Persistent Bias in Probabilistic Production Forecasting and Simple Methods to Overcome It
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***** Distinguished Lecturer *****
Society of Petroleum Engineers Western Australia is proud to present the details of our February 2026 SPE WA Technical Evening Meeting.
***** Please Note Venue Change *****
New Venue: Pulse Technology Hub, 915 Hay St. Perth
About the Presentation:
Unbiased probabilistic production forecasts are a crucial component in making value-creating investment decisions, but typical methods result in persistent, value-destroying biases. There are quick and easy ways to make accurate, unbiased forecasts.
Increased awareness of uncertainty, combined with increasingly sophisticated tools and models for quantifying it, is causing a shift from deterministic to probabilistic production forecasting. For these forecasts to lead to better investment decisions (e.g. assessing how much it’s worth paying to reduce uncertainty, or incorporating flexibility to manage it), they need to be an accurate (unbiased) representation of the uncertainty. However, our industry has a general history of overconfidence (ranges too narrow) and, more damaging for value creation, optimism (consistent over-estimation).
A large dataset of historical probabilistic production forecasts was investigated for potential bias by comparing them with actual outcomes. They were found to be both optimistic and overconfident, bringing into question their usefulness for decision-making and the value of the sophisticated uncertainty modeling techniques that were used to generate them.
Fortunately, there are quick and easy methods for creating accurate probabilistic forecasts. We describe these and show that they would have produced accurate forecasts for our case study fields (they do not make use of knowing the actual outcomes!).
Finally, preliminary results from a similar analysis of renewables projects indicate that the same problems exist. This could significantly impact government and company investment decisions and policy development in renewable projects.
About the Distinguished Lecturer:
Reidar Bratvold is a Professor of Investment & Decision Analysis at the University of Stavanger, specializing in decision analysis, data analytics, and behavioral challenges in decision-making. After 15 years of industry experience in technical and leadership roles, Reidar transitioned to academia, where he has contributed significantly to his fields of expertise. He co-authored ‘Making Good Decisions,’ has served as an SPE Distinguished Lecturer, and received the 2017 SPE Management & Information Award. A Fellow of the Society of Decision Professionals and the Norwegian Academy of Technological Sciences, Reidar earned his PhD in Engineering and MSc in Mathematics from Stanford University.
About the Event
Price: Early Bird SPE Member $65 <Until 3 February 2026>
Early Bird Non-Member $80 <Until 3 February 2026>
SPE Member $75
Non-Member $90
Date: Tuesday, 10 February 2026
Location: Pulse Technology Hub
Address: 915 Hay St, Perth WA
Time: 4:45pm – 5:00pm Registration & Networking.
Time: 5:00pm – 5:50pm Opening remarks and presentation.
Time: 5:50pm – 6:00pm Q&A Session.
Time: 6:00pm – 7:30 pm Networking drinks & nibbles.
Free tickets are available for Students. SPE WA in conjunction with our sponsors is kindly sponsoring students to attend the monthly technical events. Please apply through your Student Chapter.