WS10 A03

A method for estimating yet-to-find in

hydrocarbon plays based on historical results of
exploration 
D. Quirk* (Manx Geological Survey)

Summary

The  background  and  description  of  method  for  calculating,  reporting    and  checking  yet‐to‐find  petroleum 
resources. 

79th EAGE Conference & Exhibition 2017 – Workshop Programme

Paris, France, 12-15 June 2017
Introduction

Play analysis is really an academic exercise if the value of exploring in the region of interest is not
considered. In this regard, a logical step is to predict the undiscovered resources that may be present
within parts of the play, an estimation known as yet-to-find (YTF).

YTF has a number of important functions which include:

1) focusing teams on the geological elements with the most effect on exploration success;
2) integrating historical information on risk and uncertainty into play and prospect evaluations;
3) allowing decision makers to plan strategies for exploration of high graded plays and prospects;
4) helping governments unlock oil and gas potential by marketing acreage, gearing legislation and
ensuring appropriate infrastructure is available for future production.

Play analysis underpins YTF

The framework needed for YTF is play analysis where potential targets are separated into relevant
stratigraphic intervals and areas or “part plays” with common elements of charge, reservoir, seal and
trap, similar lithologies and related structural style (e.g. Grant et al. 1996; Brown and Rose 2001,
Fraser 2010). A part play is assumed to contain a geologically analogous, spatially-confined set of
related discoveries and/or prospects defined by part play-defining boundaries. Beyond the boundaries
lie part plays with different trap, reservoir, seal, source rock, subsidence/uplift history or tectonic
evolution, as well as areas where the play is interpreted not to work.

When delineating part plays, it is worth bearing in mind that the boundaries are interpretations which
are usually fuzzy and likely to change with new data and ideas. It is therefore recommended that part
play-defining boundaries are made as straight as possible, minimizing the number of vertices or
bends. This means that they do not appear geological - not only highlighting the uncertainty but also
making it easier to shift their location as the analysis evolves.

Part plays which are proven can provide statistics on existing discoveries and dry wells. The number
of times previous tests of the play have encountered trap, seal, reservoir and charge is data which can
be used in the assessment of geological risk in future wells (“average prospect risk”). Also, if this
information is converted into well traffic lights and shown on a map, then the historical data can be
used to delineate or improve the location of part play-defining boundaries.

Whether reliable statistics are available or not, the assessment of average prospect risk should reflect
the evaluation of a representative prospect or prospects, under the assumption that the play works. In
unproven part plays, this assessment is helped by pretending a particular prospect is actually a
discovery, making it easier to focus on the prospect-specific risks rather than including unproven
elements of the play.

In unproven part plays, there is an additional chance (“part play risk”) that there are no hydrocarbon
accumulations because one of the elements of the petroleum system is missing. Unfortunately,
exploration statistics do not help in the assessment of whether an unproven part play is likely to work
or not. Instead, group wisdom can be used: combining the views of many people with a range of
experiences and backgrounds to give a better evaluation of part play risk. Nonetheless, the largest
increases in discovered volumes typically occur where a new part play is proven, for example where a
geological boundary has been crossed previously regarded as a limit to prospectivity, exploration
having been deferred by virtue of perceived additional risk (e.g. Avaldsnes/Johan Sverdrup discovery,
Jørstad 2012). Therefore, it is important to continually review the interpreted boundaries of part plays
and the risks assigned to unproven part plays because it is in extensions to proven fairways and in new
fairways where often the largest YTF can be projected to lie.

79th EAGE Conference & Exhibition 2017 – Workshop Programme

Paris, France, 12-15 June 2017
Even in unproven part plays, empirical data from analogous targets, plus general information from
global plays, can be used to constrain and check YTF estimates. The most useful properties include:
- number of closures per 1000 km2 for similar structural domains (trap density);
- total recoverable resource per 1000 km2 (play richness) for relevant mature plays and basins;
- historical discovery rate (number of discoveries divided by no. of exploration wells);
- historical chance that a discovery is commercial (no. of fields divided by no. of discoveries);
- implied P99 (from historical distributions of recoverable resource size of discoveries);
- mmboe/km2 (from distribution of historical discovery resource size divided by footprint area);
- net reservoir thickness (plus important reservoir and fluid parameters specific to the part play).

