COMPLEX TRAPS: A method for calculating the chance-weighted value outcomes for a prospect with multiple trap styles

Transcription

1 COMPLEX TRAPS: A method for calculating the chance-weighted value outcomes for a prospect with multiple trap styles Ray Young, Steven McIntyre, Mark A. McLane, David M. Cook, James A. MacKay, and James Gouveia Rose & Associates, LLP Houston, Texas AAPG Annual Meeting Calgary, Alberta June 2005

2 INTRODUCTION SIMPLE TRAP ANALYSIS COMPLEX TRAP ANALYSIS CONCLUSIONS

3 A P10 P MMBOE Chance Source 0.9 Timing/Migration 0.8 Reservoir 0.7 Closure 0.8 Containment 0.7 Pg = 0.28 A B Spill Point B

4 Complex Traps

5 Only Top Seal Required for Success Complex Traps

6 Complex Traps Top Seal and Fault Seal Required for Success

7 Complex Traps Fault A Fault B Top Seal and Fault A Seal Required Top Seal, Fault A Seal and Fault B Seal Required

8 Complex Traps Updip Seismically -Defined Reservoir Pinchout

9 Complex Traps Updip Top Seal and Fault Seal Required Seismically -Defined Reservoir Pinchout

10 Complex Traps Updip Top Seal, Fault Seal and Lateral Pinch-out Seal Required Seismically -Defined Reservoir Pinchout

11 Complex Traps Full-fold 3D Seismic Coverage 2D Seismic Lines

12 Complex Traps Pclosure High Full-fold 3D Seismic Coverage 2D Seismic Lines

13 Complex Traps Full-fold 3D Seismic Coverage Pclosure Low 2D Seismic Lines

14 Complex Traps 50 Fluvial or Overbank? Fluvial 0 Preservoir Lower Preservoir Higher 40

15 INTRODUCTION SIMPLE TRAP ANALYSIS COMPLEX TRAP ANALYSIS CONCLUSIONS

16 Simple Traps

17 Simple Traps Area, Acres P90

18 Simple Traps Area, Acres Avg. Net Pay, Ft. Rec. Yield, BAF P10 P90 x x =

19 Simple Traps Chance Source 0.9 Timing/Migration 0.8 Reservoir 0.8 Closure 0.9 Containment 0.6 Pg = 0.31 P1 P10 P50 P P99 RESOURCES, MMBOE

20 Simple Traps Pg = 0.31 P1 P10 P50 P P99 RESOURCES, MMBOE

21 Simple Traps Pg = 0.31 Pc = Pg x Pmcfs P1 P10 P50 P70 P P99 RESOURCES, MMBOE

22 Simple Traps Pg = 0.31 Commercial Distribution Pc = Pg x Pmcfs Pc = 0.31 x 0.70 Pc = 0.22 P1 P10 P50 P70 P P99 RESOURCES, MMBOE

23 Expected Value = Chance-weighted value of success + Chance-weighted value of failure EV = (Pc X PVc) + (Pf X PVf)

24 Expected Value = Chance-weighted value of success + Chance-weighted value of failure EV = (Pc X PVc) + (Pf X PVf) (Mean Resources X Oil Price) (Costs + Taxes)

25 Expected Value = Chance-weighted value of success + Chance-weighted value of failure EV = (Pc X PVc) + (Pf X PVf) 1-Pc

26 Expected Value = Chance-weighted value of success + Chance-weighted value of failure EV = (Pc X PVc) + (Pf X PVf) Net After-Tax Failure Cost

27 INTRODUCTION SIMPLE TRAP ANALYSIS COMPLEX TRAP ANALYSIS CONCLUSIONS

28 Complex Traps Options: Use Pg of the four-way closure

29 Complex Traps Options: Use Pg of the four-way closure Use Pg of the three-way closure

30 Complex Traps P50 Options: Use Pg of the four-way closure Use Pg of the three-way closure Use Pg of the prospect at P50 area

31 Complex Traps P50 Options: Use Pg of the four-way closure Use Pg of the three-way closure Use Pg of the prospect at P50 area Combine the chance-weighted resource of each of the trapping styles

