Reserves to Production Ratio
Definition of 'Reserves to Production Ratio'
A ratio indicating the remaining lifespan of a natural resource. This ratio is expressed in terms of years, and is used in forecasting the future availability of a resource to determine project life, income, employment etc. While applicable to all natural resources, it is primarily used in the oil and gas industry.
RPR = amount of known resource
amount used per year
Investopedia explains 'Reserves to Production Ratio'
Usage of a resource per year can be calculated, or estimated, to quite an accurate number. However, reserve quantity of a resource can only be estimated. It is imperative for investors to take into account the possibility of new technology, new discoveries or misevaluation by involved parties.