In the January 11,1988,issue of the Oil&Gas Journal, R.A.Baker
describes how the Bayesian approach can be used to revise probabilities
that a prospect field will produce oil. In one case he describes,
geological assessment indicates a 25% chance the field will produce
oil. Further,there is an 80% chance that a particular well will strike
oil given that oil is present on the prospect field.
Suppose that one well is drilled on the field and
it comes up dry. What is the probability the prospect field will
produce oil?
If two wells come up dry, what is the probability
the field will produce oil?
The oil company would like to keep looking as long
as the chances of finding oil are greater than 1%. How many dry wells
must be drilled before the field will be abandoned
If the first well produces oil,what is the chance
the field will produce oil?
Answered by Andrei Volodin and Penny Nom.
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