Exploration Feasibility Study of Kansas’s Central Uplift for Intended use in Stochastic Decision Tree Analysis in New Drilling Programs

Exploration Feasibility Study of Kansas’s Central Uplift for Intended use in Stochastic Decision Tree Analysis in New Drilling Programs

Prepared for:

A.C.T. Operating Company

Midland, Texas

NOTE- PLACE A TTU SEAL IN THE BACKGROUND

ABSTRACT

My master’s project consisted of an exploration program feasibility study of Kansas’s Central Uplift. The purpose of the study was to see if drilling is justifiable in this region after analyzing Kansas’s Geological Survey lease production database. The Central Uplift has three main reservoir targets (Pennsylvanian age –Lansing/Kansas City, and Ordovician-Arbuckle). Some fields in the area have been producing since pre-1960s. From a project analysis stand point, decision tree methods aide in assigning value to different outcomes from drilling (i.e. dry hole, excellent or poor well) and incorporates those values to a project worth or NPV (net present value). As a classical approach, deterministic approached utilized discrete values (high, medium, and low) in assigning success and failure rates for exploration outcomes. My analysis involved using a stochastic approach. Instead of looking at the hard data from one scenario, I could take the entire data set and fit a distribution to it, then run a Monte Carlo simulator for 10000 iterations. The outputs from the simulator better enable me to assess oil recovery given certainty values from a planned drilling program. Basically, at the end of the day, I could go to management and tell them with this drilling package size you can expect an ultimate oil recovery with a given level of certainty for this area.

Following up on the project for the entire Kansas Central Uplift, conclusions and recommendations were given. D...

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