Exploration of Correlated Prospects and Possible Joint Development Solutions

Research output: Chapter in Book/Report/Conference proceedingConference contribution


Drilling exploration wells depend on the uncertainty we perceive. With some simplification, this uncertainty is about the value of producible hydrocarbons. To drill a prospect, the expected benefits from producing and selling hydrocarbons should outweigh the costs. This principle also applies to clusters of interrelated exploration targets. Here, the benefits of drilling each prospect is information about the neighbouring prospects, proving producible hydrocarbons, or both; these benefits should outweigh the aggregate costs. In practice, estimating the expected benefit could be challenging especially when multiple smaller discoveries are developed under a joint development scheme. With these interrelationships, what is the optimal drilling strategy? In addition, what is the economic value of a group of prospects? This paper discusses the effect of joint development economics on perceived uncertainty and drilling decisions. We suggest a framework for valuation of correlated prospects.
Original languageEnglish
Title of host publicationSPE Europec Featured at 82nd EAGE Conference and Exhibition
PublisherSociety of Petroleum Engineers
ISBN (Print)9781613997123
Publication statusPublished - 8 Jun 2020
EventSPE Europec featured at 82nd EAGE Conference and Exhibition 2020 - RAI Amsterdam, Amsterdam, Netherlands
Duration: 8 Dec 202011 Dec 2020


ConferenceSPE Europec featured at 82nd EAGE Conference and Exhibition 2020
Internet address

ASJC Scopus subject areas

  • Geophysics
  • Geochemistry and Petrology


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