Abstract
Two common challenges in the appraisal of deeper prospects in deepwater are, the selection of the overall strategy -campaign or sequential, and justification of any individual activity in this high cost environment. Both require objective assessment of the Value of Information.
When dealing with multiple adjoining prospects, which not only have subsurface dependencies in their uncertainty characterization, but also dependent development concepts, the value of appraisal appears to be intuitively high. However, quantifying such VOI is extremely challenging since the different combinations of subsurface realizations and development scenarios propagate into millions of economic realizations. Furthermore, the time and effort needed to update the analysis for new information is nearly as great as for the first complete iteration.
Traditionally such a problem would be solved using three branches for volume uncertainty (Low, Mid, High) for each of the prospects; details are lost in the analysis that may result in the VOI being non-representative. This paper presents a methodology that samples the probability density function more exhaustively but does so very efficiently w.r.t calculation overhead. A two-pronged approach is adopted:
Defining a nearly exhaustive range of the discrete combinations of subsurface volumes from different prospects, then "binning" these possibilities in volume to create a representation of the frequency distribution.
Recursively pre-calculating the economic simulations for numerous combinations of bins of volumes for different development concepts / strategy
This methodology enables studying the problem in much greater detail and also decreases the turnaround time to update the expected economic value and VOI as new data is gathered and other insights are gained. The probability density function can be quickly updated when only the probabilities change while the realizations and scenarios remain unaffected.
This paper demonstrates the application of the above approach in evaluating appraisal VOI for a set of adjoining prospects in deepwater Gulf of Mexico that are both geologically dependent and share potential development synergies.
