GEOHORIZONS

AUTHORS Zhuoheng Chen $ Geological Survey of Canada, 3303-33rd Street, NW, Calgary, Alberta, Canada T2L 2A7; zchen@nrcan.gc.ca Zhuoheng Chen, a research scientist at the Geological Survey of Canada (GSC), obtained his Ph.D. from the Norwegian University of Science and Technology in 1993 and held a position as an associate professor at China University of Petroleum (Beijing) before jointing GSC in 1998. He has developed methods for resource assessment and exploration-risk evaluation. His research interests include petroleum resource assessment (methods and applications), basin analysis, and gas-hydrate studies. Kirk G. Osadetz $ Geological Survey of Canada, 3303-33rd Street, NW, Calgary, Alberta, Canada T2L 2A7; kosadetz@nrcan.gc.ca Kirk graduated from the University of Toronto (B.Sc., 1978; M.Sc., 1983). He manages the Earth Science Sector Gas Hydrates Fuel of the Future Program and is head of the Laboratory Services Subdivision at the GSC in Calgary. He is active regarding petroleum resource evaluation and has research interests in gas hydrates, tectonics, and thermochronology. He worked previously at Gulf Canada Resources Inc. and PetroCanada Resources Inc. in Calgary.

Geological risk mapping and prospect evaluation using multivariate and Bayesian statistical methods, western Sverdrup Basin of Canada
Zhuoheng Chen and Kirk G. Osadetz

ABSTRACT The current practice of geological risk evaluation at the play level involves substantial subjectivity and rarely considers the spatial correlations among the identified prospects. A quantitative procedure using multivariate and Bayesian statistical methods is proposed, which treats exploration-risk evaluation as a two-group classification, to provide a more objective and reproducible result. The spatial correlation among the identified prospects is considered because the proposed approach is applied to the entire evaluation area. The exploration-risk evaluation of the Upper TriassicLower Jurassic Heiberg Group structural gas play in western Sverdrup Basin, Arctic Canada, illustrates the method.

ACKNOWLEDGEMENTS INTRODUCTION A meaningful exploration decision depends not only on a reliable estimate of resource potential, but also on a reliable geological risk evaluation of the exploration target. Geological risk analysis estimates the uncertainty in converting the anticipated resource potential in an identified prospect to an identified accumulation subsequent to exploratory drilling. Although large corporations may have proprietary tools for objective exploration-risk evaluation, the literature indicates that geological risk analysis commonly involves substantial subjectivity and uncommonly considers the spatial correlations This work was supported by the Geological Survey of Canada Project 950003 and the Panel for Energy Research and Development (Natural Resources Canada). Grateful acknowledgement is expressed to G. Stockmal of the Geological Survey of Canada, who provided a critical review of the original manuscript and made many helpful suggestions. This article benefited from the suggestions and comments of AAPG reviewers Colin Stabler, Joseph Studlick, and an anonymous reviewer. Geological Survey of Canada Contribution Number 2005342.

Copyright #2006. The American Association of Petroleum Geologists. All rights reserved. Manuscript received March 10, 2005; provisional acceptance September 12, 2005; revised manuscript received December 28, 2005; final acceptance January 16, 2006. DOI:10.1306/01160605050

AAPG Bulletin, v. 90, no. 6 (June 2006), pp. 859 872

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among the identified prospects (e.g., Otis and Schneidermann, 1997; Rose, 2001). Risk analysis starts with a play analysis, which examines all the essential geological elements necessary for oil and gas accumulation in a region (e.g., White, 1988, 1993) and subsequently assigns probability values to each essential geological play-forming element. The probability of exploratory success is the product of the probabilities of all the essential geological elements for petroleum accumulation at a specific prospect (White, 1988; Otis and Schneidermann, 1997; Snow et al., 1997; Rose, 2001). The use of the geographical information system (GIS) provides a tool that enables more rigorous play assessments (Hood et al., 2000). Several drawbacks to the conventional geological risk evaluation exist. First, there can be substantial subjective judgments involved in the probability assignments. In such assignments, favorability levels are judged using analogies for all the geological elements, and each favorable level corresponds to a range of probability values. For example, the unfavorable level may have a probability of 0.3 or lower, whereas the favorable level may correspond to a probability of 0.7 or higher (see table 4 of Otis and Schneidermann, 1997). Second, subjective judgments employed in risk evaluation may not be consistently applied or reproducible. For example, if independent assessments were conducted by different people, the probability values of the risk could vary significantly. A consistent and repeatable risk evaluation result is more desirable for consistent exploration decision-making processes. Third, methods in published literature do not explicitly consider spatial correlations among prospects in the analysis of geological risk. The consideration of spatial correlations among prospects is desirable because petroleum occurrence at a specific prospect is not an isolated event, but instead, it is a part of the result of similar geological processes in both the total petroleum system and the play. A better understanding of spatial variation of the objects and their spatial relationship to the presence of essential geological elements is important for geological risk analysis. Exploration-risk evaluation is to estimate the risk that an untested prospect could be dry (we define dry as noncommercially productive, including both nonpetroleum-bearing prospects and minor petroleumbearing accumulations), which is equivalent to estimating the uncertainty in a two-group classification. Tools that allow us to estimate this uncertainty quantitatively exist, such that we may infer the geological risk. In recent years, attempts have been made to evaluate geological risk by considering the spatial charac860 Geohorizons

