Investopedia

Continue to Site »

Reserve-Replacement Ratio

Filed Under » , ,
Dictionary Says

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.
Investopedia Says

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.

Articles Of Interest

  1.

    Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.

  2. Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.

  3. Oil: A Big Investment With Big Tax Breaks

    Oil and gas investments can provide unmatched deduction potential for accredited investors.

  4. Accounting For Differences In Oil And Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.

  5. Oil And Gas Industry Primer

    Before jumping into this hot sector, learn how these companies make their money.

  6. Unearth Profits In Oil Exploration And Production

    Drill down into financial statements to tap into the right companies and let returns flow.

  7. Is The Gold Pain Over?

    After falling more than 13%, gold has staged a rebound but is that for fundamental reasons or the work of value investors? Will gold reward investors who didn't give up or is there more pain ...

  8. Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.

  9. What Is Wrong With Gold?

    Despite its historic and symbolic appeal, this metal is simply a commodity. Here we explore its meaning as an investment.

  10. The Most Affordable Precious Metals ETFs

    Precious metals ETFs invest in both physical commodities and futures contracts for precious metals.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center