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American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc.

Abstract

Estimates of hydrocarbon reserves have been in demand over the past thirty years. Examples follow to illustrate the necessity to try all approaches and effectively correct each prediction through use of newly acquired facts. All available details should be accurately compiled until calculated details are generated.

Methods of geologic basin analysis are discussed based on periodic re-evaluations of new field discoveries mad past performance of producing fields. Each basin's economic profile is determined by the rate of exploratory drilling and the ratio of remaining reserves to current production.

Although the U. S. to date has produced nearly one-third of the world's crude oil, our world economic position is being challenged more frequently and our ability to reliably forecast our remaining recoverable reserves assumes new importance with each challenge.

Introduction

Remaining hydrocarbon reserves in the U. S. are becoming increasingly important to the nation's economic and political future. A new pattern of exploration economics is now developing which indicates new drilling patterns and more efficient recovery. An increased price-cost ratio will immediately expand estimates of undiscovered recoverable resources and, at some threshold level recovery percentages for discovered petroleum will improve. Economists can readily see the effects of increased price-cost ratios that have developed since the 1973 embargo. The question now is "what will be the effect of the next world embargo?" The following statement by Frank G. Zarb outlining national objectives was read before a 1975 Senate hearing on "The Economic Impact of President Ford's Energy Program":

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