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RTA/kab/EL-19-217500/0997 1 SDX Energy
Registered in England, number 1122740, at the above address
Gaffney, Cline & Associates Limited Bentley Hall, Blacknest
Alton, Hampshire GU34 4PU, UK Telephone: +44 (0)1420 525366 Fax:
+44 (0) 1420 525367 www.gaffney-cline.com
RTA/kab/EL-19-217500/0997 6th January 2020
Dr. Rob Cook VP Subsurface SDX Energy 38 Welbeck Street, London,
W1G 8DP
[email protected]
Dear Rob,
Statement of Hydrocarbon Reserves South Disouq Concession as at
30th September 2019
At the request of SDX Energy (SDX), Gaffney, Cline &
Associates (GCA) has performed an independent technical and
economic audit of the Reserves in the South Disouq Concession in
Egypt, in which SDX holds a 55% interest, as at an Effective Date
of 30th September 2019.
This statement relates specifically and solely to the subject
matter as defined in GCA’s scope of work and is conditional upon
the assumptions described herein. The statement must be considered
in its entirety and must only be used for the purpose for which it
was intended.
Reserves Statement
GCA has conducted an independent audit, as of 30th September
2019, of the natural gas and condensate Reserves in the South
Disouq and Ibn Yunus fields located onshore within the South Disouq
Concession in the central Nile Delta. The audit was based on
reserves and other information provided by SDX to GCA through
November and December 2019, and included such tests, procedures and
adjustments as were considered necessary. All questions that arose
during the audit process were resolved to GCA’s satisfaction.
In the preparation of this letter, GCA has used definitions
contained within the Canadian Oil and Gas Evaluation Handbook
(COGEH) and National Instrument (NI) 51-101 Standards of Disclosure
for Oil and Gas Activities as well as the Petroleum Resources
Management System (PRMS) published by the Society of Petroleum
Engineers (SPE), the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG) and the Society of
Petroleum Evaluation Engineers (SPEE), the Society of Exploration
Geophysicists (SEG), the Society of Petrophysicists and Well Log
Analysts (SPWLA), and the European Association of Geoscientists and
Engineers (EAGE) in June 2018, referred to as the SPE PRMS (see
Appendices I and II).
http://www.gaffney-cline.com/mailto:[email protected]
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SDX Energy 2 RTA/kab/EL-19-217500/0997
On the basis of technical and other information made available
to GCA, GCA hereby provides the gross field and net entitlement
reserve statement given in Table 1. Natural gas volumes represent
expected gas sales and are reported in billion (109) standard cubic
feet (Bscf) at standard conditions of 14.7 psia and 60°F.
Condensate volumes are reported in millions of stock tank barrels
(MMBbl).
Table 1: Statement of Reserves, South Disouq as at 30th
September 2019
(a) Gas
South Disouq
Gross Field Gas Reserves
SDX Net Entitlement
Gas Reserves
(Bscf) (Bscf)
Proved Developed 39.15 11.37
Proved Undeveloped 7.20 2.79
Total Proved 46.36 14.16
Probable 39.16 14.17
Proved plus Probable 85.52 28.33
Possible 54.48 20.97
Proved plus Probable plus Possible
140.00 49.30
(b) Condensate
South Disouq
Gross Field Condensate
Reserves
SDX Net Entitlement Condensate
Reserves
(MMBbl) (MMBbl)
Proved Developed 0.20 0.06
Proved Undeveloped 0.06 0.02
Total Proved 0.26 0.08
Probable 0.33 0.12
Proved plus Probable 0.59 0.21
Possible 0.71 0.28
Proved plus Probable plus Possible
1.30 0.48
Notes:
1. Gross Field Reserves are 100% of the volumes estimated to be
commercially recoverable from the fields.
2. Net Entitlement Reserves are SDX’s net economic entitlement
under the terms of the PSC.
3. Entitlements include volume equivalent of value of income tax
paid by EGAS on behalf of SDX.
4. Reserves are the same whether COGEH/NI 51-101 or SPE PRMS
definitions are used.
Economic Assessment
A gas sales price of US$2.65/MMBTU and GCA’s 4Q 2019 Brent Crude
Oil price scenario (see Table 2) were used for the economic
analysis, i.e. for the economic limit test and the calculation of
net entitlement volumes. Based on information provided by SDX, the
condensate is assumed to sell at 90% of Brent price.
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Table 2: GCA 4Q 2019 Brent Price Scenario
Year Brent Price (US$/Bbl)
4Q 2019 60.02
2020 56.90
2021 61.50
2022 66.75
2023 70.00
2024+ +2% per annum
Future capital and operating cost estimates for the Reserves
cases were provided by SDX. GCA reviewed these and made minor
adjustments where required in GCA’s opinion. Operating cost
estimates included G&A but excluded SDX’s Cairo office
overheads. Except where otherwise fixed by contract, costs were
escalated at 2% p.a. from 2021 onwards.
Reference Post-Tax NPVs have been attributed to the Proved, the
Proved plus Probable and the Proved plus Probable plus Possible
Reserves cases, at discount rates of 7.5, 10 and 12.5%. All NPVs
are discounted to 1st October 2019.
Table 3: NPV (US$ MM) of Future Cash Flow from Reserves, Net to
SDX, South Disouq Fields, as at 30th September 2019
US$ MM Discount Rates
0% 5% 10% 15% 20%
Proved Developed 16.4 15.3 14.4 13.5 12.8
Proved Undeveloped 5.6 5.1 4.6 4.2 3.8
Total Proved 22.0 20.4 19.0 17.7 16.6
Probable 30.0 25.9 22.6 19.9 17.7
Proved plus Probable 52.0 46.3 41.6 37.6 34.2
Possible 39.1 30.6 24.2 19.5 15.9
Proved plus Probable plus Possible
91.1 76.9 65.9 57.1 50.1
It should be clearly noted that the Net Present Values (NPVs)
contained herein do not represent a GCA opinion as to the market
value of the subject property, nor any interest therein. In
assessing a likely market value, it would be necessary to take into
account a number of additional factors including: reserves risk
(i.e. that Proved and/or Probable and/or Possible Reserves may not
be realized within the anticipated timeframe for their
exploitation); perceptions of economic and sovereign risk;
potential upside; other benefits, encumbrances or charges that may
pertain to a particular interest; and the competitive state of the
market at the time. GCA has explicitly not taken such factors into
account in deriving the reference NPVs presented herein.
