The use of risk analysis in the oil and gas industry can take many forms. Whether it’s safety risk, economic risk or schedule-based risk, it is critical to know what risk factors exist and the likelihood that they may occur. Doing so allows decision-makers to plan in a manner that will ensure the highest attainable rate of success.
In his most recent Oil & Gas Monitor article Risk Analysis and Oil Production Curves, Palisade's Oil and Energy Industry Consultant, Rafael Hartke, invites us to learn more about modeling oil production curves in face of uncertainty. He focuses on the production curve risk of a single oil well by exploring how risk factors affect the production curve and some common mistakes one should avoid when modeling production curves of oil projects. Read the full article to find out how deterministic models using most likely values or using expected values, compare to a probabilistic method using distribution functions and Monte Carlo simulation.
In his next Oil & Gas Monitor article, Rafael will discuss what happens when dealing with the production curve of a group of wells and the statistical differences between a single well and a portfolio.