smart risk/reward trade off, page-15

COS estimates are an odd thing. If the oil / gas is there then the COS is largely based on the odds of not screwing up the well, otherwise the COS is 100% ! If the oil / gas isn't there then the COS is 0%, doesn't matter how perfect the execution is.

No idea where 20% comes from but soon enough the drill bit will either find one or more commercial resevoirs, or it won't. At which point the actual COS will become known and at which point it will be either 100% or 0%. The outcome is binary.