Track: Decision & Risk Analysis
Decision Analysis for Lone Star Drill: Graphics and Explanations that Lead to Good Decision Quality
A critical component of high decision quality is commitment to action. That in turn relies on decision makers who understand the results of analyses. We will show and discuss various graphics that cover basic economics of a two gas well program in continuous space using Monte Carlo, but then expand the evaluation to include options to develop the second well based on the value of information. We will show and discuss Cumulative Distribution Charts, Capital Efficiency Charts, Minimum Functional Objectives, Probabilistic Tornado Charts, Distribution of the Value of Information, and trade-offs (risk and reward) among key decision metrics. The examples will focus on investment efficiency and net present value as decision criteria. The direction of the session will partially depend on the interests of the participants. Time permitting, we will expand to correlate the two wells and review the impact on the decision policy and economics. The Excel file, which uses no VB or macros, will be available.