Probable Reserves

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Dictionary Says

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 Says

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.



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