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SDX Energy 4 RTA/kab/EL-19-217500/0997
Basis of Opinion
This document reflects GCA’s informed professional judgment
based on accepted standards of professional investigation and, as
applicable, the data and information provided by the Client and/or
obtained from other sources (e.g., public domain), the limited
scope of engagement, and the time permitted to conduct the
evaluation.
In line with those accepted standards, this document does not in
any way constitute or make a guarantee or prediction of results,
and no warranty is implied or expressed that actual outcome will
conform to the outcomes presented herein. GCA has not independently
verified any information provided by, or at the direction of, the
Client and/or obtained from other sources (e.g., public domain),
and has accepted the accuracy and completeness of this data. GCA
has no reason to believe that any material facts have been
withheld, but does not warrant that its inquiries have revealed all
of the matters that a more extensive examination might otherwise
disclose.
The opinions expressed herein are subject to and fully qualified
by the generally accepted uncertainties associated with the
interpretation of geoscience and engineering data and do not
reflect the totality of circumstances, scenarios and information
that could potentially affect decisions made by the report’s
recipients and/or actual results. The opinions and statements
contained in this report are made in good faith and in the belief
that such opinions and statements are representative of prevailing
physical and economic circumstances.
There are numerous uncertainties inherent in estimating reserves
and resources, and in projecting future production, development
expenditures, operating expenses and cash flows. Oil and gas
resources assessments must be recognized as a subjective process of
estimating subsurface accumulations of oil and gas that cannot be
measured in an exact way. Estimates of oil and gas resources
prepared by other parties may differ, perhaps materially, from
those contained within this report.
The accuracy of any resource estimate is a function of the
quality of the available data and of engineering and geological
interpretation. Results of drilling, testing and production that
post-date the preparation of the estimates may justify revisions,
some or all of which may be material. Accordingly, resource
estimates are often different from the quantities of oil and gas
that are ultimately recovered, and the timing and cost of those
volumes that are recovered may vary from that assumed.
Oil and condensate volumes are reported in millions (106) of
barrels at stock tank conditions (MMstb). Natural gas volumes have
been quoted in billions (109) of standard cubic feet (Bscf) and are
volumes of sales gas, after an allocation has been made for fuel
and process shrinkage losses. Standard conditions are defined as
14.7 psia and 60°F.
GCA’s review and audit involved reviewing pertinent facts,
interpretations and assumptions made by SDX or others in preparing
estimates of reserves and resources. GCA performed procedures
necessary to enable it to render an opinion on the appropriateness
of the methodologies employed, adequacy and quality of the data
relied on, depth and thoroughness of the reserves and resources
estimation process, classification and categorization of reserves
and resources appropriate to the relevant definitions used, and
reasonableness of the estimates.
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Definition of Reserves
Under the PRMS, Reserves are those quantities of petroleum that
are anticipated to be commercially recoverable by application of
development projects to known accumulations from a given date
forward under defined conditions. Reserves must satisfy four
criteria: discovered, recoverable, commercial and remaining (as of
the evaluation’s effective date) based on the development
project(s) applied.
Under COGEH, Reserves are estimated quantities of oil and
natural gas and related substances anticipated to be recoverable
from known accumulations, as of a given date, based on (a) analysis
of drilling, geological, geophysical, and engineering data; (b) the
use of established technology; and (c) specified economic
conditions, which are generally accepted as being reasonable and
shall be disclosed.
Reserves are further categorized in accordance with the level of
certainty associated with the estimates and may be sub-classified
based on project maturity and/or characterized by development and
production status. All categories of reserves volumes quoted herein
have been derived within the context of an economic limit test
(ELT) assessment (pre-tax and exclusive of accumulated depreciation
amounts) prior to any net present value (NPV) analysis.
Reserves net to SDX are quoted as Net Entitlement volumes,
reflecting the terms of the applicable Production Sharing Contract
(PSC).
GCA has not undertaken a site visit as part of this work. As
such, GCA is not in a position to comment on the operations or
facilities in place, their appropriateness and condition and
whether they are in compliance with the regulations pertaining to
such operations. Further, GCA is not in a position to comment on
any aspect of health, safety or environment of such operation.
This report has been prepared based on GCA’s understanding of
the effects of petroleum legislation and other regulations that
currently apply to these properties. However, GCA is not in a
position to attest to property title or rights, conditions of these
rights (including environmental and abandonment obligations), or
any necessary licenses and consents (including planning permission,
financial interest relationships, or encumbrances thereon for any
part of the appraised properties).
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SDX Energy 6 RTA/kab/EL-19-217500/0997
Notice
This document has been prepared for SDX. It may not be
distributed or made available in whole or in part in any other form
without the prior knowledge and written consent of GCA. No person
or company other than those for whom it is intended may directly or
indirectly rely upon its contents. GCA is acting in an advisory
capacity only and, to the fullest extent permitted by law,
disclaims all liability for actions or losses derived from any
actual or purported reliance on this document (or any other
statements or opinions of GCA) by the Client or by any other person
or entity.
*****
It has been a pleasure preparing this Statement of Hydrocarbon
Reserves for SDX Energy. Please contact the undersigned if you have
any questions.
Yours sincerely,
Gaffney, Cline & Associates
Project Manager
Dr. Rand Al-Obaidy Mustafa, Senior Petroleum Engineer
Reviewed by
Dr. John W. Barker, Technical Director – Reservoir
Engineering
Appendices
Appendix I COGEH Definitions of Reserves and Resources Appendix
II SPE PRMS Definitions of Reserves and Resources
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SDX Energy 6th January 2020
Appendix I COGEH Definitions of Reserves and Resources
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SDX Energy 6th January 2020
Canadian Oil and Gas Evaluations Handbook (COGEH) Definition of
Reserves and Resources1
August 2018 The Calgary Chapter of the Society of Petroleum
Evaluation Engineers (SPEE) and industry professionals have updated
the 3-volume COGEH handbooks into a single digital reference
document for National Instrument 51-101 – Standards of Disclosure
for Oil and Gas Activities. References in the extract are to other
sections of the updated COGEH.
