MILLER AND LENTS.pdf

Economic producibility is determined using the entity’s view of future conditions, and the entity may consider revenues from non-hydrocarbon sources in the determination. The entity must have a firm intention to proceed with a development project to book reserves from the project, and development of undeveloped reserves must be initiated within a reasonable time frame. Resources can be reported, including contingent and prospective resources.

Economic producibility is determined using existing economic conditions, and the entity may only consider revenues from saleable hydrocarbons in the determination. The entity must have committed to a final investment decision for a development project to book reserves from the project, and undeveloped reserves must be converted to developed status within five years of initial disclosure. Prohibited disclosure of resources, including contingent or prospective resources.

Future conditions include estimated costs and schedule associated with project development and recovery, estimated revenues from production based on future prices, projected taxes and royalties, and inflation indexes and market factors. Alternative economic scenarios may also be considered.

Proved oil and gas reserves are those quantities of oil and gas that can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions. The SEC rules require that economic producibility be determined using existing economic conditions, and the price shall be the average price during the 12-month period prior to the end date of the period covered by the report.

Revenues from non-hydrocarbon sources may be included in the economic producibility determination under SPE-PRMS, but these associated non-hydrocarbon components may not be included as reserves or production unless they are part of the marketable product recognized at the reference point.