Probable Reserves

AAA

DEFINITION of 'Probable Reserves'

After an oil exploration firm conducts a seismic survey of a piece of land, it obtains the proven and probable reserves in that area. Probable reserves are those which have a 50% chance of being present. For example if an oil company believes that there is descent chance of a successful drilling operation, they would classify those reserves as "probable."

INVESTOPEDIA EXPLAINS 'Probable Reserves'

If a reserve is considered probable, only 50% of the expected recovery amount is factored into the total reserve. Oil companies are often valued based on a PP (proven+probable) reserve ratio basis. Probable reserves vary from possible reserves, which only have a 10% chance of full extraction.

RELATED TERMS
  1. Possible Reserves

    An estimate of the amount of oil or natural gas reserves that ...
  2. Proven Reserves

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

    An estimate of the amount of crude oil located in a particular ...
  4. West Texas Intermediate - WTI

    Light, sweet crude oil commonly referred to as "oil" in the Western ...
  5. Peak Oil

    A hypothetical date referring to the world's peak crude oil production, ...
  6. Barrels Per Day - B/D

    A measure of oil output, represented by the number of barrels ...
RELATED FAQS
  1. Who are Tesla's (TSLA) main suppliers?

    A relative newcomer to the automotive sector, Tesla Motors (TSLA), headquartered in California, is an auto manufacturer and ... Read Full Answer >>
  2. How much of the United States' energy is produced within the country?

    In 2014, the United States produced 87.1 quadrillion BTU, while it consumed 98.4 quadrillion BTU. This continues a trend ... Read Full Answer >>
  3. Which countries are able to produce oil and gas the cheapest?

    It is difficult to estimate and compare oil extraction costs across the globe because of uneven regulation and subsidies ... Read Full Answer >>
  4. How did the financial crisis affect the oil and gas sector?

    The financial crisis had a negative impact on the oil and gas sector as it led to a steep decline in oil and gas prices and ... Read Full Answer >>
  5. What is Western Canada Select and how does it impact Canadian oil producers?

    Western Canada Select (WCS) is an enormous heavy oil stream in western Canada that also serves as an important benchmark ... Read Full Answer >>
  6. What does a barrel of oil equivalent (BOE) refer to in the oil and gas sector?

    A barrel of oil equivalent, or BOE, is a term used in the oil and gas sector to describe the amount of energy found in one ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    The Green Marketing Machine

    Don't let corporations greenwash their dirty laundry. Learn how to spot a phony.
  2. Investing Basics

    Adapt To A Bear Market

    Learn how your portfolio should evolve to suit bear market conditions.
  3. Home & Auto

    5 Investment Risks Created By Global Warming

    Climate-change deniers and believers alike would be wise to prepare for the worst.
  4. Economics

    Peak Oil: What To Do When The Wells Run Dry

    Find out how to invest and protect your investments in this slippery sector.
  5. Economics

    Trust In Utilities

    Even in times of economic turmoil, utilities can be a good investment.
  6. Forex Education

    Natural Gas Industry: An Investment Guide

    Investors looking into this industry are faced with a confusing amount of information. We explain the important concepts and terms.
  7. Options & Futures

    Peak Oil: Problems And Possibilities

    Learn a little more about the "non" part of this nonrenewable resource.
  8. Investing

    Will Shale Oil Companies Go Bankrupt?

    An overview of shale oil companies and the threats they face in the aftermath of the decline in crude oil prices.
  9. Chart Advisor

    Silver Stocks Facing Major Resistance

    Active traders in the commodity markets are taking note of silver.
  10. Investing

    The Case For Stocks Today

    Last week, U.S. equities advanced with the S&P 500 Index notching new records. Investors are now getting nervous with rate and currency volatility spiking.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center