teristics of exploration targets using spatial statistical tools and improved numerical manipulations of geographical information. Chen et al. (2000a, 2001, 2002, 2004) have proposed several techniques for the characterization of spatial variability of geological factors and for the estimation of petroleum accumulation probabilities at the play level. Gao et al. (2000) proposed an object-based method for estimating the probability of petroleum occurrence. Rostirolla et al. (2003) proposed the use of a Bayesian assessment of favorability for oil and gas prospects. Chen and Osadetz (in press) have used a geological model-based stochastic simulation for predicting the locations of undiscovered petroleum resources. In this article, we present a statistical procedure for a systematic geological risk analysis using Bayesian theory and multivariate statistics at the play level. We have applied the proposed method to the Heiberg Group structural petroleum play in the western Sverdrup Basin of the Canadian Arctic archipelago to evaluate regional exploration-risk variations. Combined with estimated prospect potentials, the untested prospects are subsequently ranked within this play.

METHOD DESCRIPTIONS Representation of Geological Variables In this study, the spatial variation of a geological variable is represented by a digital geological map, which is presented using a rectangular array of N pixels of equal size. The pixels are labeled as i = 1, 2,. . ., N. Suppose that there are m subsurface geological maps, m = 1, 2, 3. . . . At each pixel i on the kth geological map, the geological attribute x k(i) represents the average value of the geological attribute, such as formation thickness or structural residual. The kth geological map is specified by the vector, Y k = ( y (k,1),y (k,2),. . ., y (k,N )). In practice, the elements of a map are unknown, except at the sample points, such as well locations. To distinguish the sample points from the unknowns, we label the known components as x (k,1),. . ., x (k,n), n < N. The remaining points of Y, x (k,n + 1),. . ., x (k,N), correspond to the pixels where the map attribute is to be estimated. Kriging or other interpolation methods can be used to estimate the values at the unsampled locations. Maps, which are commonly employed as analytical results or even as data, are, in reality, themselves interpretations that do not commonly display the uncertainties and subjectivity involved in their construction.

Probability of Petroleum Occurrence The goal of geological risk analysis is to determine to what degree of certainty a potential drilling target may be either productive or nonproductive, based on available geological criteria. The risk analysis problem is equivalent to classification with uncertainty in a multivariate space. As such, the method is dependent on the availability of suitable data. The uncertainty associated with the classification represents the geological risk of a prospect being dry. The basic assumption for classification is that there are statistically significant differences in the characteristics among the different groups, whereas no significant differences exist within each of the groups. This assumption can be used to define, but is not limited to, the two statistical populations considered in this analysis. Depending on the objectives of the study, the categories of the classification could be two or three, as long as the definitions of the categories are consistently applied. For example, the two populations could be accumulations ( both economic and noneconomic, including shows) and non-petroleum bearing, or three populations such as economic accumulations, noneconomic accumulations, and dry. In this analysis, we discuss a classification problem with two populations as previously defined. The geological signatures that can be used to distinguish between these two populations diagnostically are the results of geological processes and conditions that are necessary for the formation of petroleum accumulations. Suppose that the nature of an area in a petroleum play is to be classified into two categories, the pro , and that ductive area, A, and nonproductive area, A the play was penetrated by n exploratory wells that represent a sample from the play. On the basis of n wells and other available geoscience information, we seek to estimate the probability with which each untested location belongs to one of the two defined categories. This estimation may take the form of a conditional probability upon m geological variables. Let G(r) denote the random vector of m geological variables containing information on the classification, and g(r) be the assumed values for variable G(r). The conditional probability that, for given observations G(r) = g(r), the area at location r belongs to A can be written as

where P(A,g(r)) is the joint probability of productive area A, and observations, G(r) = g(r); and P(g(r)) is the probability of G(r) = g(r).

