10,323
edits
Changes
Jump to navigation
Jump to search
Line 54:
Line 54: − + + +
Risk: expected value and chance of success (view source)
Revision as of 21:31, 11 December 2013
, 21:31, 11 December 2013→Probability of completion
The probability of success and—by subtracting it from 1.0—its derived counterpart, the ''probability of failure,'' or ''P''<sub>f</sub>, are the expressions required to calculate the expected value of an exploratory drilling venture. A further modification is necessary for development wells and projects.
The probability of success and—by subtracting it from 1.0—its derived counterpart, the ''probability of failure,'' or ''P''<sub>f</sub>, are the expressions required to calculate the expected value of an exploratory drilling venture. A further modification is necessary for development wells and projects.
When compared with exploration drilling statistics, such as those reported annually by the AAPGs Committee on Statistics of Drilling (CSD), ''P''<sub>s</sub> was approximately equivalent to their definition of ''success,'' that is, that the subject well was completed and did produce some hydrocarbons. ''This does not mean that the venture was profitable.'' In fact, this definition of success contains at least four possible outcomes:
[[File:Charles-l-vavra-john-g-kaldi-robert-m-sneider capillary-pressure 5.jpg|thumbnail|'''Table 2.''' 1988 success rates, United States and Canada]]
When compared with exploration drilling statistics, such as those reported annually by the AAPG Committee on Statistics of Drilling (CSD), ''P''<sub>s</sub> was approximately equivalent to their definition of ''success,'' that is, that the subject well was completed and did produce some hydrocarbons. ''This does not mean that the venture was profitable.'' In fact, this definition of success contains at least four possible outcomes:
# The well was completed as the discovery well for a profitable exploratory project (a ''commercial success'').
# The well was completed as the discovery well for a profitable exploratory project (a ''commercial success'').
# The well was completed because anticipated future production would return a profit on the cost of completing and operating, but not on the full exploratory costs, which are thus viewed as ''sunk'' and not recoverable (an ''incremental success''). Ordinarily, no more wells would be drilled on the property by the operator, assuming that the well did not provide other new encouragement.
# The well was completed because anticipated future production would return a profit on the cost of completing and operating, but not on the full exploratory costs, which are thus viewed as ''sunk'' and not recoverable (an ''incremental success''). Ordinarily, no more wells would be drilled on the property by the operator, assuming that the well did not provide other new encouragement.