1.3.2 TERMINOLOGY: RESOURCES AND RESERVES
Petroleum is defined as a naturally occurring mixture consisting
predominantly of hydrocarbons in the gaseous, liquid, or solid
phase. The term “Resources” encompasses all petroleum quantities
that originally existed on or within the earth’s crust in naturally
occurring accumulations, including discovered and undiscovered
(recoverable and unrecoverable) plus quantities already produced.
Accordingly, the term “total Resource” is equivalent to Petroleum
Initially-In-Place (PIIP) and it is recommended the term “PIIP” be
used rather than “total Resources” to avoid any confusion that may
result from the mixed historical usage of the term “Resource” to
mean only the recoverable portion of PIIP.
The term Recoverable Resources is sometimes used to denote a sum
of Reserves, Contingent Resources, and Prospective Resources (see
Section 5.7.2.5 – Aggregating Across Resource Classes for cautions
on using this term and this practice).
1.3.3 PROJECTS AND SCENARIOS
The concepts of projects and scenarios are fundamental to
COGEH.
A project is:
A defined activity or set of activities for the discovery or
recovery of oil or gas and related by -products.
A project provides the basis for the assessment and
classification of Resources.
A scenario is:
A specific exploration or development plan for the execution of
a project, with sufficient details (planned or assumed) to
facilitate an estimate of potential volumes and the preparation of
capital, production and operating cost forecasts to enable cash
flow analysis.
The level of detail of a scenario will depend on the information
available. Early in the life of a project, scenarios can vary
widely with respect to recovery mechanism, facility capacities,
construction methods, and development timing, etc.
Projects and scenarios are described in detail in Section 1.5 –
Projects.
1.3.4 LEVELS OF EVALUATION AND REPORTING
There are three important levels at which estimates are made and
recorded for Resource management and reporting.
Resource (or Reserve) Entity: The discrete part of an oil and
gas asset for which a Resource estimate is prepared. For example, a
Reserve entity may be an individual well zone, a group of well
zones, or a pool. A Prospective Resource entity might be a
play.
Property Resource Class (or Reserve): In COGEH, “property” is a
term used to describe a grouping of oil and gas Reserve entities in
a common geographic area (e.g., a field). Properties are defined
primarily for asset management purposes to facilitate functions
such as production and financial accounting and land, contract, and
records management. Property Reserve will typically, but not
always, consist of the estimates for multiple Reserve entities.
1 These definitions are extracted from Section 1.3 of the
Canadian Oil and Gas Evaluation Handbook (COGEH) and are not
intended to be an exact replica.
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SDX Energy 6th January 2020
Reported Resources (or Reserve): The sum of all individual
Resource estimates to be contained in a report. There are specific
requirements for reported Reserve estimates for all Reserve
entities in all properties presented in a Qualified Reserves
Evaluator’s (QRE) report (see Section 1.3.8.3 - Levels of Certainty
for Reported Reserves). Reported Reserves commonly refers to the
corporate total Reserves a company owns.
The evaluation process begins with estimating Resource at the
entity level, following which the entity level estimates are
aggregated to provide the total for properties, company, reporting
or other enterprise.
See Section 5.7 - Aggregation of Resource estimates for a
discussion of the aggregation process.
1.3.5 THE PETROLEUM RESOURCE MANAGEMENT SYSTEM AND RESOURCE
DEFINITIONS
COGEH uses the SPE-PRMS classification (see Figure 1-1), for
which:
CLASS forms the vertical axis of the PRMS diagram and represents
the COC. It describes the relative maturity of exploration and
development projects. Assignment to a Class depends on the extent
to which various conditions are satisfied.
CATEGORY forms the horizontal axis of the PRMS framework and
provides a measure of the uncertainty in estimates of a Resource
CLASS.
Figure 1-1 SPE-PRMS Resources Classification System
The following definitions relate to the subdivisions in the
Resources classification framework of Figure 1-1 and use the
primary nomenclature and concepts contained in the 2018
SPE-PRMS.
Total Petroleum Initially-In-Place (PIIP) is that quantity of
petroleum that is estimated to exist originally in naturally
occurring accumulations and is potentially producible. It includes
that quantity of petroleum that is estimated, as of a given date,
to be contained in known accumulations, prior to production, plus
those estimated quantities in accumulations yet to be discovered
(equivalent to “total Resources”).
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SDX Energy 6th January 2020
Discovered PIIP (equivalent to discovered Resources) is that
quantity of petroleum that is estimated, as of a given date, to be
contained in known accumulations prior to production. The
Discovered PIIP includes production, Reserves, and Contingent
Resources; the remainder is unrecoverable.
Production is the cumulative quantity of petroleum that has been
recovered at a given date.
Although the volume of all fluid produced from a reservoir and
measured at the wellhead is essential for reservoir engineering
analyses, the production referred to in the PRMS classification is
the volume of specific product types that is delivered to and
measured at a specific reference point (a reference, sales or
transfer point) that excludes any volumes that are not delivered at
that point.
Reserves are estimated remaining quantities of commercially
recoverable oil, natural gas, and related substances anticipated to
be recoverable from known accumulations, as of a given date, based
on the analysis of drilling, geological, geophysical, and
engineering data, the use of established technology, and specified
economic conditions, which are generally accepted as being
reasonable. Reserves are further categorized according to the level
of certainty associated with the estimates and may be
sub-classified based on development and production status. Refer to
the full definitions of Reserves in Section 1.3.8 – Definitions of
Reserves.
Contingent Resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
known accumulations using established technology or technology
under development (TUD) but are not currently considered to be
commercially recoverable due to one or more contingencies.
Contingent Resources are further categorized according to the level
of certainty associated with the estimates and may be
sub-classified based on project maturity and/or characterized by
their economic status. See Section 1.4.7.2.2 – Contingent
Resources.
Contingencies may include economic, environmental, social and
political factors, regulatory matters, a lack of markets, and a
prolonged timetable for development. Contingent Resources have a
Chance of Development that is less than certain.
Undiscovered PIIP (equivalent to undiscovered Resources) is that
quantity of petroleum that is estimated, on a given date, to be
contained in accumulations yet to be discovered. The potentially
recoverable portion of Undiscovered PIIP is referred to as
“Prospective Resources,” the remainder as “unrecoverable.”
