3P

DEFINITION of '3P'

The total amount of reserves that a company estimates having access to, calculated as the sum of all proved and unproved reserves. Unproved reserves are broken into two segments: those based on geological and engineering estimates from proved sources (probable) and those that are less likely to be extracted due to financial or technical difficulties (possible). Therefore, 3P refers to proved plus probable plus possible reserves.

BREAKING DOWN '3P'

Energy companies update their investors on the amount of oil and natural gas reserves they have access to through a reserve update. This update typically includes proved, probable and possible reserves, and is similar to an inventory report that a retailer might provide to investors.


The 3P estimate is a rosy estimate of what might actually be pumped out of a well. Probable reserves are generally given 50% certainty (P50), and possible reserves are given 10% certainty (P10).

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RELATED FAQS
  1. How does an oil and gas company measure and state their reserves?

    Understand how oil and gas companies estimate possible reserves and how different classifications are used to designate the ... Read Answer >>
  2. What is the difference between proven and probable reserves in the oil and gas sector?

    Learn how those in the oil and gas sector classify oil reserves and the specific differences between proven and probable ... Read Answer >>
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