COS .... whats it mean?, page-4

Technically COS refers to geological chance of success. This usually is derived by multiplying four independent probabilities. These are

(a) probability of source (migration from kitchen)
(b) probability of seal (is there an impervious cap rock)
(c) probability of trap (structure to hold/trap hydrocarbons)
(d) probability of reservoir (probability of a capable/porous/permeable reservoir)

Note some companies use more than 4 parameters but the above are the most common.

The above is not a commercial chance of success. If we found 1 barrel of oil this would be deemed a technical success. To get commercial change of success we multiply the geological chance of success with the probability of getting more than a minimum recoverable amount that would make the find commercial.

On land this could be as small as 200,000 bbls if close to existing infrastructure and offshore this could be as much as 50-100 mmbbls.

The (economic) minimum recoverable amount is also known in the trade as MEPS (Minimum Economic Pool Size) and is calculated on a prospect by prospect basis. Inputs include the price of oil (forecast), cost of infrastructure, royalties, minimum economic return required (hurdle rate) to compensate for risk etc.

MEPS is a non trivial calculation.