Proved Reserves

Proved Reserves

Proved reserves is a metric used in mining that describes the amount of hydrocarbon resources that can be recovered from a deposit with a reasonable level of certainty. Proved reserves is used in the valuation of a mining company, as the ability of the company to generate future revenue partly depends upon how much of its discovered resources can be reliably extracted. Proved reserves is a metric used in mining that describes the amount of hydrocarbon resources that can be recovered from a deposit with a reasonable level of certainty. Proved reserves is a metric that describes the amount of hydrocarbon resources that can be recovered from a deposit with a reasonable level of certainty. Proved resources are the opposite of unproven resources, which are discovered assets the company is not certain it will be able to extract.

Proved reserves is a metric that describes the amount of hydrocarbon resources that can be recovered from a deposit with a reasonable level of certainty.

What are Proved Reserves

Proved reserves is a metric used in mining that describes the amount of hydrocarbon resources that can be recovered from a deposit with a reasonable level of certainty. Proved reserves is a common metric quoted by companies such as oil, natural gas, coal and other commodity companies. Proved reserves is used in the valuation of a mining company, as the ability of the company to generate future revenue partly depends upon how much of its discovered resources can be reliably extracted. Also known as proven reserves.

Proved reserves is a metric that describes the amount of hydrocarbon resources that can be recovered from a deposit with a reasonable level of certainty.
A company with more proved resources will generally have a higher share price.
Proved resources are the opposite of unproven resources, which are discovered assets the company is not certain it will be able to extract.

Understanding Proved Reserves

Proved reserves are the part of the mining company's deposits that can be recovered with a reasonable level of certainty. Proved reserves are usually determined through extensive geologic and engineering studies. It can take mining companies several years to complete a study to determine the amount of proven resources.

When new production wells are drilled, a company's proved reserves level increases and the opposite happens when the number of wells in operation declines. The number of proved reserves increases or shrinks based on market conditions, such as the cost of equipment required for exploration and drilling. A company that increases its level of proven resources over time generally sees a favorable response in the price of its shares.

The other type of reserve is an unproven reserve, which has been discovered but the company cannot be certain to a reasonable degree that it will be able to extract the resources. Unproven reserves are not used by the company as an official part of its valuation.

The Energy and Information Administration (EIA) uses proved and unproved resource estimates to prepare its Annual Energy Outlook.

Related terms:

3P Oil Reserves

3P oil reserves are the total amount of reserves that a company estimates having access to, calculated as the sum of all proven and unproven reserves. read more

Energy Information Administration (EIA)

The Energy Information Administration (EIA) is a government agency responsible for collecting energy data, conducting analysis and making forecasts. read more

Estimated Ultimate Recovery (EUR)

Estimated Ultimate Recovery (EUR) is a production term used in the oil and gas industry to describe the quantity of recoverable resource.  read more

Hubbert's Peak Theory

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Hydrocarbon

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Possible Reserves

Possible reserves are oil reserves for which the estimated likelihood of successful extraction is between 10% and 50%. read more

Proven Reserves

Proven reserves are the best estimate of oil that will be extracted from a formation given the current technology, economic evaluation, and available data. read more

Shale Oil

Shale oil is a type of oil found in shale rock formations that must be hydraulically fractured to extract. Read about the pros and cons of shale oil. read more