Exploration Success Equation

There are several definitions of petroleum exploration success. Geological (or technical) success is defined as finding oil & gas accumulations. Commercial (or economic) success means finding oil and gas accumulations that result in financial profits. Another, less common definition is finding oil and gas accumulations that, on a portfolio basis, have total resource volumes and create total monetary value as predicted before the drilling. However, exploration companies commonly deliver exploration results that are not consistent with pre-drill predictions. For example, Rudolph and Goulding (2017) studied drilling results from ExxonMobil conventional exploration in 1994-2015 and found that delivered volumes were 27% larger than pre-drill predictions. On the other hand, the study of Lundin’s exploration on the Norwegian Continental Shelf (NCS) in 2011-2015 revealed that the company delivered volumes that were 45% below the expectation from the portfolio of 25 wells (Milkov, 2017).