Aims of Prospect Appraisal

Le doute n'est pas une condition agréable, mais la certitude est absurde.
(Doubt is not an agreeable condition, but certainty is an absurd one)

Voltaire (1767) in a letter to Frederick II of Prussia

The necessity of prospect appraisal is undisputed, both to translate geology into figures and to express the uncertainty implicit in oil and gas exploration.

In the best case the aim is to provide management with a "ready-made decision" to drill or not to drill. In practice this is not attainable. One good reason is that the people delivering such a "decision" do not normally know the wider implications, such as competing investment opportunities or political/strategic aspects.
When we talk about prospect evaluation, all aspects of an individual investment opportunity are considered and not limited to geological assessment in terms of probability of success and volume of hydrocarbons in case of success, but all the way, including the economic evaluation.

The aims can be summarized as follows:


The main aim, of course, remains generating numbers that are the translation of an uncertain situation into a form that can be used in an economic evaluation of risks and rewards.