Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (32988)	5/4/2003 2:47:38 AM
From: energyplay	Read Replies (1) of 74559

Hi Jay - Very happy to hear things comming back to normal ! Reserve life calculations - AN 'interesting' topic . 1) Reserve estimates tend to be conservative. Some more conservative than others, so A's 6 year life lasts longer than B' 8 year life. Production engineering firms would esimate reserves, this estimate would be used to get a bank loan. If the wells ran out before bank loan was paid off, bank went after teh engineers for the missing money. How conservative would you be ?" ;-) How conservative would you be in a place like Texas where bankers had the Sheriff in there pocket and carried guns ? (like Russia today) At one time in California, reserves were subject to property taxes. Guess result ! Reserves are also a function of rework cost and future prices. In some cases, technology improvements are able in recover more oil or gas.

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