This paper reviews the growth of the public oil and gas reserves acquisition industry and the underlying economic fundamentals that create buying opportunities. It presents an analysis of the methods and techniques used in the acquisition of oil and gas properties including the identification of properties to be acquired, their sources, the selection and screening process, predicting and developing ranges of expected reserve recovery. Program "deal structure" objectives and the predominant types available and the resultant economic impact are examined. In addition, general and specific investment criteria are reviewed along with the risk factors applied to cash flow predictions. The role of financial ratios and tests such as "income to investment ratios", "payout determinations", internal rates of return, pricing sensitivity analysis and other types of financial and economic analysis in the acquisition process. The impact of price escalation on "risked" reserves for the purpose of determining a range of acceptable purchase values. Also, a review of the role of land, accounting/financial, geology, engineering and operation disciplines in property acquisition will be included in the paper.

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