Chapter 1 - Introduction

01-01 - Welcome & Course Outline (16 min.) Sample Lesson
01-02 - Why Is Risking Important? (5 min.)
01-03 - The Basic Idea (5 min.)
01-04 - A Thought Experiment (5 min.)
01-05 - Why Probability Is Hard (7 min.)

Chapter 2 - Basic Statistics

02-01 - The Language of Statistics (3 min.)
02-02 - Marginal Probability (2 min.)
02-03 - Joint Probability (3 min.)
02-04 - Conditional Probability (5 min.)
02-05 - Probability of Success vs Failure (7 min.)
02-06 - Probability Distributions (8 min.)
02-07 - PDFs vs CDFs (4 min.)
02-08 - Monte Carlo Analysis (7 min.)
02-09 - Key Takeaways (2 min.)
02-10 - Probability as Related to Risking (3 min.)
02-11 - Data for Property Distributions (7 min.)
02-12 - Identifying Distributions (8 min.)
02-13 - Area Distribution (7 min.) Quiz: 02-13 - Area Distribution

Chapter 3 - Hydrocarbon Systems

03-01 - What Is The Hydrocarbon System? (5 min.)
03-02 - Structure / Trap (6 min.)
03-03 - Seal (8 min.)
03-04 - Reservoir (8 min.)
03-05 - Source Rock Presence & Maturity (8 min.)
03-06 - Migration (7 min.)
03-07 - Considerations For Risking (5 min.)
03-08 - Key Takeaways (5 min.)
03-09 - Non-System Risk Categories (8 min.)
03-10 - Risking by Hydrocarbon System Component (5 min.) Quiz: 03-10 - Risking by Hydrocarbon System Component

Chapter 4 - Risking Frameworks

04-01 - What Are Risking Frameworks (6 min.)
04-02 - Risking Prospects (7 min.)
04-03 - Milikov's Risking Framework (8 min.)
04-04 - Risk Tables & Framework For Structure (10 min.)
04-05 - Framework For Seal (8 min.)
04-06 - Framework For Reservoir Presence (8 min.)
04-07 - Framework For Reservoir Deliverability (7 min.)
04-08 - Framework For Source Presence And Maturity (7 min.)
04-09 - Framework For Migration From Source Kitchen (7 min.)
04-10 - Building Your Own Framework (7 min.)
04-11 - Key Takeaways (2 min.)
04-12 - Two Risk Examples (8 min.) Quiz: 04-12 - Two Risk Examples

Chapter 5 - De-Risking and Reducing Uncertainty

05-01 - De-Risking And Reducing Uncertainty (3 min.)
05-02 - Example 1: Infill Seismic Lines (4 min.)
05-03 - Example 2: Drilling Offset Well (2 min.)
05-04 - Deciding On Further Data Acquisition (7 min.)
05-05 - Common Risks Across a Portfolio (Part 1) (7 min.)
05-06 - Common Risks Across a Portfolio (Part 2) (8 min.)
05-07 - Summary (3 min.) Quiz: 05-07 - Summary

Chapter 6 - Volumetric Analysis

06-01 - Volumetric Calculations (7 min.)
06-02 - Volumetrics With Ranges (5 min.)
06-03 - Key Takeaways (3 min.)
06-04 - Using Ranges Correctly (7 min.)
06-05 - Monte Carlo For Ranges (7 min.)
06-06 - Summary of Using Ranges (2 min.) Quiz: 06-06 - Summary of Using Ranges

Chapter 7 - Risked Volumetrics

07-01 - Risked Volumes: The Wrong Way (8 min.)
07-02 - Risked Volumes: The Right Way (5 min.)
07-03 - Monte Carlo For Risks (5 min.)
07-04 - Summary Of Risked Volumetrics (2 min.) Quiz: 07-04 - Summary Of Risked Volumetrics

Chapter 8 - Multiple Zones and Shared Risk

08-01 - Example Scenario: Multiple Zones and Shared Risks (5 min.)
08-02 - Shared vs. Independent Risks (6 min.)
08-03 - Example : Shared vs. Independent Risks (6 min.)
08-04 - Which Interpretation is Correct? (Part 1) (9 min.)
08-05 - Which Interpretation is Correct? (Part 2) (8 min.)
08-06 - Calculating Shared Risk (7 min.)
08-07 - Calculating Shared Risk : Best Practice (4 min.)
08-08 - Calculating Shared Risk : The Wrong Way (4 min.)
08-09 - Key Takeaways (4 min.) Quiz: 08-09 - Key Takeaways