Mahalanobis Distance In principle, we can use multivariate Bayesian statistics to derive a conditional probability of hydrocarbon occurrence at each untested location. However, in some circumstances, it is more convenient to employ a multivariate statistical method to integrate all the available geological variables and then to calculate the conditional probability. Mahalanobis distance (MD) is a multivariate statistical measure, which has been widely used in classification. In this study, MD, a distance in parameter space, is used to integrate the available geoscience data. The MD is defined in the following way. Let X denote the data consisting of p observations and m variables. The geological favorability of a location for petroleum accumulation is measured as the MD (Mardia et al., 1989), which is defined as
1 MD Xk Xs T S s Xk Xs

where X k is the kth row vector of X, or the kth observation; X s is the mean vector and (. . .)T is the transposed matrix of the training data set, such as the general characteristics of the petroleum accumulation sites (i.e., all productive wells); and S s is the covariance matrix of the training data set. Graphically, the MD is a standardized square distance between the geometric center of the group of known accumulations and an untested target relative to their geological characteristics in a multivariate space. The applications of the MD in hydrocarbon exploration were described by Harff et al. (1992) and Harbaugh et al. (1995). Taking MD as the measure of classification, the conditional probability in equation 1 can be rewritten as P A; Dr P Dr

P AjDr

P Ajg r

P A; g r P g r

where D(r) represents the MD between the geometrical center of the geological characteristics of the productive petroleum group and the geological characteristic vector at an untested location in a multivariate space. Chen and Osadetz 861

Criteria for Selecting Geological Variables in Risk Analysis Selecting geological variables that contain useful information for differentiating between potentially productive and nonproductive prospects is important for geological risk evaluation. In the exploration decisionmaking process, we wish to avoid two types of errors: (1) mistakenly assigning a high probability to a dry area, and (2) abandoning a potentially productive area without knowing its true value. We use a Bayesian conditional probability formulation to estimate the probabilities of these two types of errors in risk analysis. Let P(HCjFav) denote the conditional probability of petroleum occurrence given a favorable geological condition and let P(DryjUnfav) denote the probability of a tested and abandoned hole given an unfavorable condition. P(HCjFav) is the indicator for a high exploration success, its value indicating which prospects should be drilled; whereas P(DryjUnfav) is the indicator for the avoidance of loss of opportunity, its value indicating which prospects should be abandoned. A balanced exploration strategy for risk reduction would be to achieve a high exploration success without compromising the loss of opportunity. The product of these two probabilities, F(P hc,P dry) = P(HCjFav)P(DryjUnfav), provides a useful measure for optimizing the exploration strategy. The product can also be used as a criterion for selecting geological variables in the quantitative evaluation of exploration risk. The greater the F(P hc,P dry) value is, the more useful the variable could be in terms of differentiating productive and nonproductive targets. Examples of geologic variable selection are provided in the next section, which describes the application of this method to the Heiberg Group structural gas play in the western Sverdrup Basin of the Canadian Arctic.

GEOLOGICAL RISK MAPPING Exploratory History and Geological Setting The Sverdrup Basin in the Canadian Arctic region is a frontier basin with an area of about 310,000 km2 (19,660 mi2). Discovered total in-place reserves are 294.1 106 m3 (2.16 109 bbl) oil and 500.3 109 m3 (17.6 tcf ) gas, whereas estimated total potential resources include 540 882 106 m3 (3.96 6.47 109 bbl) oil and 12421423 109 m3 (43.950.2 tcf) gas (Chen et al., 2000b). Although unfavorable con862 Geohorizons

