Abstract
This paper concerns itself with providing economic estimates for hydrocarbon Exploration when a sand is offset by a fault and when the downthrown part of the sand is later charged with hydrocarbons. The fault may leak, so that hydrocarbons can be transferred to the upthrown part of the sand body or may be leaked from the system and so lost. The costs of drilling the upthrown sand are usually less than those to drill the deeper sand. However, it is in general unknown what fraction of the original hydrocarbon charge is reassigned to the upthrown side and what fraction is leaked away. Also unknown is the probability that the fault leaks. The economic assessment is then made up of three possibilities: drill only the downthrown sand; drill only the upthrown sand; or drill both components of the sand. The concern is with estimating the best strategy to follow to maximize the value to be gained from the system. This paper shows how to provide such an economic assessment.
The more complex problem of hydrocarbons already in the sand before the fault occurs will be taken up in the next paper, together with uncertainties and their influence on assessed worth, when none of the potential gains, costs, leak probability, or the chance the sands were hydrocarbon charged, are known with any degree of precision. The dominance of each to the uncertainty of economic worth will also be considered.