Chapter 9 - Exploration Portfolios

09-01 - Evaluating A Portfolio (7 min.)
09-02 - Probability of Success vs Failure (6 min.)
09-03 - Portfolio Shapes and Sizes (8 min.)
09-04 - Evaluating A Portfolio - Creaming Curves (9 min.)
09-05 - Evaluating A Portfolio - In Small Companies (8 min.)
09-06 - Evaluating A Portfolio - Common Risks (9 min.)
09-07 - Evaluating A Portfolio - Post Failure Analysis (9 min.)
09-08 - Summary of Exploration Portfolios (6 min.) Quiz: 09-08 - Summary of Exploration Portfolios

Chapter 10 - Stakeholder Communication

10-01 - Communicating Risk (10 min.) Quiz: 10-01 - Communicating Risk

Chapter 11 - Course Wrap-Up

11-01 - Three Takeaway Messages (5 min.)

Chapter 12 - Hands-On Examples

12-01- Tools Required (8 min.)
12-02 - Hands On Examples - Overview (4 min.)
12-03 - Hands On Example 1 - Shiraz Metadata (3 min.)
12-04 - Hands On Example 1 - Shiraz Risking (9 min.)
12-05 - Hands On Example 1 - Shiraz Properties (9 min.)
12-06 - Hands On Example 2 - Merlot Metadata (3 min.)
12-07 - Hands On Example 2 - Merlot Risking (8 min.)
12-08 - Hands On Example 2 - Merlot Properties (8 min.)
12-09 - Hands On Example 3 - Malbec Metadata (2 min.)
12-10 - Hands On Example 3 - Malbec Risking (8 min.)
12-11 - Hands On Example 3 - Malbec Properties (5 min.)
12-12 - Example Portfolio Overview (9 min.)

Geological Risking / Chapter 1 - Introduction

Lesson 01-01 - Welcome & Course Outline

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Transcript

01. Lesson 1.01: Welcome & Course Outline 02. Course Overview 03. About the Instructor 04. What is Geological Risking?05. Geological Risking 06. Course Objectives 07. Who Should Take This Course?08. Presumed Knowledge 09. Course Modules 10. Hands On Application 11. What this Course Doesn't Cover

01. Lesson 1.01: Welcome & Course Outline

Hello everybody, my name is Cameron Snow, and I'd like to welcome you to this course on geological risking for exploration in oil and gas. In this course we're going to be focused on the geological risking process and how you can apply it to your exploration prospects.

02. Course Overview

But before we dive in to the material here in this course, I want to give you a overview of a few things. So specifically, what are the objectives of this course? Who have I designed it for? What are we going to focus on? And then we'll go into a detailed course outline.

03. About the Instructor

But before we do that, I think you should know a little bit about myself. So I'm a geologist and petrophysicist with about 20 years of experience in the oil and gas industry. I've had the benefit of working across several different geographies. This includes North America, South America, Europe, Africa and Australia. And within this experience, I've worked everything from frontier exploration through infill development drilling projects. So I think I can bring an interesting set of experience and put things in context for you when we're talking about geological risking. I'm also the co-founder of Danomics.com and GeoRiskX.com, which are platforms for petrophysical interpretation and geological risking, respectively.

04. What is Geological Risking?

So what I want to do next is I want to dive in to what geological risking is. So when we talk about geological risking, what exactly are we talking about? Geological risking, it's the process of evaluating each component of the hydrocarbon system and the likelihood that it is present. So let's break that down.
So what do we mean by the hydrocarbon system? The hydrocarbon system refers to each of those critical components that are necessary for us to have an accumulation of oil and gas in the subsurface. So the ones that we'll specifically be covering will include your structure,seal, reservoir presence, reservoir quality, the source rock and its maturity and the migration pathway from thatsource rock into our trap. So that's what we mean by the hydrocarbon system. Now what do we mean when we say the likelihood of each of those components being present? Well, we're going to cast things in the language of probability in this course. So you'll often hear us refer to things like "what is the probability of the trap being present?". What's the likelihood of the source rock being present and mature? That's what we mean when we say we're going to speak about it in terms of probability.
Now what goes hand in hand with geological risking? Determining the range of volumetric outcomes. So a good section of this course will be dedicated to determining the volumetrics for our system. Now, a lot of you are going to say, I already know how to do this. Once again, we're going to put this in the context of probabilities. And specifically, we're going to use Monte Carlo analysis to determine the range of volumetric outcomes for your exploration prospects.
And then what is most important is we're going to combine those two concepts. We're going to combine the concepts of geological risking and our probabilistic volumetric outcome to give us a risk assessment of our potential outcomes. So that is what we're going to be focused on in this course.

