Proven reserves

Proven reserves, also called measured reserves, 1P, and reserves, are industry specific terms regarding fossil fuel energy sources. They are defined as a "Quantity of energy sources estimated with reasonable certainty, from the analysis of geologic and engineering data, to be recoverable from well established or known reservoirs with the existing equipment and under the existing operating conditions." A reserve is considered a proven reserve if it is probable that 90% or more of the resource is recoverable while being economically profitable. These terms relate to common fossil fuel reserves such as oil reserves (see main article), natural gas reserves, or coal reserves.

Operating conditions are taken into account when determining if a reserve is classified as "proven". Operating conditions include operational break-even price, regulatory and contractual approvals, without which the reserve cannot be classified as proven. Price changes therefore can have a large impact on the classification of proven reserves. Regulatory and contractual conditions may change, and also affect the amount of proven reserves. If a reserve's resources can be recovered using current technology but is not economically profitable it is considered "technically recoverable" but cannot be considered a proven reserve. Reserves less than 90% recoverable but more than 50% are considered "probable reserves" and below 50% are "possible reserves".

The engineering term P90 refers to 90 percent engineering probability, is a commonly accepted specific definition by Society of Petroleum Engineers, it does not take into account anything except technical concerns. Therefore, it is different from the business term which does take into account current break-even profitability, and regulatory and contractual approval, but is considered a very rough equivalent. The definition is certainly not universal. Energy Watch Group uses a different definition, P95.

Disregarding economics, the proper engineering term for the total technologically extractable amount is the Producible fraction, which is easily confused with the business term proven reserves. However, the purely engineering term is also misleading in that squeezing the last bits of fossil fuel out follows the diminishing returns and at some point is so costly that it becomes highly impractical, as seen on a bell curve, which is why measures like P90 and P95 were created. The term proven reserves is further subdivided into proved developed reserves and proved undeveloped reserves. Note that it does not include Unproven reserves, which is broken down into probable reserves as well as possible reserves .

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