indeed regular monoclinal south dip.  

#: If the map shows an antithetic fault closure, then what is the probability that such a structural configuration will actually turn out to be present?

#: If the map shows an antithetic fault closure, then what is the probability that such a structural configuration will actually turn out to be present?

#: This geological chance factor is formulated to apply to stratigraphic as well as structural traps, and in tacit acknowledgment that the structural map is ordinarily the single most important map involved in most prospects and many development projects. Also, structural "busts" are a common reason for dry holes<ref name=Rose_1987>Rose, P. R., 1987, [http://archives.datapages.com/data/bulletns/1986-87/data/pg/0071/0001/0000/0001.htm Dealing with risk and uncertainty in exploration--how can we improve?]: AAPG Bulletin, v. 71, n. 1, p. 1-16.</ref>.

#: This geological chance factor is formulated to apply to stratigraphic as well as structural traps, and in tacit acknowledgment that the structural map is ordinarily the single most important map involved in most prospects and many development projects. Also, structural "busts" are a common reason for dry holes.<ref name=Rose_1987>Rose, P. R., 1987, [http://archives.datapages.com/data/bulletns/1986-87/data/pg/0071/0001/0000/0001.htm Dealing with risk and uncertainty in exploration--how can we improve?]: AAPG Bulletin, v. 71, n. 1, p. 1-16.</ref>

#: The geological structure chance factor, in combination with the reservoir requirement, focuses on the geometry of the envisioned oil or gas accumulation and on the volumes of fluids necessary to sustain a production test or prudent drill stem test.

#: The geological structure chance factor, in combination with the reservoir requirement, focuses on the geometry of the envisioned oil or gas accumulation and on the volumes of fluids necessary to sustain a production test or prudent drill stem test.

# ''What is the probability (or confidence) that hydrocarbons are present in the subsurface geological environment such that the prospect has had access to them in some quantity to provide at least some modicum of '''hydrocarbon charge?'''''

# ''What is the probability (or confidence) that hydrocarbons are present in the subsurface geological environment such that the prospect has had access to them in some quantity to provide at least some modicum of '''hydrocarbon charge?'''''

#: This geological chance factor deals with such questions as the volumetric adequacy of petroleum source rocks, the generation of oil and/or gas, the migrational pathways to the site of the prospect, and the concentration of hydrocarbons in the reservoir fluid (hydrocarbon saturation of at least 50% is required). The question of timing is ''not'' addressed here. In most frontier basins, the hydrocarbon charge issue is very important. In established basins and producing trends, however, its significance tends to be slightly diminished. Obviously, for development projects, the hydrocarbon charge requirement has ordinarily been satisfied.

#: This geological chance factor deals with such questions as the volumetric adequacy of petroleum source rocks, the generation of oil and/or gas, the migrational pathways to the site of the prospect, and the concentration of hydrocarbons in the reservoir fluid (hydrocarbon saturation of at least 50% is required). The question of timing is ''not'' addressed here. In most frontier basins, the hydrocarbon charge issue is very important. In established basins and producing trends, however, its significance tends to be slightly diminished. Obviously, for development projects, the hydrocarbon charge requirement has ordinarily been satisfied.

# ''What is the probability (or confidence) that a '''sealed trap '''exists, based on the lithologic combinations and structural configurations depicted, and that the trapping configuration was already formed when hydrocarbons were migrating into the area of the prospect?''

# ''What is the probability (or confidence) that a '''sealed trap''' exists, based on the lithologic combinations and structural configurations depicted, and that the trapping configuration was already formed when hydrocarbons were migrating into the area of the prospect?''

#: Here we address three questions. First is the idea of the ''sealing capability'' between reservoir and top seals, seat seals, and lateral seals (whether formed by stratigraphic contrasts or sealing faults). Fluid viscosity, bed thickness, differential [[permeability]], and fault history all influence the seal question. The second question is about ''timing,'' as noted in item #3 above: if the trapping configuration came into being after migration occurred, then the gate has been shut only after the horse got out. The third question has to do with ''preservation'' from subsequent freshwater flushing or degradation of reservoired hydrocarbons. As used here, the term ''trap'' has no implications of geometry or configuration—only of containment and sealing. The troublesome issue of "fill-up" (best represented as a percentage) falls into this category. For most development wells, the sealed trap requirement has been satisfied.

#: Here we address three questions. First is the idea of the ''sealing capability'' between reservoir and top seals, seat seals, and lateral seals (whether formed by stratigraphic contrasts or sealing faults). Fluid viscosity, bed thickness, differential [[permeability]], and fault history all influence the seal question. The second question is about ''timing,'' as noted in item #3 above: if the trapping configuration came into being after migration occurred, then the gate has been shut only after the horse got out. The third question has to do with ''preservation'' from subsequent freshwater flushing or degradation of reservoired hydrocarbons. As used here, the term ''trap'' has no implications of geometry or configuration—only of containment and sealing. The troublesome issue of "fill-up" (best represented as a percentage) falls into this category. For most development wells, the sealed trap requirement has been satisfied.

{| class = "wikitable"

{| class = "wikitable"

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|+ {{table number|2}}1988 success rates, united states and Canada{{update after}}

|+ {{table number|2}}1988 success rates, United States and Canada{{update after}}

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! Well Class

! Well Class