EXERCISE 5 Connect the terms with their definitions.
| 1. proved reserves | A.unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable, with a probability of at least 10% |
| 2. possible reserves | B. reserves expected to be recovered from completion intervals which are open and producing at the time of estimate |
| 3. behind-pipe reserves | C. a system of geological and engineering estimates as well as economic analysis based on those estimates that allow to determine OOIP |
| 4. original oil [and gas] in place – OOIP | D. recoverable reserve ratio |
| 5. fair market value and capitalization | E unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable, with a probability of at least 50% |
| 6. producing reserves | F. the price that an interested but not desperate buyer would be willing to pay and an interested but not desperate seller would be willing to accept on the open market assuming a reasonable period of time for an agreement to arise |
| 7. oil and gas reserve audit | G. those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable |
| 8. probable reserves | H. reserves expected to be recovered from wells not capable of producing for mechanical reasons |
| 9. recovery factor – RF | I. estimated quantities of petroleum contained in the sub-surface, as well as those quantities already produced |
| 10. shut-in reserves | K. reserves expected to be recovered from zones in existing wells which will require additional completion work or future re-completion |
EXERCISE 6 Make up your own sentences using the following word expressions.
Cash flow, recovery factor, producing reserves, oil and gas properties, development risk analysis, finding cost, reserve estimator, recoverability, net revenue.
EXERCISE 7 Read and translate the text.
TEXT 3
Given the strategic importance of reliable oil and gas reserves estimates, all major US energy producers with significant oil and gas reserves are currently required by the Securities and Exchange Commission to report their estimates of proved developed reserves and proved underdeveloped reserves in their annual filings with the SEC. The SEC disclosure regulations on reserves date back to the energy crisis of the late 1970s.
The SEC disclosure rules on reserves are highly respected. The SEC uses strict definitions of the terms “proved” and “proved developed” reserves, and there is general consensus in the industry and among analysts that the SEC`s definitions are quite conservative, if not too restrictive. Under SEC definitions, reserves can only go in the “proved” category reporting if there is a “reasonable certainty” that they can be developed at current prices. SEC requires evidence from test wells, rather than allowing companies to rely on newer technologies for estimating reserves. Specifically, the SEC requires that “Reserves are considered proved if economic producibility is supported by either actual production or conclusive formation test”.
Companies also provide additional reserves-related data to other federal agencies, including “standardized measure of discounted future net cash flows relating to proved oil and gas reserved quantities”.
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