The application of VOI method to shape a strategy of additional exploration

Abstract

Background. An optimal exploration strategy creates a significant share in value of project on exploration stage. The paper describes an example of solving the following tasks: determining the feasibility of additional exploration drilling; evaluating the value of drilling of one or more exploration wells; determining the optimal placement for exploration wells and drilling order. Authors presenting the modification of VoI (Value of Information) method and its application. Materials and methods. Complex probabilistic models were created summarizing main uncertainties and limitations, both geological, technical and technological. At the first stage three equiprobable geological concepts were made. For each concept probabilistic geological modelling was proceeded and then realizations corresponding to values of reserves P10, P50, and P90 were selected. Further, detailed production forecasts and economic estimates were performed. The analysis used the well pad and the corresponding area for exploration drilling as a unit of calculation. In the article the authors introduced the concept of remaining uncertainty. Application of modified VoI method allowed to form ‘dynamic’ (i.e. depending on exploration wells drilling order) range of areas for additional exploration which provide the best decrease of remaining uncertainty. An additional exploration strategy has been formed, which includes the necessary and sufficient number of wells and their drilling order. A decision tree was created depending on the success or failure of each subsequent exploration well. Results. The use of the modified VoI approach made it possible to achieve the objectives and obtain economical estimates, all of which combined to facilitate the adoption of decisions. As a result, a program for two exploration well drilling was created which would reduce the uncertainty by 90% from its initial value. Conclusions: The adopted VoI method could be applied to fields at the stage of additional exploration as well as to fields at early exploration stage to develop an exploration drilling strategy.