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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This volume constitutes the proceedings of the AAPG Hedberg conference on seals held in Barossa Valley, South Australia, in 2002. The key driver for both the Hedberg conference and this publication was the recognition that knowledge of risk in the estimation of sealing capacity and fault-seal potential is important in making judgments at the exploration, appraisal, and development stages of the petroleum business. In addition, incorporating seal risk in the overall assessment of hydrocarbons in place can affect decisions to drill prospects and the location of appraisal and development wells, as well as reserve estimation. Improved methods to estimate seal capacity and fault integrity can lead to savings in well costs, improved recoveries through optimum placement of wells, and improved estimates of hydrocarbon in place. This volume contains 18 chapters that reflect the spectrum of presentations at the conference. The knowledge imparted by these chapters will be a window on the state of seal knowledge at this juncture of time and includes topics such as seal failure related to basin-scale processes, the role of geomechanics in seals, and the economic evaluation of prospects with a top seal risk.