ditions (remote location, harsh environment, and lack of infrastructure) prohibit exploration and development activities currently, the growing demand for petroleum, particularly for natural gas, may make the Sverdrup Basin one of the most important frontier basins for future reserve additions in North America. The regional petroleum geology has been summarized by Embry (1991) and Waylett and Embry (1993). The stratigraphy and structural geology of the area are described by Balkwill and Roy (1977), Balkwill and Fox (1982), Balkwill (1983), Embry (1983), and Harrison (1995). The Sverdrup Basin is a major extensional basin underlying the Queen Elizabeth Islands of the Canadian Arctic archipelago and was a major depocenter through much of the late Paleozoic and Mesozoic. The stratigraphic succession, up to about 13,000 m (42,000 ft) thick, comprises Mississippian to early Tertiary marine and nonmarine strata. The discovered petroleum accumulations all occur within a broad fairway extending from western Ellef Ringnes Island southwestward to northeastern Melville Island (Figure 1) and are accumulated in structural traps. Oil and gas accumulations found to date are present mainly in the uppermost TriassicLower Jurassic porous sandstones of the Heiberg Group beneath thick, argillaceous strata of the Jameson Bay Formation (Figure 2). Seismically mapped structural closures and diapiric structures in the western Sverdrup Basin are illustrated in Figure 1. The amplitudes and closure areas decrease southwestward because of lessening deformation and thinning of the upper Mississippian and lower Pennsylvanian evaporites. A variety of salt structures, some of which rise to or near the sea floor and land surface, occur throughout the study area. These vary from circular diapiric domes to long salt walls (Balkwill, 1978, 1983; Balkwill and Fox, 1982). Salt pillows core many of the anticlinal structures that host petroleum fields. Two styles of structural traps are associated with existing discoveries in the Sverdrup Basin, representing two petroleum accumulation trends separated by Lougheed Island (Figure 1). The first trap style consists of a broad, low-amplitude flexure parallel to the southwestern margin of the Sverdrup Basin, which hosts two giant gas fields, Drake Point and Hecla. Stratigraphic pinch-out onto the southern flank of the basin appears to be a component of trapping in the Hecla field (Northern Oil and Gas Directorate, 1995). The other trap style consists of high-amplitude anticlines lying largely offshore of southwestern Ellef Ringnes Island and King Christian Island. They are of early Tertiary age developed or accentuated during the compressive Tertiary

Figure 1. Location of the study area and exploration results in the western Sverdrup Basin, Canadian Arctic Islands. Locations are described using latitude and longitude. Subsequent maps (Figures 7 9) display the same region using a Lambert projection (the central meridian of the projection is 111.5jW; base latitude is 49jN; Lambert lower standard latitude is 49jN; Lambert upper standard latitude is 77jN). Black = discoveries; dark gray = untested structures; hatched = salt diapirs; light gray = drilled structures.

Eurekan orogeny and aligned following the orogenic trend. Discoveries in this trap style include Kristoffer, Sculpin, Thor, Jackson Bay, Wallis, King Christian, Cape Allison, Cape MacMillan, Char, and Balaena. These structures are partly filled to about 10% of their closure, likely the consequence of surface seepage through extensive crestal faulting (Waylett and Embry, 1993). The discoveries at Skate and Maclean, offshore of eastern Lougheed Island, and the Whitefish gas discovery and the Cisco oil and gas discovery show a structural style in between the two described groups, where trap fill in these intermediate structures is in excess of 50%.

Data Ninety wells have been drilled to the Heiberg Group in the play area. Several types of geological data are collected from published literature and our own analysis for this study. The available geological data have

been grouped according to their significance for petroleum accumulation. The source rock data come primarily from published organic geochemistry analysis of handpicked cuttings and core samples from recognized source rock intervals (Powell, 1978; Goodarzi et al., 1989, 1993; Brooks et al., 1992; Gentzis and Goodarzi, 1993) and biomarker maturity parameters of discovered oils (Curiale, 1992). Because no strong geographical correlation is evident between individual elements of source rock data and petroleum occurrence in the basin (Chen et al., 2002), a petroleum expulsion intensity index from the source rock data calculated using Peppers (1990) model is used in this study. For details of how such an index can be estimated, see Pepper (1990) and Pepper and Corvi (1995). The reservoir quality data include reservoir thickness, net sand/shale ratio, and average reservoir porosity, which were derived from core analysis and well-log interpretations. A regional structural map of seismic reflection time to the top of Heiberg Group and an isopach of the thickness of top seal (Jameson Bay Chen and Osadetz 863

Figure 2. Stratigraphic distribution of discovered oil and gas reserves (right, oil 106 m3, unshaded; gas 106 m3 oil equivalents, shaded), and generalized stratigraphic chart (left), the western Sverdrup Basin, Canadian Arctic Islands.

