Nest Egg....I think a geologist that specializes in reserve calculations provides the figures...I'm sure some production has to be done to get "proven" results....
Oil reserves refer to portions of oil in place (STOOIP) that are recoverable under economic constraints.
Oil in the ground is not a "reserve" unless it is economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally. The recovery factor (RF) is the percentage of STOOIP which is economically recoverable under a given set of conditions.
Proven, probable and possible reserves are the three most common categories of reserves. They represent the certainty that a reserve exists based on the geologic and engineering data and interpretation for a given location. The international authority for reserves definitions is generally the Society of Petroleum Engineers. The U.S. Securities and Exchange Commission has, in recent years, demanded that oil companies with exchange listed stock adopt reserves accounting standards that are consistent with common industry practice.
Oil reserves are primarily a measure of geological and economic risk — of the probability of oil existing and being producible under current economic conditions using current technology. The three categories of reserves generally used are proven, probable, and possible reserves.
Proven Reserves - defined as oil and gas "Reasonably Certain" to be producible using current technology at current prices, with current commercial terms and government consent, also known in the industry as 1P. Some industry specialists refer to this as P90, i.e., having a 90% certainty of being produced. Proven reserves are further subdivided into "Proven Developed" (PD) and "Proven Undeveloped" (PUD). PD reserves are reserves that can be produced with existing wells and perforations, or from additional reservoirs where minimal additional investment (operating expense) is required. PUD reserves require additional capital investment (drilling new wells, installing gas compression, etc.) to bring the oil and gas to the surface.
Probable Reserves - defined as oil and gas "Reasonably Probable" of being produced using current or likely technology at current prices, with current commercial terms and government consent. Some Industry specialists refer to this as P50, i.e., having a 50% certainty of being produced. This is also known in the industry as 2P or Proven plus probable.
Possible Reserves - i.e., "having a chance of being developed under favourable circumstances". Some Industry specialists refer to this as P10, i.e., having a 10% certainty of being produced. This is also known in the industry as 3P or Proven plus probable plus possible.
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