DeZwarteRidder schreef op 26 februari 2014 19:11:
vincentinvestor1
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February 14, 2014 - 08:11 AM
137 Reads | Post# 22208911
RE:Reserves
Oil and gas reserves cannot be measured. Geological, engineering, and economic information, including predictions, must be combined to give estimates of how much oil and gas may be produced in the future. Therefore great care needs to be exercised in interpreting numbers which purport to describe reserves of oil and gas.
The UK, Norway, Canada and Australia allow companies to account this ‘best estimate’ (UNFC code111 and 112) as ‘proven’ reserves
Under the SEC rules companies may claim as ‘proven’ reserves only those which meet more stringent criteria, roughly corresponding to P1 reserves (UNFC code 111) (90 per cent geologic probability), but with additional specific constraints. These constraints, broadly
speaking, exclude accumulations not ‘proven’ by drilling, estimates of additional recovery due to
secondary recovery mechanisms (such as gas or water injection) unless their efficacy has been demonstrated, and (a separate issue) liquids recovered from mining methods.
A separate SEC issue is that it requires companies to report an estimate of the present value of their‘proven’ oil reserves, with estimated productionprofiles, a 10 per cent discount rate, and the prices,taxes and costs prevailing at the close of business of 31December of the year for which the company reports results.
Under SEC rules Xcite Energy would not be able to claim thats even its 1P rserves ( that are proven reserves from a geological perspective ) are proven reserves from a financial perspective as Expected price movements in contracts which are indexed to future world price movements are not allowed. XEL needs more than 130 US$ in the future and this for more than 30 years.
Basically this demonstrate's once again why XEL could fail in its efforts ....
just my 2 cents fyi only gla dyor
Read more at
www.stockhouse.com/companies/bullboar...