Oil And Gas Prospect Assessment For High Probability Of Investment Success
So you have a lead that has turned into a prospect which could become your next oil and gas investment project?
Now you have to decide whether your company should take the risk and develop the project for commercial production.
It may seem as simple as probing the well to determine the reserve volume levels to see how much liquid gold lies underneath, but this is where most investments go wrong.
Evaluating The Risk Of Oil And Gas Drilling
There are a multitude of risk factors that you must take into account when assessing a drilling prospect in order to make it successful within a commercial application.
This requires a methodical analysis covering parameters within reserve estimates, geological specific risks, present and future commodity market prices, taxes and royalties, political risks, and dozens of other factors that no matter how small can be the difference between a nice profit and a sunk cost investment.
Determining The Probability Of Oil And Gas Prospect Economic Success
The ultimate objective of any drilling prospect is commercial profit, we must determine the possible operational expenses along with the potential yield of the reserve.