It is worth noting that the average discovery size in a proven part play decreases markedly over time,
reflecting the fact that the largest prospects are drilled in the emerging exploration phase and there is
often only minor closures to drill in the mature phase. Therefore, a useful check on the reality of any
YTF estimation in a proven play is that the average future size is less than the historical average size.

One of the most important observations in resource prediction is that the individual size of discoveries
in proven part plays can be fitted to a lognormal distribution (e.g. Kaufmann 1963; Capen 1992; Rose
2001; Quirk and Ruthrauff 2006), i.e. they define a density curve with a normal shape when plotted
on a logarithmic axis. This is not only true of the entire exploration phase but also during statistically
valid sub-periods of time. We can therefore assume that discovery distributions will continue to be
lognormal into the future and this then allows us to build YTF scenarios for undrilled prospects.

Simple method for estimating YTF using deterministic scenarios

Nearly every estimate made in exploration is fraught with uncertainty. This is particularly true of
undrilled prospects where, despite our best estimates using geophysical and geological data, there is a
broad range of possibilities in the shape of the trap, the location of seals and reservoir within it, the
thickness and net properties of the reservoir and the nature of the hydrocarbons, even assuming the
prospect works in the first place. Typically this geological uncertainty is dealt with using
probabilistic analyses such as Monte Carlo simulation. However, what seems to be an objective
approach is spoilt with the unfortunate problem that most of the probabilistic distributions are
unknown. Quirk and Ruthrauff (2008) show that, with the same input ranges, the distributions used in
volumetrics can cause a doubling or halving of the calculated mean recoverable resource for a single
exploration prospect, a problem which is compounded when dealing with multiple prospects as is the
case in yet-to-find calculations. In addition, even if the inputs are transparent, the process of
combining multiple distributions means the results are sometimes difficult to fathom.

As a first approach YTF can be satisfactorily estimated using deterministic scenarios. Afterwards,
probabilistic models can be built from the underlying data if required, although this is not always
necessary as the deterministic scenarios can be used directly to calculate a full range of outcomes.

The method advocated here is illustrated in Fig. 1 and can be summarized as:
1) Calculate the number of future discoveries by multiplying the estimated number of prospects with
the average prospect risk (conditional on the play being proven) and convert their reverse
cumulative probabilities to fractile percentages: i.e. 100/(X+1)% for X predicted discoveries.
2) Fix the downside of the predicted YTF distribution with an assumed P99 recoverable resource
from historical statistics or from low case reservoir parameters (e.g. product of P90 values).
3) Fix the upside portion of the predicted YTF distribution using a reasonable largest or second
largest future discovery size (e.g. the mean recoverable resource of a favoured prospect).

With the number of future discoveries and their fractile percentages determined in step 1), the
distribution of the predicted future discoveries can be defined as a lognormal curve using the values
estimated in steps 2) and 3). The predicted discoveries are distributed evenly on the lognormal curve
(Fig. 2), similar to any other discovery size distribution. Thereby the recoverable resource size of all
the discoveries has been predicted and the YTF is simply their sum. The future average discovery

79th EAGE Conference & Exhibition 2017 – Workshop Programme

Paris, France, 12-15 June 2017
size is the YTF divided by the estimated number of discoveries - a useful check on the validity of the
results.

The distribution determined by this method represents a potential future success scenario based on the
assumptions that the part play has been fully explored and that the predicted discoveries are
reasonable. The values used in the YTF calculation are uncertain, particularly the number and size of
future prospects and it is therefore recommended that a minimum of three YTF scenarios are run,
allowing a range of outcomes to be built: a downside, mid and upside case. These scenarios will be to
some degree subjective but the assumptions in each scenario are transparent, making them easy to
report and adjust with new information.

