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The AAPG/Datapages Combined Publications Database
Houston Geological Society Bulletin
Abstract
Abstract: Application of Basin Analysis To Exploration-Strategy
Evaluation
By
Cities Service Company has developed a model to test
different exploration strategies available to the company. This
tool does not make decisions - it cannot, for example, set
goals, suggest strategies, or weigh the compromises resulting
from available alternatives. It can show how different
strategies affect profitability, reserve additions, production
rate, and risk. Cities' Southwest Region initiated the project, and the
first study area was the Permian Basin of West Texas and
Southeast New Mexico. Two major subdivisions of the project
were: (1) Preparation of an environmental data base to
describe the Permian Basin. (The data base includes forecast
of future discoveries, estimated costs, etc.) (2) Model
development. (The computer model uses a network approach
to simulate exploration outcomes, and thereby provides the means to pre-test available strategies.)
Exploration is a business fraught with uncertainty. In
dealing with this uncertainty, companies pursue widely
different strategies. Is there a "best" strategy? Can a single
strategy mix minimize risk and maximize expected return for a
company? The answers certainly depend on the company's objectives and available resources and on the exploration
environment as well. Analysis of these elements via computer
simulation may lead to better response to an uncertain
environment.
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