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Comparison of Petroleum and Mineral Resources Classification David MacDonald Segment Reserves Manager SPE PRMS Operational and Economic Status Potentially Commercial PROSPECTIVE RESOURCES Justified for Development Development Pending Development Unclarified or On Hold Development not Viable Prospect Lead Play UNRECOVERABLE Range of Uncertainty Not to scale Project Maturity Approved for Development Higher Risk CONTINGENT RESOURCES Increasing Chance of Commerciality Developed Undeveloped Marginal Sub-Marginal Commercial Sub-Commercial Commercial DISCOVERED IIP On Production RESERVES UNRECOVERABLE UNDISCOVERED IIP TOTAL PETROLEUM INITIALLY INITIALLY-IN-PLACE (IIP) PRODUCTION Lower Risk Project Maturity Sub-classes PRMS – CRIRSCO comparison Petroleum (SPE/WPC/AAPG/SPEE 2007) Minerals (CRIRSCO 2006) MINERAL RESERVES RESERVES 1P 2P Possible 3P Proved Increasing Commercial Certainty marginal undeveloped Probable CONTINGENT RESOURCES 2C 1C 3C Potentially Commercial PROSPECTIVE RESOURCES Low Estimate Best Estimate the Modifying Factors developed P10 P50 P90 Proved sub-marginal Commercial Sub-Commercial Commercial DISCOVERED IIP PRODUCTION UNRECOVERABLE UNDISCOVERED IIP TOTAL PETROLEUM INITIALLY-IN-PLACE (IIP) PRODUCTION Probable MINERAL RESOURCES Measured Indicated Inferred Discovered Not Economic EXPLORATION RESULTS High Estimate UNRECOVERABLE Range of Technical Uncertainty Not to scale Increasing level of geoscientific knowledge and confidence Common principles • Estimated by competent persons or qualified evaluators • Reserves are the marketable/extractable volume to which entitlement has been conferred • Reserves are the integration of a project’s production profile • Project future net revenue is the integration of cash flow associated with a project and is impacted by production costs and commodity price • Multiple projects may be applied to the same accumulation, sequentially or concurrently • All projects involve risk and uncertainty Differences to be aware of • Volume Classified − PRMS classifies all hydrocarbons, whether discovered or undiscovered, commercial or sub commercial − CRIRSCO classifies those classes expected to be economic − PRMS estimates the sales quantity delivered − CRIRSCO estimates run-of-mine tonnage and grade • Volumes Reported − In general, for petroleum, only proved reserves are reported externally − For minerals, proved and probable reserves − For petroleum, only entitlement reserves after royalty are reported − For minerals, reserves are reported on a gross basis with share shown separately Integration of CRIRSCO, SPE and IASB Maintained separately in linked websites Petroleum Classification, Principles, Definitions & Guidelines (SPE) Minerals Classification, Principles, Definitions & Guidelines (CRIRSCO) Convergence Mapping Module IASB Accounting Standards