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What are Probable Reserves?

Probable Reserves

The SEC (Securities & Exchange Commission) defines probable reserves as those additional reserves that are less certain to be recovered than proved reserves but which, in sum with proved reserves, are as likely as not to be recovered.  When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will equal or exceed the sum of estimated proved plus probable reserves.  Similarly, when probabilistic methods are used, there must be at least 50 percent probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates.

How it’s important to us

Probable reserves factor into company valuation, forecasts and planning.  Statistical models of reservoirs are used to determine and categorize reserves and predict recovery volumes from reservoirs.

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