Classifications and definitions

For a quantity of petroleum to be classified as reserves the decision must be made that the accumulation will be developed and put into production within a reasonable timeframe. Other quantities are designated as resources. All estimates of resources and reserves involve a certain degree of uncertainty, which is primarily due to the geological data available at the time of appraisal and the interpretation of this data. Reserves are therefore divided into various categories depending on the relative uncertainty that exists.

Definitions

Guidelines
PA Resources utilises the 2007 guidelines and classifications in the Petroleum Resources Management System (SPEPRMS 2007).

Assessments and audits 
All significant reserves have either been assessed by independent auditors or reviewed by authorised consultants. The reserves of the minor fields were based on internal evaluations or operators’ evaluations. Resources have been assessed internally, by the operators or by external consultants.

Oil price
All reserves were calculated using the published McDaniel and Associates Brent oil price forecast, published on 1 January 2012, with an average price of USD 105 per barrel for the period 2012-2021.

Working interest and Net Entitlement
PA Resources reports its reserves on a working interest (or WI) basis as well as on a Net Entitlement basis. Working interest reserves illustrates the company’s gross volume of the fields’ total reserves before reductions. Net entitlement reserves shows the company's net volumes after deductions for royalties and other taxes, reflecting the production and cost sharing agreements. Resources are only reported on a Working interest basis.

Reserves

Proven reserves (1P)
Proven reserves (1P) means the estimated amount of petroleum which has a very high probability (greater than 90 percent) of being able to be recovered from proven accumulations in the current financial circumstances and under current operating conditions.

Probable reserves (2P)
Probable reserves are reserves that are likely to consist of recoverable oil and gas accumulations. Proven plus probable reserves (2P) must have more than 50 percent probability of being technically and financially recoverable in the current or future financial circumstances.

Possible reserves (3P)
Possible reserves are reserves for which analyses indicate that it is less likely that they will be able to be recovered. Proven plus probable plus possible reserves must have more than 10 percent probability of being technically and financially recoverable in the current or future financial circumstances.

Resources

Contingent resources
Contingent resources means the estimated recoverable volumes from known accumulations that have been proven through drilling but which do not yet fulfil the requirements for reserves.

Prospective resources
Prospective resources means the resources estimated to exist in prospect  areas considered viable to drill, but which have not yet been proven by drilling. PA Resources includes resources in leads in this category. 

Risked prospective resources
Risked prospective resources means the prospective resources estimated to exist based on geological and technical investigations, taking into account the probability of discoveries.

Leads
Leads are possible accumulations of hydrocarbons where more data needs to be gathered and analysed before they can be called prospects, where drilling is considered to be feasible.