Aussie155,
It's practically unheard of where one commissions an IRR for Prospective Resources, so I dont know what DW will tell u, although he is prompt with his emails but dont expect him to sensationalise anything.
I guess most folks here aren't Petroleum Geo's here, so for the benefit of all here's how it works, in a much simpler tone.
A company picks up some acreage, revisits past seismic data & vintage well records, organizes shooting its own 2D/3D seismics, aeromag, gravity surveys.
Once that's done, potential structures/targets are identified by Geophysicists. These are then matured to Prospects which then get filtered down to Drillable targets.
So essentially u cast the blanket wide enough & then analyse the subsurface data. If there's is oil & gas then one looks for direct HC indicators (DHI's) & zones in on that Lead. Porous rocks filled with gas, oil or water will stand out compared to tight strata.
Given the unknown nature of 88E's conventional prospects (and the recent success by Caelus Energy), mapping reveals submarine fans etc which r basically sand sheets from Cretaceous times spread over a largish area.
Think of it a a large tidal wave or series of small tides washing & dumping debris over a slope over many millions of years & these debris get covered by overburden & any subsequent organic matter undergoes changes in its properties as per the depth, temperature & burial pressure. This is referred to a 'HC kitchen' which generates gas, oil or condensate. So for example if depth is betwn 1600-3000 metres, temp is 150-180deg u'd expect oil to b generated from the organic matter.
That's basically what 88E has done so far & henceforth highlighted its conventional targets ie Alpha, Bravo etc. These carry a risk factor (ie referred to as 'Geological chance of success' eg 20-30%).
So its not guaranteed that the HC figure quoted as Prospective will b found.
Any analyst will simply multiply this figure with a recovery factor, risk factor & a low $/bbl estimate. U cant use US5/bbl simply bcoz there r no oil producing wells on this Permit.
One needs movable HC's over a largish area to b classed as 'Commercial'. So its very early days here.
In a nutshell, u need to drill a well first, core it, run logs, do a DST & then appraise the Field by a followup well. At that point the Prospective changes to Contingent Resource (ie 2C). A DST is helpful to assess recovery factor from the reservoir.
More wells r then drilled on the field & then the 2C 'resource' changes over to 2P 'reserves' category. Pls refer the SPE-PRMS diagram for Petroleum Resource classifications (just google it).
Please read the cautionary statement on 88E's release. It is very premature to even assume that they will find oil in these targets with 2Dseis without drilling a well. The company should use this data to farm out & reduce its risk exposure. Hope this helps.
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