Just made another £304 on oil futures.

[The_Equalizer]

Ok, so maybe you aren't ramping it. But, sure as eggs is eggs somebody somewhere is. Honestly I wish you luck, everybody has to have their teenbagger somewhere. But I think you seriously underestimate the risks involved.

One of the Oil minnows works out from time to time - but for each one that does a lot fall by the wayside. When they do they are very lucrative. I just wonder who sponsored that broker report too (not that I've bothered to read it).

It's a bit more than a random punt. Here's a recent one from the Torygraph (which everyone on here seems to love):

http://www.telegraph.co.uk/news/worl...h-economy.html

[The_Equalizer]

I read the report out of curiosity, it's actually fairly well balanced. For example.





It also details the various prospects being explored and gives chances of success of 27% at best and down to 8% at worst.

So potetentially your taking a punt with potentially a less than a 10% chance of winning. Better odds than the lottery but still..

Not quite so. This is the risk per field drilled and they are drilling a few. I think the odds are about 90% of getting lucky on one in which case it's quids in. So, yes, bit of a gamble, but not quite 10%.

[EternalOptimist]

Not quite so. This is the risk per field drilled and they are drilling a few. I think the odds are about 90% of getting lucky on one in which case it's quids in. So, yes, bit of a gamble, but not quite 10%.

A semi gamble

[DaveB]

Not quite so. This is the risk per field drilled and they are drilling a few. I think the odds are about 90% of getting lucky on one in which case it's quids in. So, yes, bit of a gamble, but not quite 10%.

I think you are being a little over optimistic there. These are independant events, failure of one does not increase the chances of the next suceeding.

I reckon you have around an overall 18% chance of success on any one of the fields being prospected.

[The_Equalizer]

I think you are being a little over optimistic there. These are independant events, failure of one does not increase the chances of the next suceeding.

I reckon you have around an overall 18% chance of success on any one of the fields being prospected.

That's fine then as DES intend to drill six. In the same way that the chance of winning any prize on the Premium Bonds is about 1/25000 each month. With the full allowance of £30k, you're more than likely to win a prize every month. Not guaranteed mind you!

[The_Equalizer]

A semi gamble

Is a gamble like something being unique? Never was any good at English.

[AlfredJPruffock]

Gambling only pays when youre winning

The Market giveth
The Market taketh away

[DaveB]

That's fine then as DES intend to drill six. In the same way that the chance of winning any prize on the Premium Bonds is about 1/25000 each month. With the full allowance of £30k, you're more than likely to win a prize every month. Not guaranteed mind you!

Doesnt work like that. You have no oppotunity to increase your chances of winning by increasing your stake.

There are six opportunities for success, each independent of the others, each with a different probability of success.

At the start of the drilling process you have a 27% chance of success assuming they start with the most likely prospect.

If this fails you now have a 23% chance of success, then 23% again, then 11%, 11% again, then 8%.

At no point are your chances of success better than 27%.

It's counter intuative, but there is no cumulative effect. Each event has it's own probability for success, unaffected by anything else that happens.
By your analogy, by the time you get to the 8% chance it should be almost certain to happen, it isn't.

If you tot up all the chances of success against all the chances of failure as percentages you get :

Total pool of possible outcomes = 600
( 6x100% chance that a result, good or bad, will occur).

Total pool of good outcomes = 27+23+23+11+11+6 = 106

Chance of any one event from the pool of possible events being good = (106/600)*100 = 17.6%

[EternalOptimist]

Is a gamble like something being unique? Never was any good at English.

To a total non-gambler, the concept of a semi-gamble doesn't make sense, so it's interesting.
It's because I equate gambling with risk I suppose, I can only see non-risk or risky. Black and white.
You were hinting at a shade of grey , so I was interested


I sought of imagined a scenario like 'wow this ten pound note is heavy, i will throw it down the grid. No wait, i will buy lottery tickets instead.'

[The_Equalizer]

Doesnt work like that. You have no oppotunity to increase your chances of winning by increasing your stake.

There are six opportunities for success, each independent of the others, each with a different probability of success.

At the start of the drilling process you have a 27% chance of success assuming they start with the most likely prospect.

If this fails you now have a 23% chance of success, then 23% again, then 11%, 11% again, then 8%.

At no point are your chances of success better than 27%.

It's counter intuative, but there is no cumulative effect. Each event has it's own probability for success, unaffected by anything else that happens.
By your analogy, by the time you get to the 8% chance it should be almost certain to happen, it isn't.

If you tot up all the chances of success against all the chances of failure as percentages you get :

Total pool of possible outcomes = 600
( 6x100% chance that a result, good or bad, will occur).

Total pool of good outcomes = 27+23+23+11+11+6 = 106

Chance of any one event from the pool of possible events being good = (106/600)*100 = 17.6%

Perhaps we are talking about different things here? Desire are drilling six different prospects, the best well has a 27% chance of success and the worst 8%- see page 11 here:

http://www.desireplc.co.uk/pdfs/Desi...nal_Report.pdf

Even if they only drilled the first well they've got a 27% chance of success so how can it only be 17.6% of any of the six working out?

They don't need all to work out, just one would mean a tidy profit. If all six did - as I think you presume is required - then it would really would be happy days.