3P

AAA

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.

INVESTOPEDIA EXPLAINS '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).

RELATED TERMS
  1. Commercial Well

    Any oil or gas drilling site that produces enough oil or gas ...
  2. Oil Field

    A tract of land used for extracting petroleum, or crude oil, ...
  3. Hubbert Curve

    A statistical theory of oil production that states that the rate ...
  4. Crude Oil

    A naturally occurring, unrefined petroleum product composed of ...
  5. Proven Reserves

    After an oil exploration firm conducts a seismic survey on a ...
  6. Oil Reserves

    An estimate of the amount of crude oil located in a particular ...
Related Articles
  1. Peak Oil: What To Do When The Wells ...
    Economics

    Peak Oil: What To Do When The Wells ...

  2. Oil: A Big Investment With Big Tax Breaks
    Investing Basics

    Oil: A Big Investment With Big Tax Breaks

  3. Oil And Gas Industry Primer
    Active Trading

    Oil And Gas Industry Primer

  4. Uncovering Oil And Gas Futures
    Active Trading

    Uncovering Oil And Gas Futures

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center