This paper outlines a model for predicting the probable volumes of oil-in-place (OIP) and recoverable volumes of oil that will result from the progressive exploration of an area of geologic interest. The model takes specific account of historical drilling results and the available geologic assessments of the basin. The discovery predictions may be combined with drilling cost information to define average and marginal finding cost curves. These may be used to analyze the relative attractiveness of alternative opportunities and, ultimately, to help firms more efficiently allocate limited exploration budgets among competing basins.
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