Brief: risk analysis and Monte Carlo simulation applied to the generation of drilling AFE estimates

Abstract

This paper presents a method for developing an authorization-for-expenditure (AFE) -generating model and illustrates the technique with a specific offshore field development case study. The model combines Monte Carlo simulation and statistical analysis of historical drilling data to generate more accurate, risked, AFE estimates. In addition to the general method, two examples of making AFE time estimates for North Sea wells with the presented techniques are given.