Prospective Resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by applying future development projects.
Prospective Resources have both an associated Chance of Discovery
and a Chance of Development. Prospective Resources are further
categorized according to the level of certainty associated with
recoverable estimates assuming their discovery and development and
may be sub-classified based on project maturity. See Section
1.4.7.2.3 – Prospective Resources.
Unrecoverable is that portion of Discovered or Undiscovered PIIP
quantities that is estimated, as of a given date, not to be
recoverable by future development projects. A portion of these
quantities may become recoverable in the future as commercial
circumstances change or technological developments occur; the
remaining portion may never be recovered due to the
physical/chemical constraints represented by subsurface interaction
of fluids and reservoir rocks.
Resources may be unrecoverable because:
There is no known technically viable recovery process for any
portion of a Resource.
Of other contingencies, including, but not limited, to lack of
market access, regulatory approval, or social or environmental
objections.
The sum of Reserves, Contingent Resources, and Prospective
Resources is described as “Recoverable Resources” but has
significant potential to be misunderstood. It is valuable for
activities such as regional studies, but without an explanation and
a full understanding of what it represents, it is inadequate for
investment decisions. When a report includes an estimate of
Recoverable Resources, it must specify:
Which Resource classes are included: Reserves, Contingent
Resource and/or Prospective Resource, and the relative
proportions.
Whether it is risked or un-risked with respect to Chance of
Discovery and Chance of
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SDX Energy 6th January 2020
Development (e.g., Chance of Commerciality).
The uncertainty Category for which the summation has been
carried out. This should always include the sum of the Best
estimates. The arithmetic summation of Low and, especially High
estimates has significant potential to be misleading and is not
recommended.
Regulatory agencies may forbid the disclosure of the sums of
Reserves, risked or un-risked Contingent and Prospective Resource
Classes because they can be misleading.
1.3.6 PROJECT MATURITY SUB-CLASSES
Project Maturity Sub-Classes (See Figure 1-2) describe the stage
of an exploration or development project and correspond to the
Chance of Commerciality (COC) of the project. The boundaries
between the maturity sub-classes represent “decision gates” that
reflect the actions (business decisions) required to move the
project up the maturity “ladder” towards commercial production. The
Project Maturity Sub-Classes are those of the SPE-PRMS with further
guidance in Section 2.1.3.5 of the Petroleum Resources Management
System, Revised, June 2018 and can be obtained through the
following link: PRMS Revised, June 2018.
The use of Project Maturity Sub-Classes is relevant for all
Resource Classes and is a recommended best practice. A report of a
project maturity sub-class may be accompanied by an estimate of the
probability of progressing to the next level of maturity.
Project Maturity Sub-Classes for Reserves are: On Production,
Approved for Development and Justified for Development and describe
those actions that progress identified Reserves associated with a
defined project through final approvals to implementation and
initiation of production and product sales.
Project Maturity Sub-Classes for Contingent Resources are:
Development Pending, Development on Hold, Development Unclarified
and Development Not Viable and are consistent with the 2018
PRMS.Guidance on Project Maturity Sub-Classes for Contingent
Resources is provided in Section 1.4.7.2.2.9 – Project Maturity
Sub-Classes for Contingent Resources.
Figure 1-2 Sub-classes based on project maturity
https://www.spe.org/en/industry/petroleum-resources-management-system-2018/
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SDX Energy 6th January 2020
Project Maturity Sub-Classes for Prospective Resources are:
Play, Lead, Prospect (refer to Section 1.4.7.2.3.2 - Project
Maturity Sub-Classes for Prospective Resources for detailed
guidance). These classes describe a progression in each of which,
potential accumulations are evaluated according to their Chance of
Discovery and, assuming a discovery, the estimated quantities that
would be recoverable under appropriate development projects.
1.3.7 CLASSIFICATION OF RECOVERABLE RESOURCES
For petroleum quantities associated with simple conventional
reservoirs, the divisions between the Resource Classes defined in
Section 1.3.5 – The Petroleum Resource Management System and
Resource Definitions may be clear, and the basic definitions alone
may suffice for differentiation between classes. For example, the
drilling and testing of a well in a simple structural accumulation
may be sufficient to allow classification of the entire estimated
recoverable quantity as Contingent Resources or Reserves. However,
as the industry has trended toward the exploitation of more complex
and costly petroleum sources, the divisions between Resource
Classes have become less distinct, and accumulations may have
several classes of Resources simultaneously. For example, in
extensive “basin-centered” low-permeability gas plays, the division
between all classes of remaining recoverable quantities, (e.g.,
Reserves, Contingent Resources, and Prospective Resources), may be
highly interpretive. Consequently, additional guidance is necessary
to promote consistency in classifying Resources. The following
provides some clarification of the key criteria that delineate
Resources.
1.3.7.1 DISCOVERY STATUS
As shown in Figure 1-2, the Total PIIP is first sub-classified
based on the discovery status of a petroleum accumulation.
Discovered PIIP, production, Reserves, and Contingent Resources are
associated with known accumulations. Recognition as a known
accumulation requires the accumulation be penetrated by a well and
have evidence of the existence of petroleum. The concepts of
discovery and known accumulation are discussed in detail in Section
1.4.7.1.2 – Discovered Petroleum Initially-In-Place.
1.3.7.2 COMMERCIAL STATUS
Commercial status differentiates Reserves from Contingent
Resources. The criteria that should be considered in determining
commerciality includes:
The project is economically viable;
There is a market for the forecast sales quantities of
production required to justify development;
The necessary production, transportation facilities and access
to infrastructure are available or can be made available;
The regulatory, environmental, societal and political conditions
will allow for the actual implementation of the recovery project
being evaluated; and
All required internal and external approvals are forthcoming.
Evidence of this may include items such as signed contracts, budget
approvals, and approvals for expenditures, etc.
Section 1.4.7.2.1 – Reserves provides additional details
relating to the foregoing aspects of commerciality relating to
classification as Reserves versus Contingent Resources.
