The use of expected monetary values in the reappraisal of mature petroleum provinces

Conference · Thu Aug 01 04:00:00 EDT 1991 · AAPG Bulletin (American Association of Petroleum Geologists); (United States)

OSTI ID:5682333

Fuller, D M ^[1]

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1. Univ. of Denver, CO (United States)

Mature petroleum provinces offer a wealth of statistical data which can be used by geologists, managers, and investors to guide their exploration efforts. The Expected Monetary Value (EMV) concept, familiar to statisticians and economists, can be applied to these data to determine which areas offer the most attractive exploration economics. Traditionally the EMV concept has been used to evaluate individual prospects. This paper illustrates, through example, how the concept can be extended to evaluate and compare entire producing areas. The EMV concept, based on probability theory, allows geologists to make decisions supported by statistical evidence rather than subjective judgment. The concept integrates a variety of parameters including success ratios, drilling costs, and field size to derive an index of expected profitability. This index estimates the returns one should expect from repeated drilling efforts in a given area (township, county, basin, etc.). To illustrate how this technique can be used, the State of Kansas was divided into seven areas based on petroleum geological characteristics. Required statistical attributes were determined for each area based on the last 20 years of exploration. Then the area were analyzed using an EMV approach to determine which offered the best exploration economics. Results indicate that the Hugoton embayment province should yield the highest monetary gains after repeated drilling efforts. This technique, used over time, will guide geologists to the most profitable portions of mature producing areas.

• OSTI ID: 5682333
• Report Number(s): CONF-9109239--
• Conference Information: Journal Name: AAPG Bulletin (American Association of Petroleum Geologists); (United States) Journal Volume: 75:8
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020200* -- Petroleum-- Reserves
Geology
& Exploration
COST BENEFIT ANALYSIS
DATA
DECISION MAKING
DEVELOPED COUNTRIES
ECONOMIC ANALYSIS
ECONOMICS
EXPLORATION
FEDERAL REGION VII
GEOLOGIC DEPOSITS
INFORMATION
KANSAS
MATHEMATICAL MODELS
MINERAL RESOURCES
NORTH AMERICA
NUMERICAL DATA
OIL FIELDS
PETROLEUM DEPOSITS
RESOURCES
STATISTICAL DATA
STATISTICAL MODELS
USA