When prospective investors look at a company’s U.S. or Canadian regulatory filings, many of them may mistakenly believe they are getting a complete and accurate assessment of the crude oil, natural gas and natural gas liquids (NGLs) that could technically and economically be produced from the acreage the company controls. In fact, the rules governing the tallying of proved reserves are anything but straightforward and often result in a significant underestimation of the hydrocarbon volumes waiting to be produced. That is particularly true when it comes to reserves in shale plays, which many would argue are the most important reserves of all in today’s energy market. Today we begin a blog series that considers the arcane world of corporate reporting of proved hydrocarbon reserves and the importance of understanding the reporting rules.
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