1. n. [Reservoir Characterization]

An approach to performing risk analysis on any project with uncertain input data. Generally, numbers are selected from representative input data and then used in iterative, CPU-intensive calculations to find the most likely outcome and the range of probable outcomes. The uncertainty in the output also provides a measure of the validity of the model. The technique is applied to financial investment portfolio and investment risk analysis as well as scientific applications. Monte Carlo analysis methods are used in the oil field to estimate the risks involved in new exploration projects, evaluation of development schemes and evaluation of validity of reservoir models.