32 For the following example, let s assume Reserves are proportional to Trap area and fill Complex Traps

33 TS: Top Seal = 0.80 P70 Complex Traps FS: Fault Seal = 0.50 P10 P10 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 Resources P50 P70 MCFS MMBOE original truncated PV / BOE P P P Mean

34 Complex Traps If the top & fault seals work; entire distribution is used P70 MCFS

35 Complex Traps If only the 4-way works, P70 of 1.5 MMBOE becomes the P1 If the top & fault seals work; entire distribution is used P70 MCFS

36 Complex Traps If only the 4-way works, P70 of 1.5 MMBOE becomes the P1 If the top & fault seals work; entire distribution is used P36 P70 P90 Apply MCFS MCFS

37 Complex Traps EV1 = (Pc)(Mean Tr. Res.)(PV/BOE) - (1-Pc)(PV Failure) (0.30)(0.90)(14.4)($3.25) - (0.73) ($4.00) = $ 9.70 MM EV2 = (Pc)(Mean Tr. Res.)(PV/BOE) (1-Pc)(PV Failure) (0.15)(0.90)(14.4)($3.25) - (0.865) ($4.00) = $2.86 MM Ignores: Variable Pg, variable PV/BOE, negative value outcomes

38 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 M, R & C Work TS Work FS Work TS Fails FS Fails 4-Way & Fault Trap Complex Traps P90 P50 P Commercial Failure Way Only P P P10 Commercial Failure M, R or C Failure Geologic Failure Geologic Failure

39 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 Probability Trunc. Res. MMBOE PV/BOE EV, $MM M, R & C Work

40 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 Probability Trunc. Res. MMBOE PV/BOE EV, $MM TS Work M, R & C Work

41 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 Probability Trunc. Res. MMBOE PV/BOE EV, $MM FS Work M, R & C Work TS Work

42 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 Truncations Probability Trunc. Res. MMBOE PV/BOE EV, $MM FS Work M, R & TS Work way only C Work

43 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 Truncations Probability Trunc. Res. MMBOE PV/BOE EV, $MM FS Work M, R & C Work TS Work way only P90 P50 P

44 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 Truncations Probability Trunc. Res. MMBOE PV/BOE EV, $MM M, R & C Work TS Work FS Work way only P90 P50 P

45 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 M, R & C Work TS Work FS Work Truncations 4-way & 0.9 fault trap way only P90 P50 P10 P90 P50 P Probability Trunc. Res. MMBOE PV/BOE EV, $MM Sum Math check: Probabilities sum to 1.00

46 M: Migration 0.9 R: Reservoir 0.6 C: Closure 0.7 TS: Top Seal 0.8 FS: Fault Seal 0.5 M, R & C Work TS Work FS Work Truncations 4-way & 0.9 fault trap way only P90 P50 P10 P90 P50 P Probability Trunc. Res. MMBOE PV/BOE EV, $MM Sum

47 CHANCE-WEIGHTED TRUNCATED MEAN RESOURCES Pc = 0.27 Pc = 0.19 Pc=0.135 MMBO

48 Complex Traps If only the 4-way works, P70 of 1.5 MMBOE becomes the P1 Amalgamated Complex Trap MCFS

49 Complex Traps 0% % chance CT element works 30% 70% 100% Productive area updip of first complex trap (CT) element at P70 of total trap area Area

50 INTRODUCTION SIMPLE TRAP ANALYSIS COMPLEX TRAP ANALYSIS CONCLUSIONS

51 CONCLUSIONS 1. A complex trap is any trap where the Pg varies across the prospect and hence the resource distribution

52 CONCLUSIONS 2. Using the higher Pg will overestimate the chance of success in a complex trap. Using the lower Pg will underestimate the chance of success. Using the Pg at the P50 area will reduce the error

53 CONCLUSIONS 3. The correct way to analyze a complex trap is to combine the chance weighted Distribution of each of the trapping styles. Failure to do this could have a profound effect on the estimated prospect value.

54 COMPLEX TRAPS: A method for calculating the chance-weighted value outcomes for a prospect with multiple trap styles Ray Young, Steven McIntyre, Mark A. McLane, David M. Cook, James A. MacKay, and James Gouveia Rose & Associates, LLP Houston, Texas AAPG Annual Meeting Calgary, Alberta June 2005