Formation) are available, as well as the exploration results, including locations of the oil and gas discoveries (Figure 1), the size of discoveries (Chen et al., 2000b), as well as the locations and sizes of the untested known prospects (Figure 1). Other exploration information, such as borehole temperature, water salinity, and pressure measurements from drillstem tests, are also available publicly. Secondary information derived from the original data consists of a structural map, in depth, derived from seismic traveltime using Bayesian cokriging (Doyen et al., 1996) with formation depth observed in the wells; pressure gradient; hydraulic potential; magnitude of postgeneration uplift (estimated from geochemical data); and structure residuals. All well data are from the Geological Survey of Canada well information database. The geological variables used for the geological risk analysis are listed in Table 1. Because the Sverdrup Basin is a frontier basin and no commercial petroleum production occurs, the parameters for determining the commercial accumulation size are unknown for the existing discoveries. The in-place sizes of the discovered accumulations were estimated by the Northern Oil and Gas Directorate (1995), although the details of those calculations are not available publicly. In this application example, we use the terms discovery instead of productive, accumulation instead of field or pool, and tested and abandoned instead of dry in exploration-risk evaluations to avoid the confusion of commercial or geological success. The probability of hydrocarbon occurrence in the following case study is presumably relatable to a yetto-be-determined probability of commercial success. 864 Geohorizons

Geological Variable Selection To illustrate how a geological variable is selected for the geological risk analysis, we use the reservoir porosity of the Heiberg Group. The frequency distributions of the reservoir porosity from the tested and abandoned holes and discovery wells are displayed in Figure 3. Most of the discovery wells encountered in the reservoir have an average porosity greater than 10%. In contrast, the tested and abandoned holes generally have reservoir porosities less than 10%. We set 10% reservoir porosity as a threshold value for defining a favorable reservoir (>10%) or an unfavorable reservoir

Table 1. Conditional Probabilities and Favorability Function Values of the Geological Variables Variable Porosity Net thickness Net/gross Cap thickness Estimated uplift Effective source rock Pressure gradient Salinity gradient Structure Structure residuals Gross Thickness MD P(HCjFav) 0.60 0.49 0.54 0.81 0.72 0.70 0.60 0.68 0.55 0.74 0.43 0.93 P(DryjUnf) 0.78 0.73 0.70 0.55 0.64 0.60 0.67 0.51 0.63 0.63 0.50 0.89 Favorability 0.47 0.36 0.38 0.45 0.46 0.42 0.40 0.35 0.35 0.46 0.22 0.83

spect characterization, instead of petroleum system and migration pathway, provided the diagnostic geological parameters to be analyzed statistically. To calculate the Bayesian statistics, different threshold values for the geological variables are determined based on the frequency distribution characteristics, so that the likelihood of classification errors is minimized, which is equivalent to maximizing the value F(P hc,P dry). Table 1 lists all geological variables and associated Bayesian conditional probabilities and F(P hc,P dry) values. We set the F(P hc,P dry) value of 0.3 as a cutoff and take all the geological variables with F(P hc,P dry) value greater than 0.3 into consideration in the geological risk mapping. Figure 3. Frequency distributions of reservoir porosity of the discovery wells and tested and abandoned holes. ( 10%) for petroleum accumulation. The calculated P(HCjFav), P(DryjUnfav), and F(P hc,P dry) using equation 1 are listed in Table 1. P(HCjFav) = 0.6 implies that if an exploration target has a favorable reservoir condition, the chance of petroleum occurrence in that target could be 60%, whereas P(DryjUnfav) = 0.78 means that if the reservoir is unfavorable, the chance of it being tested and abandoned is 78%. In other words, the chance of success is 22%. Comparing the past average exploration success rate of 47% suggests that consideration of reservoir porosity in exploration target selection could improve exploration success. Therefore, reservoir porosity contains useful information for differentiating the location of accumulations from dry prospects. In the same way, all available geological variables, representing the essential geological elements necessary for petroleum accumulation in the play, were analyzed using the Bayesian statistical measures discussed above. The distribution characteristics for some of the variables are shown in Figure 4. The reservoir porosity, net/gross ratio, and thickness of cap rock and uplift appear to be good indicators for separating discoveries and tested and abandoned prospects. The gross formation thickness does not provide such a discriminating power. Our understanding of the petroleum system, with its source rocks in Middle Triassic bituminous strata, and the migration pathways into Upper Triassic and Lower Jurassic reservoirs, in the vicinity of the petroleum kitchen, is consistent with the results of the Bayesian analysis. The most important elements controlling significant accumulations are reservoir quality and cap-rock integrity. Therefore, we infer that proProbability Mapping In a multivariate space, the selected geological variables define the statistical characteristics of the samples, whereas each sample represents a vector in this