1.3.7.3 COMMERCIAL RISK
Estimates of recoverable quantities are stated in terms of a
product type delivered to a reference point (typically a custody
transfer or sales point) derived from a development program,
assuming commercial development. It must be recognized that
Reserves, Contingent Resources, and Prospective Resources involve
different risks associated with achieving commerciality. The
likelihood that a project will achieve commerciality is referred to
as the COC. The COC varies in different classes of Recoverable
Resources as follows:
Reserves: To be classified as Reserves, estimated recoverable
quantities must be associated with a project(s) that is in a known
accumulation with a COC that is effectively 100 percent.
Contingent Resources: Have been discovered and are recoverable
using established technology or potentially recoverable with TUD.
But not all technically feasible development plans will be
commercial. The commercial viability of a development project is
dependent on the forecast of fiscal and other conditions over the
life of the project. For Contingent Resources,
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SDX Energy 6th January 2020
the risk component relating to the likelihood that an
accumulation will be commercially developed is referred to as the
Chance of Development. For Contingent Resources the COC is equal to
the Chance of Development.
Prospective Resources: A Prospective Resource is an estimate of
what may be recovered if a discovery is made and developed, but not
all exploration projects will result in discoveries and not all
discoveries will be developed. The chance that an exploration
project will result in the discovery of petroleum is referred to as
the Chance of Discovery. Thus, for an undiscovered accumulation the
COC is the product of two risk components; the Chance of Discovery
and the Chance of Development.
1.3.7.4 ECONOMIC STATUS
Demonstration of economic viability is a prerequisite for
classification as a Reserve.
In examining the economic viability of Contingent Resources, the
same fiscal conditions should be applied as in the estimation of
Reserves, (e.g., specified economic conditions), which are
generally accepted as being reasonable. By definition, Reserves are
commercially (and hence economically) recoverable, but a Contingent
Resources that has satisfied other relevant contingencies may or
may not be economically viable and can be sub-classified by
economic status:
Economic Contingent Resources are those Contingent Resources
that are currently economically recoverable.
Sub-economic Contingent Resources are those Contingent Resources
that are not currently economically recoverable.
The designation of a Contingent Resource as sub-economic implies
there is a reasonable chance it could become economic within the
foreseeable future. If this is not the case, the classification
must be development not viable or unrecoverable Discovered
PIIP.
Where evaluations are incomplete, such that it is premature to
identify the economic viability of a project, it is acceptable to
note that project economic status is undetermined (e.g.,
“Contingent Resource – economic status undetermined”) and in which
case the Project Maturity Sub-Class would be Development
Unclarified.
Classification as a Prospective Resource implies an expectation
of economic viability but the assessment of this is likely to be
less rigorous than for Reserves or Contingent Resource.
1.3.7.5 UNCERTAINTY CATEGORIES
Estimates of Resources always involve uncertainty, and the
degree of uncertainty can vary widely between
accumulations/projects and over the life of a project.
Consequently, estimates of Resources should generally be quoted
according to the level of confidence associated with the estimates.
An understanding of statistical concepts and terminology is
essential to understanding the confidence associated with Resource
definitions and categories. These concepts, which apply to all
Resources, are outlined in Section 1.6 – Risk and Uncertainty in
Resource Evaluation and Classification.
The range of uncertainty of estimated recoverable volumes may be
represented by either deterministic scenarios or by a probability
distribution. Resources should be provided as Low, Best, and High
estimates as follows:
Low Estimate: This is considered to be a conservative estimate
of the quantity that will be recovered. It is likely the actual
remaining quantities recovered will exceed the Low Estimate. If
probabilistic methods are used, there should be at least a 90
percent probability (P90)2 the quantities actually recovered will
equal or exceed the Low Estimate.
Best Estimate: This is considered to be the Best Estimate of the
quantity that will be recovered. It is equally likely the actual
remaining quantities recovered will be greater or less than the
Best
2 Notation such as P90 indicates that there is a 90% probability
of obtaining greater production, similarly for P50
and P10.
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SDX Energy 6th January 2020
Estimate. If probabilistic methods are used, there should be at
least a 50 percent probability (P50)3 that the quantities actually
recovered will equal or exceed the Best Estimate.
High Estimate: This is considered to be an optimistic estimate
of the quantity that will be recovered. It is unlikely the actual
remaining quantities recovered will exceed the High Estimate. If
probabilistic methods are used, there should be at least a 10
percent probability (P10) the quantities actually recovered will
equal or exceed the High Estimate.
1.3.8 DEFINITIONS OF RESERVES
The following Reserves definitions and guidelines are designed
to assist evaluators in making Reserves estimates on a reasonably
consistent basis and assist users of evaluation reports in
understanding what such reports contain and, if necessary, in
judging whether evaluators have followed generally accepted
standards. The guidelines outline:
general criteria for classifying Reserves,
procedures and methods for estimating Reserves,
confidence levels of individual entity and aggregate Reserves
estimates,
verification and testing of Reserves estimates.
The following definitions apply to both estimates of individual
Reserves entities and the aggregate of Reserves for multiple
entities.
1.3.8.1 RESERVES CATEGORIES
Reserves are categorized according to the probability that at
least a specific volume will be produced.
In a broad sense, Reserves categories reflect the following
expectations regarding the associated estimates:
Reserves Category Confidence Characterization
Proved (1P) Low Estimate, Conservative
Proved + Probable (2P) Best Estimate
Proved + Probable + Possible (3P) High Estimate, Optimistic
1.3.8.1.1 PROVED RESERVES
Proved Reserves are those Reserves that can be estimated with a
high degree of certainty to be recoverable. It is likely the actual
remaining quantities recovered will exceed the estimated Proved
Reserves.
1.3.8.1.2 PROBABLE RESERVES
Probable Reserves are those additional Reserves that are less
certain to be recovered than Proved Reserves. It is equally likely
that the actual remaining quantities recovered will be greater or
less than the sum of the estimated Proved + Probable Reserves.
1.3.8.1.3 POSSIBLE RESERVES
Possible Reserves are those additional Reserves that are less
certain to be recovered than Probable Reserves. It is unlikely the
actual remaining quantities recovered will exceed the sum of the
estimated Proved + Probable + Possible Reserves.
Stand-alone Possible Reserves may be assigned to a property for
which no Proved or Probable Reserves volumes have been assigned but
would be rare. Circumstances for doing so could include any one or
more of the following:
3 P50 is a statistical median and may differ from a mean. In
early stage discoveries, unconventional Resources, or
frontier areas, there may be a significant difference between
P50 and mean estimates.
