Proved Reserves

The oil and gas a company has demonstrated, to a reasonable certainty, that it can produce economically from known fields with existing technology -- the SEC-defined reserve category, and the only one that belongs in a valuation without heavy caveats. Two things make the number less solid than it looks: it is computed at a PRESCRIBED PRICE (an SEC average for the year), so reserves can be written down in a low-price year and written back up later with no change to the rock; and 'proved undeveloped' reserves inside the total still need capital spent before they produce anything.

Related terms

Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Ancillary Spend per Visit

Open this term in the app → — no account needed; browse the full glossary while you research.