Why our reserves definitions don't work anymore

Our current set of SPE reserves definitions, and their Security & Exchange Commission (SEC) counterparts, give a very misleading evaluation in a volatile pricing environment when dealing with mature, long life properties. Previous attempts to tighten the definitions through the use of ''snapshot'' price assumptions have had the opposite effect and have corrupted the technical uncertainty aspects of the definitions. Probabilistic handling of pricing data allows evaluations to be performed that quantify economic uncertainty, thus removing the need for snapshot price assumptions or for a price forecast at all. The interaction between technical and economic uncertainties in reserves evaluation is discussed in the light of these results and the concept of a reference price for reserves evaluations is introduced.