In Canada, for example, companies have to report proved 1P and proved plus probable 2P reserves under NI regulations, but 3P will only be reported if the company chooses to do so, as there is no legal obligation.
Therefore, many companies will not report their full spectrum of reserves under all classifications to the investment community unless they see a benefit of doing so. We are now seeing more and more companies beginning to report 3P reserves, especially from the junior end of the company spectrum. Junior companies will typically buy into prospective fields, spend their first few years in existence trying to prove commerciality, and then either get acquired by or merge with a bigger player, or are joined in their commercially viable oil or gas project by a bigger player who typically takes on most of the operating costs — known as a farm-in partner.
So typically, only a high level overview is possible, which results in little or no proved or probable reserves being booked, but maybe a high amount of possible reserves. The TSX-V exchange in Canada and the AIM exchange in London have many companies that fit this description, and 3P reserves and the hundreds of metrics Evaluate Energy and CanOils provide alongside them will be vital to any analysis of these emerging oil and gas players. To find out more about the financial and operating data we provide, click here.
Commodities Oil Gold Metals. Investing Commodities. What Are Proven Reserves? Also known as P90 reserves, these can have a significant effect on a company's share price and are used in conjunction with probable and possible reserves by investors to estimate a company's profits.
Proven reserves are dynamic; they can increase or decrease based on a variety of factors, including regulations and available technology. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
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What Is Shale Oil? Shale oil is a type of oil found in shale rock formations that must be hydraulically fractured to extract. Read about the pros and cons of shale oil. Probable Reserves Probable reserves are oil and gas resources determined to have between a 50 and 89 percent likelihood of commercial recovery. What Does Possible Reserves Mean? What Are Recoverable Reserves?
Recoverable reserves are oil and gas reserves that are economically and technically feasible to extract at the existing price of oil. Partner Links. Related Articles. Oil How do proven and unproven oil reserves differ? Investopedia is part of the Dotdash publishing family. The SEC requires the lower certainty evaluations to be verified by a third party before an oil and gas company can publicly state them to potential investors. Society of Petroleum Engineers.
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