Investors

Proved (1P) reserves:

Quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs under defined economic conditions, operating methods and government regulations. Probabilistic – at least 90% probability. Deterministic – high degree of confidence.

Probable (2P) reserves:

Additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than proved reserves, but more certain to be recovered than possible reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated proved plus probable reserves (2P). Probabilistic – at least 50% probability that quantities recovered will equal or exceed the 2P estimate.

Possible (3P) reserves:

Additional reserves which analysis of geoscience and engineering data suggest are less likely to be recoverable than probable reserves. The total quantities ultimately recovered from a project have a low probability to exceed the sum of provided plus probable plus possible (3P) reserves. Probabilistic – at least 10% probability that quantities recovered will equal or exceed the 3P estimate.

Probabilistic reserve definitions

P90. A probability cut-off of 90% is often used to describe proved reserves. In this case, proved reserves are defined as having a better-than-90% chance of being produced over the life of the field.

P50. A probability cut-off of 50% is often used to describe probable reserves. Reserves that have a better-than-50% chance of being technically and economically producible. These are reserves that are often referred to as ‘indicated’.

P10. A probability cut-off of 10% is often used to describe possible reserves. These are reserves that are often described as ‘inferred’. They have a less-than-50% chance of being technically and economically producible.

Proved reserves

The estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Economic producibility must be supported by either actual production or conclusive formation test. The SEC allows 3Dseismic data to be used in the deep water Gulf of Mexico where high drilling costs prohibit full evaluation of a reservoir section.

Contingent reserve definition

Quantities of hydrocarbon estimated to be potentially recoverable from known accumulations, but are not currently considered to be commercially recoverable. Contingent resources may be of a significant size, but still have constraints to development. These constraints, preventing the booking of reserves, may relate to lack of gas marketing arrangements or to technical, environmental or political barriers that prevent current economic development.

Prospective resources

Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. This class represents a higher risk than contingent resources as the risk of discovery is also added.