COS .... whats it mean?, page-6

It could also mean that one or more items could be set at 1 (unlikely) and other factors at less than 0.85.

I’m not a company insider, so I can’t comment on where FAR have placed their probabilities.

However, I would point out that the end result is a coin flip, viz.. close to 50% anyway.

Whichever way you look at it it’s still a 50-55% bet. None of the four factors would normally be a certainty but you also have to remember that all four factors must be there for the well to be a technical success.

Since the low, mean and high prospective resources (P90, Pmean, and P10) numbers are quite high, I suspect that P(MEPS) is very close to 1, implying that the commercial chance of success if very close to the geological chance of success,viz close to 0.5. That is, if FAR finds something, it’s probably (but not certainly) going to be commercial. The only thing that is certain is that it won’t be 825 mmbbls.

But I need to stress that even 4 independant probabilities close to 0.85 is no cause for overconfidence, since the end result is around 50% as each variable is independant.

Suggest you keep that number in mind instead of 4 lots of 0.85.

Note also that each of those four numbers is nothing more than a quasi-subjective guess. Some parts of geology and/or geophysics are science, some parts are more like art.