Figure 4. Distribution characteristics of some of the geological variables at the locations of discovery wells and tested and abandoned holes. Chen and Osadetz 865

space. Because we know exactly which population each sample belongs to, the statistical characteristics of each population can be represented by its mean vector. The MDs between the mean vector of the known discovery wells and the sample vectors of all wells drilled both discoveries and tested and abandoned were calculated. Figure 5 illustrates the frequency distribution characteristics of the MDs of the tested and abandoned wells, as well as the MDs of the discovery wells to the mean vector of the petroleum-bearing wells. In Figure 5, most of the discoveries show MD values less than 2.5. In contrast, most of the tested and abandoned wells appear to have MD values greater than 2.5. Defining an MD of 2.5 as the threshold value for classifying petroleum-bearing and tested and abandoned prospects, P(HCjFav), the conditional probability of petroleum occurrence given favorable conditions (MD < 2.5) is 0.93 (Table 1), whereas P(DryjUnfav), the probability of a tested and abandoned prospect given unfavorable geological condition, is 0.89. With P(HCjFav) = 0.93, it means that, for those prospects at the locations where MD values are less than 2.5, the exploratory drilling success rate could be 0.93, more than 46% higher than the average success rate (47%) in the play. The conditional probability for a tested and abandoned hole given unfavorable conditions, P(DryjUnfav) = 0.89, means that if a prospect lies at the location where the MD value is greater than 2.5, it is very likely that this prospect will be tested and abandoned (there is < 12% chance it could be a discovery). The F(P hc,P dry) value 0.83 suggests that MD is a very good indicator for distinguishing the categories in the classification:

the discovered accumulations versus the tested and abandoned holes. Comparing it with single geological variables in Table 1, the conditional probability values for MD are higher than any of the probability values from a single geological variable. The favorability function value of the MD is about 35% better than the best single geological variable (the value of 0.47 associated with reservoir porosity), suggesting that by combining several geological variables, the MD contains substantially more useful information for classifying discoveries and tested and abandoned holes in this play. The geological maps of the variable employed for the calculation of MD can be converted to an MD map. Figure 6 is an MD map, representing the geological condition for petroleum accumulation based on information from previous exploration. On this map, most of the well locations that were discoveries have MD values smaller than 2.5, whereas most of the locations that proved to be tested and abandoned holes show MD values greater than 2.5. For geological risk analysis, the uncertainty of a prospect containing hydrocarbons at a specific location is commonly expressed as the probability of hydrocarbon occurrence. The MD map can be converted into a conditional probability map based on Bayesian probability formulation in equation 3 and the frequency distributions in Figure 5. Figure 7 illustrates the probability of petroleum occurrence conditioned on the estimated MD values in Figure 6. The probability of petroleum occurrence of a prospect can be approximated using the average value of all probability values in the pixels covering the areal extent of that prospect and can be directly read from the map, representing the expected success rate at the prospect. Figure 8 illustrates the distribution of petroleum occurrence probability for the 68 identified prospects that have not yet been tested by drilling. Considering available geoscience data, about 75% of the untested prospects display high exploration risk (probability of petroleum occurrence < 0.25), whereas only about 11% of the prospects show low exploratory risk (probability of petroleum occurrence > 0.5).

Prospect Evaluation and Ranking Two essential estimates for the evaluation of an exploration prospect exist: the size of the potential resource and the exploration risk of encountering this size or greater. The exploration risk was calculated based on the probability map, which is 1 minus the probability value of the prospect, and the resource

Figure 5. Comparison of the distribution of MDs from tested and abandoned holes (dry) and the discovery wells. 866 Geohorizons

Figure 6. An MD map indicates the distance between known discoveries and unknown location (represented by pixel) in multivariable space, calculated using the pixel values on maps of selected geological variables as compared to the characteristics of known hydrocarbon discoveries.

potential for each prospect can be estimated based on the volumetric variables in the previous petroleum resource assessment (Chen et al., 2000b). Otis and

Schneidermann (1997) defined the exploration risk as 1 over the probability of hydrocarbon occurrence, which is a markedly different expression of risk. Figure 9 is the

Figure 7. Conditional probability map of petroleum occurrence based on the MD in Figure 6 and the classification of discovery wells and tested and abandoned holes in Figure 5. Chen and Osadetz 867

