Better Decisions from Better Analysis - The Over-prediction of Prospect Volumes, Is it Optimism or Statistics?

The oil industry is renowned for over predicting pre-drill estimates for exploration prospects. Based on many years of experience the authors have drawn some interesting conclusions on the possible cause of this over prediction. The accepted approach to volumetric assessment through the use of complex statistical analysis may contribute considerably to this over-prediction. Subsequent to the technical evaluation the geoscientists are required to reflect their understanding of the subsurface as a set of discrete probability distributions. The final drill decision is often based on only a select few of the statistically derived parameters and not the entire distribution and the geoscientists “best guess” is under used. The effects of “model mixing” and the presence of outliers and long up-side tails influences the skew of the resultant distribution; the P50 and Mean values are now inherently over predictions and/or non geologically intuitive. Better decisions are made when both the decision-makers and gesoscientists alike have a full understand of both the statistically derived results, and more importantly the basic geological scenarios they are based on. The authors would like to present a number of reflections on this subject drawing some very useful and constructive conclusions aimed at ultimately improving exploration performance.