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Line 26: − − Newendorp (1975)<ref name=Newendorp_1975>Newendorp, P. D., 1975, Decision analysis for petroleum exploration: Tulsa, OK, PennWell Books, 668 p.</ref> presents the subject of expected value very thoroughly for the reader who wishes additional background.
Risk: expected value and chance of success (view source)
Revision as of 17:46, 11 December 2013
, 17:46, 11 December 2013→Expected value concept
In exploratory ventures, cost of failure usually includes dry hole cost, cost of lease bonuses of the condemned leases, and some G & G costs. For development ventures, some substantial additional capital investments may also occur, plus expense items that will have to be written off as well—expenditures that were needed to determine the viability of the project, such as several completed wells, equipment, materials, and supplies.
In exploratory ventures, cost of failure usually includes dry hole cost, cost of lease bonuses of the condemned leases, and some G & G costs. For development ventures, some substantial additional capital investments may also occur, plus expense items that will have to be written off as well—expenditures that were needed to determine the viability of the project, such as several completed wells, equipment, materials, and supplies.
==Probability of geological success==
==Probability of geological success==