05. Geological Risking

But before we go any further, I want to say something that's a little bit controversial. And that's that geological risking is not real. What do I mean by that? What I mean is that geological risk is not something that you can measure before or during the drilling of a well. So we can't go out and set up something like a seismic survey to measure geological risk. There's no tool that we can run down the hole to measure geological risk. It's not a property of the reservoir. We can't collect a core sample and measure risk.
Risk is, essentially, it's a construct of our opinions and beliefs about the subsurface. Now we're going to base that on experience and data. We're going to put it in the context of a rigorous framework so that we can perform this assessment confidently and consistently. But I think it's important for you to know before we go any further in this course, that geological risk is not something that we can measure. And with that said, geological risking is something that we do before we drill the well. So before we drill the well, we will analyze our data and we'll make an assessment of the likelihood of success. But after we've drilled the well, by and large the risk is going to disappear. We will know what the outcome is. We'll know whether or not we have a discovery and that will include things like telling us, do we have an active hydrocarbon system that's generating oil and gas? Do we have an adequate trap? Do we have seal to hold that hydrocarbon in? And is the reservoir capable of delivering? Now, of course, you'll still have questions. You'll still need to understand the reservoir better to plan out a development program. And there will be a number of other questions that you'll need to ask about that reservoir. But the geological risking at that point will largely fall away. So that's just one disclaimer that I wanted to get out of the way before we move any further.

06. Course Objectives

One of the primary things that I want to do in this course is I want to give you the background knowledge that you need to confidently perform a risk assessment on your exploration prospects. So I'm going to dive into all the background material that you will need to perform a risk assessment.
I also want to give you the tools so you can go in and analyze your company's exploration portfolio. It's likely that your company has more than one exploration prospect out there. And if that's the case, you'll need to understand how to look at a number of exploration prospects and compare them to one another.
As part of this, you need to understand how to perform risk analysis consistently. And so we're going to go into how to use a risking framework to perform this risk analysis so you can then make apples to apples comparisons across a number of exploration prospects.
And then finally, I want to teach you how to reduce both the risk and uncertainty associated with your exploration prospects.

07. Who Should Take This Course?

So with that said, who should take this course? Well, I've designed this course to be accessible to everyone, from early career staff through senior staff. So whether or not it's your first week on the job or you've got 30 years of experience, I believe that there's something in this course that you'll be able to take away and benefit from.
Now, I've designed this course specifically for the geoscientists, but it's accessible to everyone. The reason I've designed it for the geoscientists is because this course is focused on exploration and on evaluating the pre-drill subsurface risk and this mainly falls in the realm of the geologists. It's primarily their responsibility. However, I believe that this course has a lot to offer to reservoir engineers, planning staff, finance staff, anyone who's involved in the exploration process. We all have a part to play and even though you may not be doing the risk assessment, it may be important for you to understand it. So this course could be for you as well. I've tried to make the course a la carte so you can consume the pieces of it that are most relevant to you. And I've tried to keep the barrier to entry rather low. So this means we will do a lot of review of concepts that many of you already know before we move on to some of the more advanced concepts. So it should be accessible to everyone in your organization.
I also think this course can be valuable to managers. So whether or not you're a seasoned exploration manager who's just maybe looking for ways that you can give your team more tools to perform consistent risk analysis. Or whether or not you are a reservoir engineer that maybe is now in charge of a exploration team and you're looking to better understand the assessments that your geologists are bringing to you. So with that said, I think this course is broadly applicable for everyone and I think everyone can take something away from it.