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SDX Energy 6th January 2020
Project economics are such that no Proved or Probable Reserves
can be assigned, but on a Proved + Probable + Possible Reserves
basis, the project is economically viable, and a development
decision has been made (e.g., adding compression, expanding
facilities, offshore development of a structure delineated mainly
with seismic with only limited well control).
Only minor expenditure is required to develop the Possible
Reserves and development is likely to proceed in the near future
(e.g., behind-pipe zones in a well, which have Proved or Probable
Reserves in another interval).
Possible Reserves may be assigned to an accumulation that is
being evaluated if Proved or Probable Reserves have been assigned
to an adjacent part of the same accumulation that is not part of
the evaluation for which a report is being prepared.
In all these situations, there should be an intention to develop
the stand-alone Possible Reserves within a reasonable time. A
report should contain an explanation of the reason for the
assignment of stand-alone Possible Reserves.
1.3.8.2 DEVELOPMENT AND PRODUCTION STATUS
1.3.8.2.1 DEVELOPED RESERVES
Developed Reserves are those Reserves that are expected to be
recovered from existing wells and installed facilities or, if
facilities have not been installed, that would involve a low
expenditure (e.g., when compared to the cost of drilling and
completing a well) to put the Reserves on production. The developed
category may be sub-divided into Producing and Non-Producing.
Developed Producing Reserves are those Reserves that are
expected to be recovered from completion intervals open at the time
of the estimate. These Reserves may be currently producing or, if
shut-in, they must have previously been on production, and the date
of resumption of production must be known with reasonable
certainty.
Developed Non-Producing Reserves are those Reserves that either
have not been on production or have previously been on production
but are shut-in and the date of resumption of production is
unknown.
1.3.8.2.2 UNDEVELOPED RESERVES
Undeveloped Reserves are those Reserves expected to be recovered
from known accumulations where a significant expenditure (e.g.,
when compared to the cost of drilling and completing a well) is
required to render them capable of production. They must fully meet
the requirements of the Reserves category (Proved, Probable,
Possible) to which they are assigned and expected to be developed
within a limited time (see Section 1.4.7.2.1.8 - Timing of
Production and Development).
In multi-well pools, it may be appropriate to allocate total
pool Reserves between the Developed and Undeveloped Sub-classes or
to sub-divide the Developed Reserves for the pool between Developed
Producing and Developed Non-Producing. This allocation should be
based on the estimator’s assessment as to the Reserves that will be
recovered from specific wells, facilities, and completion intervals
in the pool and their respective development and production
status.
1.3.8.3 LEVELS OF CERTAINTY FOR REPORTED RESERVES
The qualitative certainty levels contained in the definitions
are applicable to “individual Reserves entities”, which refers to
the lowest level that Reserves calculations are performed, and to
“Reported Reserves”, which refers to the highest-level sum
(aggregated quantity) of individual entity estimates for which
Reserves estimates are presented. Reported Reserves should target
the following levels of certainty under a specific set of economic
conditions.
At least a 90 percent probability that the quantities actually
recovered will equal or exceed the estimated Proved Reserves.
At least a 50 percent probability that the quantities actually
recovered will equal or exceed the sum of the estimated Proved +
Probable Reserves.
At least a 10 percent probability that the quantities actually
recovered will equal or exceed the sum of the estimated Proved +
Probable + Possible Reserves.
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A quantitative measure of the certainty levels pertaining to
estimates prepared for the various Reserves categories is desirable
to provide a clearer understanding of the associated risks and
uncertainties. However, most Reserves estimates are prepared using
deterministic methods that do not provide a mathematically derived
quantitative measure of probability. In principle, there should be
no difference between estimates prepared using probabilistic or
deterministic methods. Additional clarification of certainty levels
associated with Reserves estimates and the effect of aggregation is
provided in Section 5.7.1.6 The Portfolio Effect.
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Appendix II SPE PRMS Definitions of Reserves and Resources
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SDX Energy 6th January 2020
Society of Petroleum Engineers, World Petroleum Council,
American Association of Petroleum Geologists, Society of Petroleum
Evaluation Engineers,
Society of Exploration Geophysicists, Society of Petrophysicists
and Well Log Analysts, and European Association of Geoscientists
& Engineers
Petroleum Resources Management System
Definitions and Guidelines (4)
(Revised June 2018)
Table 1—Recoverable Resources Classes and Sub-Classes
Class/Sub-Class Definition Guidelines
Reserves Reserves are those quantities
of petroleum anticipated to be
commercially recoverable by
application of development
projects to known
accumulations from a given
date forward under defined
conditions.
Reserves must satisfy four criteria: discovered,
recoverable,
commercial, and remaining based on the development
project(s) applied. Reserves are further categorized in
accordance with the level of certainty associated with the
estimates and may be sub-classified based on project
maturity
and/or characterized by the development and production
status.
To be included in the Reserves class, a project must be
sufficiently defined to establish its commercial viability
(see
Section 2.1.2, Determination of Commerciality). This
includes
the requirement that there is evidence of firm intention to
proceed with development within a reasonable time-frame.
A reasonable time-frame for the initiation of development
depends on the specific circumstances and varies according
to the scope of the project. While five years is recommended
as a benchmark, a longer time-frame could be applied where,
for example, development of an economic project is deferred
at the option of the producer for, among other things,
market-
related reasons or to meet contractual or strategic
objectives.
In all cases, the justification for classification as
Reserves
should be clearly documented.
To be included in the Reserves class, there must be a
high confidence in the commercial maturity and economic
producibility of the reservoir as supported by actual
production or formation tests. In certain cases, Reserves
may be assigned on the basis of well logs and/or core
analysis that indicate that the subject reservoir is
hydrocarbon-bearing and is analogous to reservoirs in
the same area that are producing or have demonstrated
the ability to produce on formation tests.
4 These Definitions and Guidelines are extracted from the full
Petroleum Resources Management System (revised June 2018)
document.
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SDX Energy 6th January 2020
On Production The development project is
currently producing or capable
of producing and selling
petroleum to market.
The key criterion is that the project is receiving income
from
sales, rather than that the approved development project is
necessarily complete. Includes Developed Producing Reserves.
