4. Conclusion
We propose a model that incorporate Six Sigma with Bayesian inference and Newsvendor model to build a stochastic prediction model for oil and gas drilling cost estimation. Typically, oil and gas companies rely on expert opinion and deterministic approach which has its limitations. One major limitation is that it does not incorporate uncertainties which surround the drilling process. In addition it is subjective and leads to over or under estimation. The end result of the framework is to incorporate expert opinion, historical data, and uncertainties to produce an optimal forecast using Newsvendor model once the cost distribution is obtained from expert belief.