Risk adjusted economic evaluation of projects and portfolios has evolved considerably over the last two decades. Traditional deterministic project economic evaluations have proven to be wholly inadequate for the purposes of understanding economic outcomes of both projects and portfolios. As a result, non-deterministic models have become the norm in oil & gas economic evaluation and decision analysis, including decision tree analysis, Monte Carlo simulation, etc. which are used to solve specific types of investment decisions. However, these traditional non-deterministic models and methods have their own limitations, because they do not always perform well in quantitative risk analysis.
In recent years, many international oil companies have introduced S-curve analysis to provide a more comprehensive view of project and portfolio risk. S-curve analysis provides a more quantitative measurement of project economic risks and an addition tool to assist with decision-making.
Thales Energy has created an S-Curve Analysis application, which is the first commercial product on the market. This application provides a powerful calculation engine and an interactive S-curve visualization tool which looks at numerous economic metrics.
For more insights, please download our S Curve Analysis memo.