A Discovery Process Model for Use in Oil and Gas Supply Modelling
Authors: Bowers B. 
Published: March 2010

Abstract
A play-by-play geological assessment of the remaining petroleum resources and historical records for past drilling and discoveries of a basin provide the basic information for assessing the future supply potential of a basin. Estimates are made of the number of wells required for the development of each prospect identifi ed by the geological assessment and the associated supply costs. A discovery process model can be used to project future discovery rates and associated costs of the basin development. Alternatively, these projections can be derived by extrapolation of trends in the historical discovery rates and supply costs with the constraint of the geologically estimated ultimate recoverable potential. Various mathematical formulae have been used to make these extrapolations.
This paper proposes a discovery process model that provides approximate consistency with the projections of discovery rates and supply costs derived from the extrapolations of trends in the historical data. The model is estimated using the results of a detailed assessment of the wells required to develop the individual prospects given by a play-by-play geological assessment and the associated supply costs. The Canadian Energy Research Institute recently used the proposed discovery model in a study of the Canadian natural gas supply potential.

Introduction
The purpose of an oil and gas supply model is to provide projections of oil and gas supplies from a basin or region for alternative market and fiscal inputs. A play-by-play geological assessment of the remaining petroleum resources and historical records for past drilling and discoveries of the basin or region provide the basic information for such a model.
A comprehensive supply model requires the simulation of the following four processes. Each of these simulations is referred to as a "model."The prospect model-a simulation of the extraction process for an individual prospect identified by the geological assessment, which together comprise the remaining resources of the region. For each prospect, this simulation provides estimates of the numbers of development wells, the production, the total recovery, and the associated supply costs for the extraction of the resource from the prospect.The discovery model-a simulation of the discovery process for individual prospects identified by the geological assessment. The model relates cumulative wells drilled and supply costs for extraction to cumulative discoveries.The activity model-a simulation of the decision making process for drilling activity. The model provides an estimate of annual drilling and thereby, using the functions provided by the discovery model, determines annual reserves additions for the region and supply costs for the extraction of these resources.The production model-a simulation of the production process. The model provides a projection of future production volumes for the region.
The simulation of the discovery process is the focus of this paper. When a play-by-play geological analysis is available to provide the detailed data required for prospect modelling, traditional approaches to discovery modelling are based on the ordering of ndividual prospects.