The following is a simulated flier of an opportunity for farm-out pitched at exploration oil & gas professionals familiar with new venture opportunity evaluations.  The flier is followed by a questionnaire, which will form part of the experiment on collapsing cognitive bias announced in an article (here) published in September 2017.  You are asked to temporarily set aside uncertainty and gaze in to the future, stating what you see the outcome being, then indicating in the questionnaire (under gut-feeling”) how bullish or reserved you have been in your assessment.

Farm-out simulation

 
 
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You are invited to farm-in to a 10,000 sqkm exploration license located in deep-water in a developing country which has enjoyed 30 years of peace following some turbulence in the 1970s.  The license has a commitment to drill in 5 years time, which you share on a ground-floor equity basis with an option to shoot 3D seismic in the next 2 years. The shallow inboard region had a minor boom in the 1960s with small discoveries, which declined in production to around 400 bbl/day in 2010 from low porosity Eocene shelf carbonates on an attenuated passive margin.  Even though the discoveries prove the existence of a petroleum system for the inboard, production of oil today is sporadic from fractures, which water out after a few hours.  The farm-in license is outboard of the proven shelf some 40 km from shore and the nearest infrastructure with an unproven petroleum system in what is a frontier basin.  

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The license block is covered by a good quality 5km 2D seismic grid, with 2km grid over the main prospect which lies over oceanic crust covered with a thick pile of sediment building out from the shelfal areas.  The main play consists of aggradational carbonate build-ups sealed by hemipelagic shales charged by organic rich late Cretaceous to Eocene shales that accumulated in restricted troughs located between volcanic ridges.  The carbonate reservoirs are believed to be Eocene in age but precise ages cannot be determined from jump-correlations from long offset shelfal wells.  The build-ups are high relief (typically 500m) growing on subaqueous volcanic substrates.  These are thought to have been sealed by Oligocene times during rapid burial and are covered by some 2 seconds of overburden.  There are some gas flags present in the overburden as well as evidence of crestal faulting above the build-ups.

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1 prospect and 6 leads have been revealed by existing 2D seismic.  Prospect "A" is located in 800m water depth 50km from the coast.  The structure is 15 kms long and 4 kms wide with 600m of vertical relief.  Internal geometries are consistent with reef aggradation, with some marginal reef collapse and the potential for vadose leaching through sea-level fluctuations.  The Malampaya oil and gas field in the Philippines is often quoted as the most likely analogue for the prospect, although they point out that Malampaya is smaller.  Fetch in to the structure from deeper buried early Eocene source rocks is all around the structure but not extensive and is currently mostly in the oil window, with speculated low geothermal gradients.  The prospect, therefore, is an oil prospect but late gas flushing suggests the potential for a gas cap.  Despite the presence of gas flags in the overburden, reef heterogeneities indicates that Gassman substitution will not work here and so no AvO response is either seen or expected.

Having absorbed the above, click on the crystals and answer the questionnaire.