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Book Chapter

Economic Evaluation of Prospects with a Top Seal Risk

David C. Lowry
David C. Lowry
Origin Energy, Brisbane, Australia
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January 01, 2005


In petroleum exploration, an important task is to estimate both the reserves likely to be discovered in a prospect and the chance of success of finding them. Published advice on estimating reward and risk can be very misleading when applied to a prospect with a risk of membrane seal failure. The literature mostly recommends assessing the reward on the basis of the mean reserve volume of the mapped closure and the risk on the chance of finding a minimal amount of petroleum. This method breaks down for prospects where the perceived chance of success of the top seal being effective varies with prospect’s estimated column height. If the chance of retaining a column that will give a mean reserves volume is much less than the chance of retaining a minimal column, the value of the prospect will be grossly overestimated. This chapter presents several alternative methods. The preferred method of obtaining an expected monetary value (EMV) is to construct a curve of chance of top seal against column height and calculate a graph of the net present value and EMV for numerous levels. If the EMV is positive at any level, the prospect can be considered for drilling.

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Figures & Tables


AAPG Hedberg Series

Evaluating Fault and Cap Rock Seals

Peter Boult
Peter Boult
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John Kaldi
John Kaldi
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American Association of Petroleum Geologists
ISBN electronic:
Publication date:
January 01, 2005




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