The project decision gate is the decision to initiate or
continue
economic production from the project.
Class/Sub-Class Definition Guidelines
Approved for
Development All necessary approvals have
been obtained, capital funds
have been committed, and
implementation of the
development project is ready
to begin or is under way.
At this point, it must be certain that the development
project is going ahead. The project must not be subject to
any contingencies, such as outstanding regulatory
approvals or sales contracts. Forecast capital
expenditures should be included in the reporting entity’s
current or following year’s approved budget.
The project decision gate is the decision to start investing
capital in the construction of production facilities and/or
drilling development wells.
Justified for
Development Implementation of the
development project is justified
on the basis of reasonable
forecast commercial conditions
at the time of reporting, and
there are reasonable
expectations that all necessary
approvals/contracts will be
obtained.
To move to this level of project maturity, and hence have
Reserves associated with it, the development project must be
commercially viable at the time of reporting (see Section
2.1.2, Determination of Commerciality) and the specific
circumstances of the project. All participating entities
have
agreed and there is evidence of a committed project (firm
intention to proceed with development within a reasonable
time-frame}) There must be no known contingencies that
could preclude the development from proceeding (see
Reserves class).
The project decision gate is the decision by the reporting
entity
and its partners, if any, that the project has reached a level
of
technical and commercial maturity sufficient to justify
proceeding with development at that point in time.
Contingent
Resources Those quantities of petroleum
estimated, as of a given date,
to be potentially recoverable
from known accumulations by
application of development
projects, but which are not
currently considered to be
commercially recoverable
owing to one or more
contingencies.
Contingent Resources may include, for example, projects for
which there are currently no viable markets, where
commercial recovery is dependent on technology under
development, where evaluation of the accumulation is
insufficient to clearly assess commerciality, where the
development plan is not yet approved, or where regulatory or
social acceptance issues may exist.
Contingent Resources are further categorized in accordance
with the level of certainty associated with the estimates
and
may be sub-classified based on project maturity and/or
characterized by the economic status.
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Development
Pending
A discovered accumulation
where project activities are
ongoing to justify commercial
development in the
foreseeable future.
The project is seen to have reasonable potential for
eventual
commercial development, to the extent that further data
acquisition (e.g., drilling, seismic data) and/or evaluations
are
currently ongoing with a view to confirming that the project
is
commercially viable and providing the basis for selection of
an
appropriate development plan. The critical contingencies
have
been identified and are reasonably expected to be resolved
within a reasonable time-frame. Note that disappointing
appraisal/evaluation results could lead to a reclassification
of
the project to On Hold or Not Viable status.
The project decision gate is the decision to undertake
further data acquisition and/or studies designed to move
the project to a level of technical and commercial maturity
at which a decision can be made to proceed with
development and production.
Class/Sub-Class Definition Guidelines
Development
on Hold A discovered accumulation where
project activities are on hold and/or
where justification as a commercial
development may be subject to
significant delay.
The project is seen to have potential for commercial
development. Development may be subject to a significant
time delay. Note that a change in circumstances, such
that there is no longer a probable chance that a critical
contingency can be removed in the foreseeable future,
could lead to a reclassification of the project to Not
Viable
status.
The project decision gate is the decision to either proceed
with additional evaluation designed to clarify the potential
for
eventual commercial development or to temporarily suspend
or delay further activities pending resolution of external
contingencies.
Development
Unclarified A discovered accumulation
where project activities are
under evaluation and where
justification as a commercial
development is unknown based
on available information.
The project is seen to have potential for eventual
commercial development, but further appraisal/evaluation
activities are ongoing to clarify the potential for eventual
commercial development.
This sub-class requires active appraisal or evaluation
and should not be maintained without a plan for future
evaluation. The sub-class should reflect the actions
required
to move a project toward commercial maturity and economic
production.
Development
Not Viable A discovered accumulation for
which there are no current plans
to develop or to acquire additional
data at the time because of limited
production potential.
The project is not seen to have potential for eventual
commercial development at the time of reporting, but the
theoretically recoverable quantities are recorded so that
the
potential opportunity will be recognized in the event of a
major change in technology or commercial conditions.
The project decision gate is the decision not to undertake
further data acquisition or studies on the project for the
foreseeable future.
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Prospective
Resources Those quantities of petroleum that
are estimated, as of a given date,
to be potentially recoverable from
undiscovered accumulations.
Potential accumulations are evaluated according to the
chance of geologic discovery and, assuming a discovery,
the estimated quantities that would be recoverable under
defined development projects. It is recognized that the
development programs will be of significantly less detail
and
depend more heavily on analog developments in the earlier
phases of exploration.
Prospect A project associated with a
potential accumulation that
is sufficiently well defined to
represent a viable drilling
target.
Project activities are focused on assessing the chance of
geologic discovery and, assuming discovery, the range
of potential recoverable quantities under a commercial
development program.
Lead A project associated with a
potential accumulation that is
currently poorly defined and
requires more data acquisition
and/or evaluation to be classified
as a Prospect.
Project activities are focused on acquiring additional data
and/or undertaking further evaluation designed to confirm
whether or not the Lead can be matured into a Prospect.
Such evaluation includes the assessment of the chance of
geologic discovery and, assuming discovery, the range of
potential recovery under feasible development scenarios.
Play A project associated with a
prospective trend of potential
prospects, but that requires more
data acquisition and/or evaluation
to define specific Leads or
Prospects.
Project activities are focused on acquiring additional data
and/or undertaking further evaluation designed to define
specific Leads or Prospects for more detailed analysis of
their chance of geologic discovery and, assuming discovery,
the range of potential recovery under hypothetical
development scenarios.
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SDX Energy 6th January 2020
Table 2—Reserves Status Definitions and Guidelines
Status Definition Guidelines
Developed
Reserves 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
Expected quantities to be
recovered from completion
intervals that are open and
producing at the effective date
of the estimate.
Improved recovery Reserves are considered producing only
after the improved recovery project is in operation.
Developed
Non-Producing
Reserves
Shut-in and behind-pipe
Reserves.
Shut-in Reserves are expected to be recovered from (1)
completion intervals that 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 that will require additional
completion
work or future re-completion before start of production with
minor cost to access these reserves.