Finally, as a tool to rank different exploration strategies, it is relatively straightforward to calculate the
value of standard YTF scenarios for various part plays. Thus, the economic YTF is the sum of
predicted discoveries larger than a generic minimum economic field size for each specific part play,
which can then be multiplied by NPV/boe for an average economic discovery to quantify the value of
the scenario (Fig. 2).

David G. Quirk, dgquirk@outlook.com, abstract for 79th EAGE Conference, 12-15 June 2017, Paris.

References

Brown, P.J., and Rose, P.R., 2001. Plays and concessions – a straightforward method for assessing volumes,
value and chance. Search and Discovery Article no. 40024 (adapted for online presentation from poster session
presented at AAPG Annual Meeting, Denver, CO, June 5, 2001).

Capen, E., 1992. Dealing with exploration uncertainties. In R. Steinmetz, ed., The business of petroleum
exploration, AAPG Treatise of Petroleum Geology, Handbook of Petroleum Geology, Chapter 5, pp 29–61.

Fraser, A.J., 2011. A regional overview of the exploration potential of the Middle East. A case study in the
application of play fairway risk mapping techniques. In B. A. Vining and S. C Pickering, eds., Petroleum
Geology: From Mature Basins to New Frontiers - Proceedings of the 7th Petroleum Geology Conference,
Geological Society of London, pp 791-800.

Grant, S., Milton, N. and Thompson, M., 1996. Play fairway analysis and risk mapping: an example using the
Middle Jurassic Brent Group in the northern North Sea. In A. G. Doré, and R. Sinding-Larsen, eds.,
Quantification and Prediction of Petroleum Resources. NPF Special Publication 6, pp 167-181.

Jørstad, A., 2012. Johan Sverdrup – Offshore Norway: The Story behind the Giant Sverdrup Discovery. Search
and Discovery Article no. 20177 (adapted from oral presentation at Forum: Discovery Thinking, AAPG
International Conference and Exhibition, Singapore, September 16-19, 2012).

Kaufman, G.M., 1963. Statistical Decision and Related Techniques in Oil and Gas Exploration. Prentice-Hall,
Englewood Cliffs, New Jersey, 307 p.

Quirk, D.G. & Ruthrauff, R.G., 2006. Analysis of reserves discovered in petroleum exploration. Journal of
Petroleum Geology, 29, pp 125-146.

Quirk, D.G. & Ruthrauff, R.G., 2008. Toward consistency in petroleum exploration: A systematic way of
constraining uncertainty in prospect volumetrics. AAPG Bulletin, 92, pp 1263-1291.

Rose, P. R., 2001. Risk Analysis and Management of Petroleum Exploration Ventures. AAPG Methods in
Exploration, Series no. 12, 164 p.

79th EAGE Conference & Exhibition 2017 – Workshop Programme

Paris, France, 12-15 June 2017
Figure 1. Illustration of deterministic scenario method for producing YTF from the assumption that future
discoveries, like historical discoveries, will fit to a lognormal distribution. The predicted number of discoveries
is calculated by multiplying the estimated number of prospects by the average prospect risk. These future
discoveries are then fitted to a lognormal trend using an upside discovery size, typically based on the evaluation
of a favoured prospect, and a downside value, the implied P99, either from historical data or calculation. The
YTF is the sum of the future discoveries and the average discovery size (YTF divided by number of discoveries)
is a useful QC. With a generic minimum economic field size, then the sum of the discoveries that exceed it
represent the economic YTF and a value can be put on these by multiplying the economic YTF by NPV/boe for
an average economic discovery.

Figure 2. Example YTF scenario for an unproven part play containing 12 prospects with an average prospect
risk of 65%, assuming the part play works (an estimated 70% chance that it does).

79th EAGE Conference & Exhibition 2017 – Workshop Programme

Paris, France, 12-15 June 2017