higher than the Proved area. Possible (and in some cases, Probable) Reserves may be assigned to areas
that are structurally lower than the adjacent Proved or 2P area. Caution should be exercised in assigning
Reserves to adjacent reservoirs isolated by major, potentially sealing, faults until this reservoir is penetrated
and evaluated as commercially productive. Justification for assigning Reserves in such cases should be
clearly documented. Reserves should not be assigned to areas that are clearly separated from a known
accumulation by non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test
results); such areas may contain Prospective Resources. In conventional accumulations, where drilling has
defined a highest known oil (HKO) elevation and there exists the potential for an associated gas cap, Proved
oil Reserves should only be assigned in the structurally higher portions of the reservoir if there is reasonable
certainty that such portions are initially above bubble point pressure based on documented engineering
analyses. Reservoir portions that do not meet this certainty may be assigned as Probable and Possible oil
and/or gas based on reservoir fluid properties and pressure gradient interpretations.
Developed Reserves
Developed Reserves are expected quantities to be recovered from existing wells and facilities.
Reserves are considered developed only after the necessary equipment has been installed, or
when the costs to do so are relatively minor compared to the cost of a well. Where required facilities
become unavailable, it may be necessary to reclassify Developed Reserves as Undeveloped.
Developed Reserves may be further sub-classified as Producing or Non-Producing.
Developed Producing Reserves
Developed Producing Reserves are expected to be recovered from completion intervals
that are open and producing at the time of the estimate.
Improved recovery reserves are considered producing only after the improved recovery
project is in operation.
Developed Non-Producing Reserves
Developed Non-Producing Reserves include shut-in and behind-pipe Reserves
Shut-in Reserves are expected to be recovered from:
(1)
completion intervals which are open at the time of the estimate but which have
not yet started producing,
(2)
wells which were shut-in for market conditions or pipeline connections, or
(3)
wells not capable of production for mechanical reasons.
Behind-pipe Reserves are expected to be recovered from zones in existing wells which
will require additional completion work or future re-completion prior to start of production.
In all cases, production can be initiated or restored with relatively low expenditure
compared to the cost of drilling a new well.
Undeveloped Reserves
Undeveloped Reserves are quantities expected to be recovered through future investments:
(1)
from new wells on undrilled acreage in known accumulations,
(2)
from deepening existing wells to a different (but known) reservoir,
(3)
from infill wells that will increase recovery, or
(4)
where a relatively large expenditure (e.g. when compared to the cost of drilling a new well)
is required to
(a)
recomplete an existing well or
(b)
install production or transportation facilities for primary or improved recovery
projects.
