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Understanding Oil & Gas Terminology

Understanding Oil & Gas Terminology

Quattro Exploration and Production Ltd ($QXP) recently put out a news release in regard to an increase in estimated recoverable resources from original oil in place. For the average energy executive or financial analyst this makes a lot of sense. However, for the rest of us it would be nice to understand some of these industry terms so we can make a more informed investment decision before passing up an investment opportunity due to terminology.

According to the AAPG Wiki, a publicly accessible resource maintained by the American Association of Petroleum Geologists (http://wiki.aapg.org/Reserves_estimation) the follow definitions apply:

  • Original oil in place (OOIP) and original gas in place (OGIP) refer to the total volume of hydrocarbon stored in a reservoir prior to production.
  • Reserves or recoverable reserves are the volume of hydrocarbons that can be profitably extracted from a reservoir using existing technology to access and produce the hydrocarbons.
  • Resources are reserves plus all other hydrocarbons that may eventually become producible; this includes known oil and gas deposits present that cannot be technologically or economically recovered (OOIP and OGIP) as well as other undiscovered potential reserves.

Estimating hydrocarbon reserves is a complex process that involves integrating geological and engineering data. The good news, over the last 60 years the energy industry has collected enormous amounts of data, we have the computing horse-power to process the data and we have structured methodologies to estimate recoverable reserves with some certainty.

If you are an investor interested in investing in junior oil and gas companies, you need to learn the terminologies but more importantly you need to learn how to determine value based on the numbers being provided by the corporation.

February 2, 2016, CALGARY, ALBERTA - QUATTRO Exploration and Production Ltd. ("QUATTRO" or the "Company") (TSX: QXP) Quattro Exploration and Production Ltd. ("Quattro" or the "Company") is pleased to announce an increase in its recoverable resources in Saskatchewan to 18 million barrels of oil from an estimated 120 million barrels of original oil in place (OOIP)**….  

Click here to view the full press release:

View Quattro Corporate profile on 80-20 Connect: $QXP

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