08. Presumed Knowledge

Now, with that said, I do expect you to have some background knowledge in here. So here's what I'm going to assume that you know. I'm going to assume that you have a basic comfort level with simple math. So we're going to review probability in detail in this course, and we're going to give you the tools that are necessary to perform a risk analysis, but you will need to understand some basic math. It'll mostly just be multiplication and division. However, there are times where we will mention integrals and derivatives, but that'll mostly be conceptual.
You should have a general understanding of geology and oil field terminology. So we're going to cover the specifics of the hydrocarbon system that you need to perform a risk analysis. However, you do need to know some of the terminology. It's important that you know the difference between a sand and a shale, for example, when I use those. Or if I use a term like oil in place, it's important that you understand what that means. If you don't understand those terms, they'll all be things that you can go look up on Google or that you can learn out of basic textbooks, but of course I will have to use some of those terms throughout this course.
And we are going to be spending a lot of time talking about volumetrics and units. Specifically, we'll be talking about oil in place and we'll be doing some of those calculations. Once again, I'll provide you the details on doing that calculation, but there may be some background terminology that you need to go look up.

09. Course Modules

In this course we have broken it down into 10 modules.
The first module will be a basic introduction to the concept of geological risking and why it's important.
Then we'll move into some basic statistics where we'll cover things like marginal, joint and conditional probabilities. We'll cover different types of probability distributions and Monte Carlo analysis.
We'll then move into the hydrocarbon system, where we'll walk through each component of the hydrocarbon system in detail.
Once we've done that we'll progress on to risking frameworks and how we can apply those to perform a more consistent risk analysis across multiple exploration prospects.
Then we'll dive into how you can reduce the risk and uncertainty on your prospects through different types of analysis and data collection.
Once we've done that, we're going to change gears a little bit and we're going to move into the volumetric assessment. So we'll start off by reviewing volumetrics and how we can apply Monte Carlo analysis to calculating volumetrics.
And then we're going to combine that with the work that we've done on risking to come up with our risk volumetrics.
Then we'll progress on to some more sophisticated scenarios. Specifically, what happens when you have multiple zones in your exploration prospect and when you have a shared risk amongst those zones. So we're going to handle some more of the complicated scenarios that can arise.
Then we'll discuss exploration portfolios and we'll look at how exploration portfolios can be different between small companies and large companies and some of the complications that may create.
And then we're going to wrap up with stakeholder communication. So how can we better communicate risk to everyone involved in the process?

10. Hands On Application

Then we will progress on to a bit of hands on application. This part will be optional, but we will give you the option to go in and perform a real example risk analysis using the GeoRiskX platform, so that way you can understand what it's like doing a risk assessment in a modern software platform.

11. What this Course Doesn't Cover

Now there are some things that we aren't going to cover in this course, just to be clear about what those are upfront.
We're not going to be covering economic analysis in this course. There are a number of reasons for that. First of all, fiscal regimes can vary quite a bit among different countries. Your intra-company finances are also going to be specific to your organization. Also, when it comes to things like doing full cycle economics, where we have decision gates around different development scenarios. That's really beyond the scope of this course and not something that we'll be covering.
We're also not going to be covering reserves and resources categorizations. Typically, the risking occurs before we get into the discussion about whether or not something is 1P, 2P, 3P. So we're not going to be covering that. And also remember that reserves classification is something that's highly regulated. So it's better that you talk about that with your reserves auditors and your corporate reservoir engineering group. It's not something that we're going to be covering in this course. So just keep that in mind.
We're also not going to be covering the non-technical risk. Now, these can be things that are fun to talk about, whether or not it's country risk, political risk. What are the commercial risks associated with your exploration projects? Although these are very important, they're not something that we're going to be covering here. These are things that are often quite dynamic. As you know, the politics of risk in-country are constantly evolving as things happen. And so that's really not something that we're going to cover here because in all likelihood, it wouldn't age well with this course. With commercial risk, once again, this is something that's more company specific as your company's commercial hurdles may look different than another company's. And the commercial risk may look very different for something that's in the Gulf of Mexico versus in a true frontier province. So we're not going to be covering that as part of this course.
All right, so now that we've gone through that, what we'll be doing is we'll be moving on to an introduction into why geological risking is important and what some of the basics behind geological risking are. Look forward to seeing you in the next module.