Month: July 2009

Proved reserves established in a yet non developed reservoir that can be in proximity to or juxtaposed with a reservoir in which there are proven, developed and producing reserves. Proved undeveloped reserves are those proved reserves that are expected to be recovered from future wells and facilities, including future improved recovery projects. Under the new SEC rules (end 2009), Proved Undeveloped Reserves may be classified as proved undeveloped if there is a high degree of confidence that the quantities will be recovered

The net movement in proved reserves during the year includes extensions, discoveries and reclassifications, additions and disposals and revisions to previous estimates. Included within these movements is the net effect of changes in year end prices

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” an O&G company can review proved oil and gas properties and other long-lived assets for impairment when events and circumstances indicate a decline in the recoverability of the carrying value of such properties, such as a downward revision of the reserve estimates or sustained decrease in commodity prices. The future cash flows expected in connection with the properties are estimated and compared with such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amounts of the properties exceed their estimated undiscounted future cash flows, the carrying amount of the properties is reduced to their estimated fair value. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, available market data associated with the property or similar properties, future commodity prices and operating expenses, timing of future production, future capital expenditures and a risk-adjusted discount rate

Oil and gas reserves that can be produced at a level of probability as determined by SEC and by the Society of Petroleum Engineers and World Petroleum Council. See also proved reserves

Quantity of energy sources expected to be recovered from an existing well with the existing equipment and under the existing operating conditions

Proved reserves that are being uplifted by a development drilling

Proved reserves that are in place in a producing field but for which commercial development has not yet started. Production is taking place in another reservoir in the same field, but these reserves have been classified as closed behind-pipe reserves and development will only start after the other reservoirs are near depletion

Proved reserves developed or immediately available to be developed