In all cases, production can be initiated or restored with
relatively low expenditure compared to the cost of drilling
a
new well.
Undeveloped
Reserves Quantities expected to be
recovered through future
significant investments.
Undeveloped Reserves are to be produced (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.
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SDX Energy 6th January 2020
Table 3—Reserves Category Definitions and Guidelines
Category Definition Guidelines
Proved Reserves Those quantities of petroleum
that, by analysis of geoscience
and engineering data, can be
estimated with reasonable
certainty to be commercially
recoverable from a given date
forward from known reservoirs
and under defined economic
conditions, operating methods,
and government regulations.
If deterministic methods are used, the term “reasonable
certainty” is intended to express a high degree of
confidence
that the quantities will be recovered. If probabilistic methods
are
used, there should be at least a 90% probability (P90) that
the
quantities actually recovered will equal or exceed the
estimate.
The area of the reservoir considered as Proved includes (1)
the area delineated by drilling and defined by fluid
contacts,
if any, and (2) adjacent undrilled portions of the reservoir
that can reasonably be judged as continuous with it and
commercially productive on the basis of available
geoscience and engineering data.
In the absence of data on fluid contacts, Proved quantities
in a reservoir are limited by the LKH as seen in a well
penetration unless otherwise indicated by definitive
geoscience, engineering, or performance data. Such
definitive information may include pressure gradient
analysis and seismic indicators. Seismic data alone may
not be sufficient to define fluid contacts for Proved.
Reserves in undeveloped locations may be classified as
Proved
provided that:
A. The locations are in undrilled areas of the reservoir
that can be judged with reasonable certainty to be
commercially mature and economically productive.
B. Interpretations of available geoscience and engineering
data indicate with reasonable certainty that the
objective formation is laterally continuous with drilled
Proved locations.
For Proved Reserves, the recovery efficiency applied to
these
reservoirs should be defined based on a range of
possibilities
supported by analogs and sound engineering judgment
considering the characteristics of the Proved area and the
applied development program.
Probable
Reserves Those additional Reserves that
analysis of geoscience and
engineering data indicates are
less likely to be recovered than
Proved Reserves but more
certain to be recovered than
Possible Reserves.
It is equally likely that actual remaining quantities recovered
will
be greater than or less than the sum of the estimated Proved
plus Probable Reserves (2P). In this context, when
probabilistic
methods are used, there should be at least a 50% probability
that the actual quantities recovered will equal or exceed the
2P
estimate.
Probable Reserves may be assigned to areas of a reservoir
adjacent to Proved where data control or interpretations of
available data are less certain. The interpreted reservoir
continuity may not meet the reasonable certainty criteria.
Probable estimates also include incremental recoveries
associated with project recovery efficiencies beyond that
assumed for Proved.
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SDX Energy 6th January 2020
Category Definition Guidelines
Possible
Reserves Those additional reserves that
analysis of geoscience and
engineering data indicates are
less likely to be recoverable
than Probable Reserves.
The total quantities ultimately recovered from the project
have
a low probability to exceed the sum of Proved plus Probable
plus Possible (3P), which is equivalent to the high-estimate
scenario. When probabilistic methods are used, there should
be at least a 10% probability (P10) that the actual
quantities
recovered will equal or exceed the 3P estimate.
Possible Reserves may be assigned to areas of a reservoir
adjacent to Probable where data control and interpretations
of available data are progressively less certain.
Frequently,
this may be in areas where geoscience and engineering data
are unable to clearly define the area and vertical reservoir
limits of economic production from the reservoir by a
defined,
commercially mature project.
Possible estimates also include incremental quantities
associated with project recovery efficiencies beyond that
assumed for Probable.
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Probable
and Possible
Reserves
See above for separate criteria
for Probable Reserves and
Possible Reserves.
The 2P and 3P estimates may be based on reasonable
alternative technical interpretations within the reservoir
and/
or subject project that are clearly documented, including
comparisons to results in successful similar projects.
In conventional accumulations, Probable and/or Possible
Reserves may be assigned where geoscience and engineering
data identify directly adjacent portions of a reservoir within
the
same accumulation that may be separated from Proved areas
by minor faulting or other geological discontinuities and
have
not been penetrated by a wellbore but are interpreted to be
in
communication with the known (Proved) reservoir. Probable or
Possible Reserves may be assigned to areas that are
structurally 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 mature
and economically 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 elevation and there exists the potential
for an associated gas cap, Proved Reserves of oil 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.
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SDX Energy 6th January 2020
Figure 1.1—RESOURCES CLASSIFICATION FRAMEWORK
Range of Uncertainty
DIS
CO
VE
RE
D P
IIP
CO
MM
ER
CIA
LS
UB
-CO
MM
ER
CIA
L
PRODUCTION
UNRECOVERABLE
CONTINGENT RESOURCES
RESERVES
PROSPECTIVE RESOURCES
Incre
asin
g C
han
ce o
f C
om
merc
iality
Not to scale
TO
TA
L P
ET
RO
LE
UM
INIT
IALL
Y-I
N-P
LA
CE
(P
IIP
)
UN
DIS
CO
VER
ED
PII
P
UNRECOVERABLE
1P 2P 3P
P1
Proved
P2
Probable
P3
Possible
HighBest EstimateLow
1C 2C 3C
C1 C2 C3
1U 2U 3U
P50 P10P90
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SDX Energy 6th January 2020
Figure 2.1—SUB-CLASSES BASED ON PROJECT MATURITY
Range of Uncertainty
TO
TA
L P
ET
RO
LE
UM
INIT
IAL
LY
-IN
-PL
AC
E (P
IIP)
DIS
CO
VE
RE
D P
IIP
UN
DIS
CO
VER
ED
PII
P
CO
MM
ER
CIA
LS
UB
-CO
MM
ER
CIA
L
PRODUCTION
UNRECOVERABLE
CONTINGENT
RESOURCES
RESERVES
PROSPECTIVE
RESOURCES
Incre
asin
g C
han
ce
of
Co
mm
erc
iality
On Production
Approved for
Development
Justified for
Development
Development Pending
Development On Hold
Development Unclarified
Prospect
Play
Not to scale
Project Maturity
Sub-classes
Development Not Viable
Lead
UNRECOVERABLE