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Making Better Exploration and Appraisal Decisions Using Modern Asset Valuation Methods
17th Annual Conference of the International Association for Mathematical Geosciences
06 September 2015, Freiberg, Germany
Dr. Laughton and "Prof.Gordon Kaufman"will be giving "a one-day workshop" The abstract is as follows.
In the morning we overview asset valuation techniques developed over the last 40 years. Modern asset valuation techniques allow firms in extractive industries to make better assessments of exploration and appraisal alternatives than are afforded by methods currently employed by most exploration and development firms. New developments include:
- detailed models of the joint dynamics of uncertainty resolution in geological and commercial variables that underpin uncertainties in mineral asset values.
- optimization techniques that allow firms to consider complex decision tree models of exploration and appraisal decision alternatives.
- an approach to valuation that allows a refined determination of how financial markets value risk. This approach overcomes several biases present in current decision-making processes deployed by many firms—biases against activities such as exploration that have long-term payoffs in particular. To bootstrap understanding participants will work through a short series of examples.
In the afternoon we work with participants on techniques outlined in the morning to analyze a stripped down but still realistic sequential appraisal drilling decision in an offshore oil field. We show how to “boil down” complex geologic and economic attributes of a mineral deposit to a few key uncertain state variables compatible with a decision tree analysis that we perform.In the afternoon we work with participants on techniques outlined in the morning to analyze a stripped down but still realistic sequential appraisal drilling decision in an offshore oil field. We show how to “boil down” complex geologic and economic attributes of a mineral deposit to a few key uncertain state variables compatible with a decision tree analysis that we perform.
Information about the meeting is available - here.
Please contact us if you have any questions or comments.
