EXERCISE 2 Answer the following questions. 1. What does the estimation of Fair Market Value begin with?

1. What does the estimation of Fair Market Value begin with?

2. Why are the evaluators concerned with the type, quantity and quality of data available?

3. How many methods are commonly accepted for FMV estimation? Name them.

4. What is the comparable sales approach?

5. What characteristics are usually heavily dependent on time and geographic proximity?

6. The income approach is the alternative approach to the comparable sales approach, isn`t it?

7. What does it involve?

EXERCISE 3 Decide whether the statements are true or false. Correct them if necessary.

1. Reserves are categorized by their recoverability.

2. Multi-reservoir pays are more attractive for exploration since the probability of success is higher than for a single-reservoir structure.

3. Risk analysis forms a basis for developing Prospect Inventories and implementing Portfolio Management.

4. Proved resources are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with 50% certainty to be commercially recoverable.

5. Economic analysis does not take into account the taxes subtracted from the oil price.

6. Fair market value assessment has nothing to do with reserve audit.

7. There are four methods to determine recoverable resources.

8. Exploration efficiency is better determined by annual estimation as compared to a long-term history.

EXERCISE 4 Read and translate the text, using the words after the text.

TEXT 2

The largest uncertainties probably attend forecasts on reserve size, and the smallest are associated with predictions of finding costs. Predictions as to reserves and discovery probability lie almost entirely within the geotechnical purview, whereas finding-cost estimates require input from several other disciplines as well. All three types of predictions are made routinely by geologists, geophysicists, and engineers, and have enormous financial consequences, in as much as they directly impact key elements of risk ventures.

Accordingly, it is somewhat surprising that few data seem to be available as to actual performance records of explorationists` predictions. Most exploration organizations and individuals do not examine predictive performance, and the few that do have been reluctant to publicize their records. The reasons are mostly due to human nature: the forward press of exploratory events, lack of staff continuity, corporate politics, intra-organizational trepidation, individual chagrin, perceived proprietary advantage, and even professional modesty!

The words to be memorized:

Reservesize – величина запасов

Findingcost – стоимость обнаружения

Geotechnical purview – гео-технология