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Optimal Stopping in Oil Exploration with Small and Large Oilfields

Published online by Cambridge University Press:  27 July 2009

Lakdere Benkherouf
Lakdere Benkherouf
Affiliation:
School of Management and Economic StudiesThe University of Sheffield, Sheffield S 10 2TN, England
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Abstract

The same applies when a success occurs in large fields; in this case, p1 = 0. If at least one success occurs in each oilfield after a certain number of wells are drilled, then we reach a position where the number of undiscovered fields is represented by simple Euler distributions, and the results of Section 4.1 showed that the optimal rule is a one-step look-ahead rule.

Type
Articles
Information
Probability in the Engineering and Informational Sciences , Volume 4 , Issue 3 , July 1990 , pp. 399 - 411
Copyright
Copyright © Cambridge University Press 1990

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References

REFERENCES

Beale, E.M.L. (1986). Optimization in oil and gas exploration. I.M.A. Journal of Applied Mathematics 36:1–10.Google Scholar
Benkherouf, L. & Bather, J.A. (1988). Oil exploration: Sequential decisions in the face of uncertainty. Journal of Applied Probability 25: 529–543.Google Scholar