CRUDE OIL CLASSIFICATION AND BENCHMARKS
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figments of the imagination. The terms undiscovered reserves or
undiscovered resources should be used with caution, especially
when applied as a means of estimating reserves of petroleum
reserves. The data is very speculative and regarded by many energy
scientists as having little value other than unbridled optimism.
Probable reserves are those reserves of petroleum that are nearly
certain but about which a slight doubt exists. Probable reserves are
based on median estimates, and claim a 50% confidence level of
recovery. Industry specialists refer to this as P50 (i.e. having a 50%
certainty of being produced), which is also referred to in the industry as 2P (proved plus probable).
Possible reserves are those reserves of petroleum with an even
greater degree of uncertainty about recovery but about which there
is some information. Possible reserves have a less likely chance of
being recovered than probable reserves. This term is often used
for reserves that are claimed to have at least a 10% certainty of
being produced (P10). Reasons for classifying reserves as possible
include varying interpretations of geology, reserves not producible
at commercial rates, uncertainty due to reserve infill (seepage from
adjacent areas), and projected reserves based on future recovery
methods. This is referred to in the industry as 3P (proved plus probable plus possible).
An evaluation of proved, probable, and possible natural gas
reserves naturally involves multiple uncertainties. The accuracy of
any reserves evaluation depends on the quality of available information and engineering and geological interpretation. Based on
the results of drilling, testing, and production after the audit date,
reserves may be significantly restated upwards or downwards.
Changes in the price of natural gas, gas condensate or crude oil
may also affect our proved and probable reserves estimates, as well
as estimates of its future net revenues and net present worth. This
is because the reserves are evaluated, and the future net revenues
and net present worth are estimated based on prices and costs as of
the audit date.
Recently, an additional term — potential reserves — is also used
on occasion; these reserves are based upon geological information
about the types of sediments where such resources are likely to occur
and they are considered to represent an educated guess. The term
inferred reserves is also commonly used in addition to, or in place
of, potential reserves. Inferred reserves are regarded as of a higher
degree of accuracy than potential reserves, and the term is applied
115
figments of the imagination. The terms undiscovered reserves or
undiscovered resources should be used with caution, especially
when applied as a means of estimating reserves of petroleum
reserves. The data is very speculative and regarded by many energy
scientists as having little value other than unbridled optimism.
Probable reserves are those reserves of petroleum that are nearly
certain but about which a slight doubt exists. Probable reserves are
based on median estimates, and claim a 50% confidence level of
recovery. Industry specialists refer to this as P50 (i.e. having a 50%
certainty of being produced), which is also referred to in the industry as 2P (proved plus probable).
Possible reserves are those reserves of petroleum with an even
greater degree of uncertainty about recovery but about which there
is some information. Possible reserves have a less likely chance of
being recovered than probable reserves. This term is often used
for reserves that are claimed to have at least a 10% certainty of
being produced (P10). Reasons for classifying reserves as possible
include varying interpretations of geology, reserves not producible
at commercial rates, uncertainty due to reserve infill (seepage from
adjacent areas), and projected reserves based on future recovery
methods. This is referred to in the industry as 3P (proved plus probable plus possible).
An evaluation of proved, probable, and possible natural gas
reserves naturally involves multiple uncertainties. The accuracy of
any reserves evaluation depends on the quality of available information and engineering and geological interpretation. Based on
the results of drilling, testing, and production after the audit date,
reserves may be significantly restated upwards or downwards.
Changes in the price of natural gas, gas condensate or crude oil
may also affect our proved and probable reserves estimates, as well
as estimates of its future net revenues and net present worth. This
is because the reserves are evaluated, and the future net revenues
and net present worth are estimated based on prices and costs as of
the audit date.
Recently, an additional term — potential reserves — is also used
on occasion; these reserves are based upon geological information
about the types of sediments where such resources are likely to occur
and they are considered to represent an educated guess. The term
inferred reserves is also commonly used in addition to, or in place
of, potential reserves. Inferred reserves are regarded as of a higher
degree of accuracy than potential reserves, and the term is applied