ABSTRACT

A partially explored basin can in trying economic times such as the present, experience a slowdown in activity, leaving the state, industry, and all concerned questioning whether undiscovered fields remain in the basin of sufficient size and quantity to justify further exploration. Questions that need to be answered concern the finding costs, development costs, and ultimate profitability associated with potential discoveries.

A discovery-process model was used to answer these questions by analyzing the Black Warrior basin of Mississippi for the number and size distribution of undiscovered natural gas fields. An economic analysis then detailed costs and ultimate profitability of their development. Extensive historical data from the basin was analyzed and the log-normal distribution of fields was categorized into nine class-sizes. The Drew\Schuenemeyer discovery-process model predicted 43 undiscovered fields in class-sizes with economical potential for development having 150 BCF of gas reserves. The model predicted 300 exploratory wells could be drilled in the basin with expectations of attractive profitabilities from field discoveries. Rates of return were calculated for four gas price scenarios, and the conditions for profitable development of the undiscovered fields were determined.

By using the method in any partially explored basin, one can foresee the economic justification for further exploratory drilling and foresee economic benefits from eventual production of the potential fields. This method is the most thorough and informative technique that can be applied to a basin having the potential of additional gas field discoveries. As exploration becomes more selective, this technique could become a valuable tool to many exploration programs.