When optimism fuels exploration, drillers pursuing the next billion-barrel discovery could burn through millions in capital only to find a marginal field.
That optimism—believing a specific prospect is a winner—can harm a company’s portfolio. The flip side, uncertainty about a reservoir’s depth, is yet another factor that can affect outcomes.
There are ways to avoid overconfidence and optimism regarding a prospect’s potential, and calling in an impartial outside voice can help rein in overly bullish resource estimates. Data can be used to neutrally assess a prospect’s potential and to reduce uncertainty about the reservoir’s location.
Optimism or Geology?
Optimistic and overconfident biases in pre-drill exploration and production forecasts can affect a company’s bottom line, Luciano Costa, consultant geologist at Petrobras, said while presenting at the 2025 SEG/AAPG International Meeting for Applied Geoscience & Energy (IMAGE) in Houston.
Optimism is defined as average outcomes lower than the average forecast, while overconfidence is when actual outcomes fall systematically outside the prediction range. An 80% confidence interval is often defined by the P10–P90 range.
Research has shown post-drill outcomes can be as many as 10 to 100 times smaller than pre-drill forecasts, he said.
“Prospect evaluators generate expectations with very high values in scenarios characterized by optimistic biases.
