Exploration Valuation and Decision Analysis

Finding hydrocarbon resources is an uncertain business. While historically most wildcat wells became dry holes, some successful wells have led to discoveries that changed the course of business. With such uncertain outcomes, how do we know an exploration opportunity is a good venture? This PetroKnowledge training course discusses the skills and analytical tools that answer this question.

A good exploration decision is multi-dimensional;  it is about understanding disciplines from subsurface to commercial; a wide coverage that eventually reflect our understanding about value potentials of exploration decisions. Our focus will therefore be on “value” rather than the generally desired “volume.” We will discuss value drivers for exploration drilling, from the usual suspects—chance of success and oil prices—to the less tangible subject of value of information. We use economic and analysis tools that support good decision-making.

This PetroKnowledge training course will highlight following:

• Petroleum Exploration Value Chain, Uncertainties, and Decisions
• Principles of Economic Decision Analysis
• Challenges of Investment Under Uncertainty
• Analytical Tools, including Bayesian probabilities, Monte Carlo Simulation, and Decision Trees
• Case Studies in Valuation and Decision Making for Wildcat Wells, Appraisal Wells, and Multi-Prospect Exploration Plays

We will cover the art and science of valuation in hydrocarbon exploration. Our goal is to familiarize the participants with an understanding of uncertainties, decisions, and consistent valuation of exploration opportunities. In addition, we discuss the analytical tools that support exploration decision making.

At the end of this PetroKnowledge training course, you will learn to:

• Understand the concept of economic value in hydrocarbon exploration
• Analyze the relevant sources of uncertainty: including geological, technical, operational, market, and regulatory risks, and explore risk mitigation strategies
• Use decision analysis frameworks and tools such as decision trees, scenario analysis, sensitivity analysis, and real options analysis to evaluate investment decisions under uncertainty and optimize exploration strategies
• Gain skills in implementation of analytical tools such as reserve-based valuation, probabilistic resource assessment, and Monte Carlo simulation techniques
• Learn about industry best practice: Develop skills in evaluating exploration prospects, conducting economic feasibility studies, and making informed investment decisions

This Exploration Valuation and Decision Analysis training course is useful for Analysts, Engineers, and Managers involved in the process of exploration decision making, as well as professionals interested in practice of oil and gas exploration business.

This PetroKnowledge training course is suitable to a wide range of professionals but will greatly benefit: 

• Technical Staff interested in decision-making side of exploration
• Commercial Staff interested in gaining in-depth knowledge of valuation and analysis
• Managers involved in exploration decisions
• Researchers and Practitioners who aim to broaden their knowledge of exploration valuation
• Managers in industries and professions supplying or serving the industry who would like a deeper understanding of oil and gas, e.g., Bankers, Lawyers, Analysts, Service Majors, etc
• Project Managers, Engineers, Planners & Scheduling Professionals

Primarily, all oil and gas firms run businesses. For them, creating value is the goal. With uncertain subsurface opportunities and market trends, those firms that understand good decision making and invest in valuable ventures will be poised to succeed in this evolving landscape.

This PetroKnowledge training course trains individuals that:

• Increase organisation’s capabilities in creating investments insights
• Possess knowledge and skills to deal with investments in uncertain environments
• Are effective in enhancing value chain in exploration
• Open doors to further opportunities and more informed exploration decisions
• Understand trends in carbon emissions and environmental considerations
• Create value through prudent exploration investment decisions