Myth of the Prospector Lingers

The Power of Myths

Joseph Campbell showed us the power of myths: They inform, guide and sustain us in key functions of our lives — relationships, spirituality and work.

The petroleum explorationist’s version of the Hero Journey is the “Prospector Myth.” We are inspired by the image of the courageous lone prospector who struggles against Mother Nature, skeptical associates and financial hardships before succeeding, finally, through persistence, faith and luck to achieve vindication, fame and wealth. Justifiably, we reserve our greatest respect for such people in our Industry.

Petroleum exploration ventures are characterized by daunting uncertainty, which can be reduced (but not eliminated) through costly geotechnology and seasoned judgment. Prospectors invest intense physical and mental energy, patching together possible portraits of the subsurface, then selling and defending the economic ventures that arise from their imagination and labor.

Because exploration is dominated by subjectivity and uncertainty, it invites the exercise of intuition. And when geotechnical intuition is rewarded with success, the prospector’s ego is affirmed.

Discovery is heady stuff — we cherish the Prospector Myth!

Consequently, it is not surprising that most explorers are over-optimistic. After all, such true believers hardly could be expected to be objective about their prospects! The Prospector Myth is the primary reason why explorationists persistently overestimate the reserve potential of their prospects.


But the process by which oil and gas prospects are translated into economic ventures also contributes to over-optimism.

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Joseph Campbell showed us the power of myths: They inform, guide and sustain us in key functions of our lives — relationships, spirituality and work.

The petroleum explorationist’s version of the Hero Journey is the “Prospector Myth.” We are inspired by the image of the courageous lone prospector who struggles against Mother Nature, skeptical associates and financial hardships before succeeding, finally, through persistence, faith and luck to achieve vindication, fame and wealth. Justifiably, we reserve our greatest respect for such people in our Industry.

Petroleum exploration ventures are characterized by daunting uncertainty, which can be reduced (but not eliminated) through costly geotechnology and seasoned judgment. Prospectors invest intense physical and mental energy, patching together possible portraits of the subsurface, then selling and defending the economic ventures that arise from their imagination and labor.

Because exploration is dominated by subjectivity and uncertainty, it invites the exercise of intuition. And when geotechnical intuition is rewarded with success, the prospector’s ego is affirmed.

Discovery is heady stuff — we cherish the Prospector Myth!

Consequently, it is not surprising that most explorers are over-optimistic. After all, such true believers hardly could be expected to be objective about their prospects! The Prospector Myth is the primary reason why explorationists persistently overestimate the reserve potential of their prospects.


But the process by which oil and gas prospects are translated into economic ventures also contributes to over-optimism.

In the early days of exploration, basins were lightly drilled and many giant fields awaited discovery. Many prospectors were indeed solitary individuals or small firms. Their investors were private investors and corporations who were more or less knowledgeable about petroleum exploration. Caveat emptor was the prevailing ethic, because subscribing sponsors were expected to judge the true merit of each deal.

So the operative criterion was to sell the deal, to get the well drilled. Have faith: Success is bound to eventuate, given persistence and enough trials — remember, one success will carry a dozen failures. Promotion trumped professionalism.

Unfortunately, this same tradition still operates in some offices (even throughout whole companies) despite the fact that the professional employees of such publicly owned firms are “selling their deals” to their own managements — and thus to their own stockholders!


Since about 1986, things have been changing — especially among public corporations that participate in many ventures each year, and thus are actually managing a portfolio of risk ventures. They see exploration as a repeated-trials game. Scientific objectivity, professional ethics, the declining resource base and the need for delivery of promised performance together collided with the Prospector Myth and its attendant salesmanship.

Even so, influenced by the Prospector Myth, our industry wasted a lot of money on undiscriminating frontier exploration from the late 1970s into the early 1990s. Shell, Mobil and Amoco each reported that frontier exploration in this period destroyed value rather than creating it!

We lost credibility with directors, and we lost money for our stockholders.

By the 1990s, exploration was becoming global in scope and needed badly to become more efficient:

  • Seismic breakthroughs improved our performance substantially.
  • Deep-water technologies opened up new offshore areas.
  • Drilling and completion advances made mediocre reservoirs commercial.
  • Consistent, objective, probabilistic procedures for assessing prospect reserve potential and chance of success began to constrain the optimistic exuberances indulged by intuition and the Prospector Myth.

Today, most substantial companies consider inventories of many projects from which they select their annual drilling portfolios, comprising those prospects that together offer the best chance of achieving key corporate goals. We try to manage exploration by managing the exploration portfolio.

With this concept comes the realization that each opportunity must be assessed consistently and objectively. The inherent uncertainties can be dealt with using geotechnology and geostatistics.

What kills the portfolio is bias, which overvalues some prospects, so the value of the portfolio is not optimized. Unconstrained, the Prospector Myth short-changes the stockholder.

Nevertheless, many experienced prospectors still find it difficult to accept that systematic portfolio management selects a better mix of prospects than does their personal intuition.


So, as professional explorationists, we have a dilemma — reconciling the energy and inspiration generated by the Prospector Myth with the systematic probabilistic evaluation of prospects that enables the portfolio to deliver what was promised to the stockholders.

Pragmatic measures employed commonly in the past proved to be ineffective:

  • Assigning engineers to be “economic gatekeepers” for exploration projects.
  • Arbitrarily elevating the discount rate to compensate for risk.
  • Employing “Hidden Hurdles” in higher levels of the decision-chain to screen out “inferior” projects.

Trouble was, prospectors became adept at sniffing out such screening measures, and devising ingenious ways to generate geotechnical numbers adequate to get their prospects drilled. Explorationists in top management exercised their own privileged intuition in the prospect selection process. And since almost no one kept systematic records documenting actual results (compared with geotechnical predictions), everyone in the chain — prospectors, engineers, local managers, and senior executives — could avoid facing the consequences of widespread systematic bias!

But we really are getting better. Professional explorationists now routinely accept two responsibilities:

  • Finding oil and gas prospects.
  • Measuring them objectively.

We routinely examine our mistakes and calibrate our predictions. The manifest need for objectivity stimulates a long overdue concern about professionalism.


Some prospectors today mourn the diminished influence of the Prospector Myth. But increasingly, astute explorers acknowledge the need for increased exploration efficiency as the global resource base continues to shrink.

Systematic risk analysis must go hand-in-hand with sophisticated geotechnology.

But the Prospector Myth stills lingers, and properly so, if it can inspire our courage, persistence and imagination in petroleum exploration, without biasing our prospect evaluations.

Our ongoing challenge is to harness the energy of the Prospector Myth without compromising our scientific integrity and business objectivity.


Recommended Reading: Wealth and Democracy, by Kevin Phillips (2002, Broadway Books). What are the necessary and appropriate constraints that democratic societies should place on the functioning free market so as to balance its benefits against the excesses that can harm an open society? A thought-provoking, fact-loaded book that forces serious evaluation about limits on the free market.

Read it, you’ll like it!

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