This paper demonstrates how reserves probability distributions can be used to develop net present value (NPV) distributions. NPV probability distributions were developed from the rate and reserves distributions presented in SPE 28333. This real data study used practicing engineer's evaluations of production histories. Two approaches were examined to quantify portfolio risk. The first approach, the NPV Relative Risk Plot, compares the mean NPV with the NPV relative risk ratio for the portfolio. The relative risk ratio is the NPV standard deviation (σ) divided the mean (μ) NPV. The second approach, a Risk - Return Plot, is a plot of the μ discounted cash flow rate of return (DCFROR) versus the σ for the

DCFROR distribution. This plot provides a risk - return relationship for comparing various portfolios. These methods may help evaluate property acquisition and divestiture alternatives and assess the relative risk of a suite of wells or fields for bank loans.

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