🛢️ OilyGiant — Optimal Oil Well Location Prediction

📘 Overview

This project helps OilyGiant Mining Company identify the most profitable region for developing new oil wells.
Using geological data from three regions, a Linear Regression model predicts oil reserves, estimates potential profits, and evaluates investment risks using bootstrapping.

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🚀 Project Steps

1. Data Preparation

• Load and preprocess geological data for three regions:
  • geo_data_0.csv
  • geo_data_1.csv
  • geo_data_2.csv
• Each dataset contains:
  • id — unique oil well identifier
  • f0, f1, f2 — geological features
  • product — actual oil reserve volume (thousand barrels)

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2. Model Training

For each region:

• Split the data into 75% training and 25% validation sets.
• Train a Linear Regression model to predict oil reserves.
• Evaluate model performance using RMSE and the average predicted reserve volume.

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3. Profit Calculation

• Budget: $100 million for 200 wells.
• Revenue per thousand barrels: $4,500.
• Select the top 200 wells with the highest predicted reserves.
• Calculate the total profit for each region.

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4. Risk Assessment

• Apply Bootstrapping (1,000 samples) to estimate:
  • Average profit
  • 95% confidence interval
  • Probability of loss (negative profit)
• Only regions with a risk of loss < 2.5% are considered.
• Choose the region with the highest mean profit and acceptable risk.

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🛠️ Tools & Libraries

• Python
• Pandas
• NumPy
• Scikit-learn
• Matplotlib
• Seaborn

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📈 Outcome

The project delivers a data-driven recommendation for selecting the optimal region to develop new oil wells — maximizing profitability while minimizing financial risk.

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📁 Data

File	Description
geo_data_0.csv	Geological data for region 0
geo_data_1.csv	Geological data for region 1
geo_data_2.csv	Geological data for region 2

⚠️ All datasets are synthetic and provided for educational and analytical purposes.

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🧮 Key Assumptions

• Only Linear Regression is used for predictions.
• Each exploration studies 500 points, and the best 200 are developed.
• Development budget: $100 million.
• Revenue per unit (thousand barrels): $4,500.

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📊 Results

• Predicted oil reserves and RMSE per region.
• Estimated profits with confidence intervals.
• Final recommendation for the most profitable, lowest-risk region.

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🏁 Conclusion

This analysis enables OilyGiant to make a data-informed investment decision, identifying the region with the highest expected profit and minimal financial risk.