Wild Bill - your post got me thinking about how to make some...

Wild Bill - your post got me thinking about how to make some sense out of a COS for Matuku that was a bit further along than merely by assigning the traditional success rate for the industry, say as in your 1 in 7-10.

These are my thoughts for the moment:

In conventional exploration that is seeking out discoveries within structural or stratigraphic traps we can identify four parameters that make up a successful well: structure, reservoir, seal, hydrocarbon. Therefore let's try to get inside the heads of the exploration team and say that they are actually choosing to go ahead and drill a well when they are feeling pretty darn confident that at least one of the parameters has been satisfied. That is, they are confident that one of either structure or seal or reservoir or hydrocarbon will be drilled by the well. Further, they have done the work such that across the three remaining uncertainties they can say that each parameter either will or will not be present, and that on average there is half a chance either way [Y or N] for each parameter. That being so this class of well as drilled by the O&G company will then produce a historic COS [discovery well] of 1/2*1/2*1/2 or 1/8. Which is sort of within your 1 in 7-10 range.

The next step is to consider what will be the historic COS rate if the class of well was typified by an exploration team as one showing great confidence in two of the parameters [eg say structure and seal] but the remaining two parameters again just have half a chance of being present. This class of well would give a historic COS of 1/2*1/2 or 1/4. So maybe this COS may be more properly applied to step out wells where confidence is higher than the for the traditional well above due to the nearby proven discovery.

The final step is to ask what about the well where three of the parameters are known with great confidence and just one remaining parameter has yet to fall into line. The COS for this well is 1/2.

So then we ask where does Matuku fit into this scheme?

We know the JV has already planned for Matuku-2. Therefore we have to say that they clearly have sufficient confidence in Matuku to have warranted this step. So we ask would they have taken this step for the COS 1/8 well or the COS 1/4 well or the COS 1/2 well. It is my reading that it isn't 1/8 nor is it 1/4 because to my mind 1/4 just doesn't seem strong enough odds to already be planning Matuku-2 upon.

Then is COS for Matuku-1 actually 1/2, as representing the typical COS for the higher class of well which essentially has uncertainty on only the single parameter. Separately, and as I have previously posted, Matuku does present itself as basically the single parameter uncertainty well - viz structure [Y], reservoir [Y], seal [Y]. The single dominant uncertainty that remains is whether Matuku sits upon a migration path, and that is either Y or N and maybe each is half a chance either way.