Reserve-Replacement Ratio
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Definition of 'Reserve-Replacement Ratio'
A metric used by investors to judge the operating performance of an oil and gas exploration and production company. The reserve-replacement ratio measures the amount of proved reserves added to a company's reserve base during the year relative to the amount of oil and gas produced. During stable demand condition environments a company's reserve replacement ratio must be at least 100% for the company to stay in business long-term; otherwise, it will eventually run out of oil.
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Investopedia explains 'Reserve-Replacement Ratio'
The reserve-replacement ratio is just one method investors should use to get an accurate picture of how well an oil company is performing. This ratio should only be looked at in the context of other operating metrics. A high reserve-replacement ratio achieved through organic replacement is considered better than a high reserve-replacement ratio achieved through purchasing proved reserves.
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Search results for 'Reserve-Replacement Ratio'
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http://stocks.investopedia.com/stock-analysis/2009/Oil-Companies-With-High-Reserve-Replacement-Ratios-CRZO-UPL-XOM-GDP1012.aspx
... One of the metrics that is used by investors to judge the operating performance
of the exploration and production industry is the reserve-replacement ratio. ...
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http://stocks.investopedia.com/stock-analysis/2011/Statoil-Bargain-Or-Bull-Trap--STO-WLL-XEC-APA-PBR-UPL-COP0211.aspx
... Making matters worse, the company once again delivered a reserve replacement
ratio below 100%. Statoil found only 87% as much new ...
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