Figure 8. Cumulative distribution of the estimated conditional probability for the untested 68 prospects in the mapping area.

gas field size distribution in the Heiberg Group structural play for the 68 mapped but untested prospects (see Chen et al., 2000b for the whole gas field size distribution). In this estimation, the distributions of net pay and saturation were assumed as lognormal, and the parameters were estimated from a multivariate discovery process model (Chen et al., 2000b). Other volumetric parameters, such as closure area, porosity, reservoir temperature, and initial reservoir pressure, were directly read from relevant geological maps. The formulation of the reservoir volumetric equation for calculating the gas resource potential is presented in Chen et al. (2000b). The estimated mean field size is 8.4 109 m3 (296.6 bcf) of gas in place, and the mean value of the largest untested risked field size is 28.5 109 m3 (1 tcf) of gas in place. The untested prospects can then be ranked by different criteria based on the assessors belief or the companys risk tolerance and exploration strategy. Usually, the prospects are ranked by risked resource potential (Rose, 2001) or exploration costs (Joubert et al., 2001). Both of the criteria are meaningful if used for the formulation of different exploration strategies. Table 2 lists the top 36 prospects, whose risked gas resource potentials are greater than 109 m3(35 bcf) in place.

and the other lying between the Sabine Peninsula and the Mackenzie King Island, separated by the Lougheed Arch. The calculation is based on kinetic petroleum generation models and estimated absorption (Pepper, 1990; Pepper and Corvi, 1995). Because no volume measurements of the source rock interval are available, the calculation ends with an index of generation intensity, which is a measure for the spatial distribution characteristics of generation capacity. The lack of complete geographical correspondence between generation intensity and known petroleum occurrence indicates that lateral secondary migration is a significant factor in final petroleum entrapment. The discovered oil and gas reserves are almost equally distributed between the two sides separated by the arch, 408 106 m3 (2566 106 bbl) oil equivalents in the west and 386 106 m3 (2428 106 bbl) oil equivalents in the east. On the western side of the arch, however, the discovered gas reserve is approximately 300 109 m3 (1897 106 bbl) oil equivalents, but only 203 109 m3 (1277 106 bbl) oil equivalents on the eastern side. The existing discoveries indicate two oil-collecting centers: the area surrounding Lougheed Arch and the area offshore of southern Ellef Ringnes Island. Given the thermal maturity pattern, we expect that petroleum-bearing traps in the western part of the Hecla gas field, around the Lougheed Arch, as well as in the southeastern margin of the basin, are more likely to contain oil than gas. The locations of the top five prospects ranked by the risked natural gas potential are marked by dashed circles in Figure 7. The number beside the circle indicates the rank. As can be seen from the conditional

DISCUSSION On the estimated petroleum generation intensity index map (Figure 10), two major generation centers are apparent, one in the southern part of Ellef Ringnes Island 868 Geohorizons

Figure 9. Predicted gas pool size distribution for the mapped but yet-to-be-tested prospects in the mapping area.

Table 2. Untested Prospects Ranked by Different Criteria* Pool Size 106 m3 44,100 24,252 27,910 17,734 11,112 54,176 9714 10,534 37,235 32,574 23,305 6745 25,233 5956 21,697 4787 31,666 5014 5026 5026 3981 8994 7977 8194 5447 8084 4492 4362 2990 2991 2921 4480 15,945 2893 2335 1506 Probability 0.65 0.97 0.64 0.96 0.96 0.15 0.77 0.6 0.16 0.17 0.23 0.74 0.19 0.75 0.2 0.91 0.11 0.64 0.61 0.6 0.72 0.31 0.29 0.28 0.4 0.26 0.42 0.42 0.6 0.59 0.59 0.37 0.1 0.48 0.46 0.68 Risked Size 106 m3 28,478 23,577 17,858 16,972 10,697 8300 7450 6302 6027 5448 5262 4978 4677 4478 4424 4365 3428 3197 3059 3029 2883 2782 2307 2270 2193 2088 1909 1816 1805 1756 1738 1659 1617 1383 1069 1032 Easting 277024 96987.5 164334 89801 93237.4 22152.8 153177 163264 111082 57138.03 192549 84752.2 46059.09 109714 34169.22 135830 90713.5 78774.5 79240.1 138661 143503 33356.8 86310.1 33897.5 38642.2 189411 164298 247170 53064.5 55237.4 48376.1 343151 151371.8 51052.7 54420.3 113898 Northing 3014905 3177853 3079116 3168400 3170331 3253659 3059005 3091754 3114202 3213275 3063931 3078704 3103082 3085796 3104496 3170647 3098553 3062494 3088949 3036111 3048105 3086195 3134568 3194154 3076814 3052508 3100722 3047499 3070207 3066027 3076212 3031542 3246187 3062498 3148462 3053247 Ranking 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Ranking 2 3 16 34 12 13 26 30 32 1 24 35 25 5 29 8 23 33 14 28 18 27 4 20 19 6 36 31 21 10 9 11 2 22 7 15 17 Ranking 3 1 2 6 3 5 8 14 18 4 10 29 13 7 20 9 11 32 15 27 16 26 12 24 21 17 36 35 30 22 23 25 19 31 28 33 34

*Ranking 1 = based on risked potential; ranking 2 = based on unit well cost; ranking 3 = based on reserve and well cost.

probability map (Figure 7), the probability of exploration success for the Heiberg Group structural targets in the northwest of the basin is low (probability < 0.2) because of the lack of favorable reservoir intervals. The chances of exploration success in the northeast of the basin and the eastern part of the northeast margin of Ellef Ringnes Island are also small (probability < 0.2) because of unfavorable preservation conditions caused by the latest extensive tectonic activity and poor

reservoir quality because of diagenesis caused by deep burial and magmatism. The low-risk areas (probability > 0.5) on the probability map are concentrated in three zones: a northwest zone lies offshore of southwestern Ellef Ringnes Island and King Christian Island (zone I), coincident with the area where the existing discoveries in high-relief anticlines are situated; a second zone parallels the southwest basin margin (zone II), where the low-relief and high trap fill discoveries occupy its Chen and Osadetz 869

Figure 10. A petroleum generation intensity map derived from the analysis of organic geochemical variables. The higher values of this index, shown by higher numbers, indicate a greater intensity of petroleum generation.

eastern portion; a third zone trending north-northeast south-southwest connects the two zones described above across Lougheed Island (zone III). Among the three low-risk zones, zones I and II contain nearly the same volume of discovered natural gas, 223 and 233 109 m3 (7875 and 8228 bcf) in place, respectively. In zone III, only 77 109 m3 (2719 bcf) of gas was found in place. Areas with modest exploration risk are present (0.2 probability 0.5), which include the southeast margin of the basin and the western extent of zone III. The proposed method requires a database containing sufficient numbers of discoveries and tested and abandoned holes to treat geological risk analysis as an estimation of classification errors. The inferences of geological risk and petroleum resource potentials of the mapped prospects herein were based on current data and understanding. Additional data and information from future exploration will improve our understanding and change the geological maps. Risk and resource potential evaluations must therefore be updated to reflect improvements in geological models as a dynamic process. Determining the major geological factors in a play is essential for a successful evaluation of geological risk. The selection of geological variables for the probability calculation depends, to a large degree, on an under870 Geohorizons

standing of the key geological factors controlling the petroleum accumulation. The proposed Bayesian techniques and criteria provide quantitative means that find the essential geological controls and, thus, guide the selection of geological factors for the MD calculation. It is not important which geological variables should be included in the evaluation data matrix, but instead, the discriminating power of that set of variables that separates petroleum accumulations from the tested and abandoned prospects. Although risk evaluation results using different combinations of geological variables may vary, by minimizing the classification error using the proposed Bayesian techniques and criteria applying to the training data set, the variation is expected to be limited.

CONCLUSIONS The proposed approach to geological risk mapping results in a conditional probability map that depicts the spatial variation of comprehensive regional geological conditions favorable for petroleum accumulation, providing a systematic and consistent basis for risk analysis and prospect ranking. One can use both the conditional probability map and the estimated resource potentials of the untested prospects to highlight areas with high

resource potential and relatively low exploration risk, as illustrated by the analysis of the Heiberg Group structure play. Several advantages to the proposed method exist, including the following: 1. It considers spatial relationships among geological variables and prospects. The exploration-risk evaluation for the occurrence of petroleum accumulation in a specific prospect is related to the others in the same play where hydrocarbon accumulations were governed by the same geological processes. 2. All prospects are evaluated consistently and simultaneously using the same method, criteria, and data, resulting in reproducible and easily updateable results, which clearly reflect relative prospectivity. 3. The use of established, mathematically valid classification methods produces an objective result not affected by the bias of the assessor.

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