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The valuation of reserves and resources is about converting a quantity forecast to a value forecast. In that sense, valuation is part of “evaluation,” which is defined within the Petroleum Resources Management System (PRMS 2018,  Appendix A—Glossary) as: “The geosciences, engineering, and associated studies, including economic analyses, conducted on a petroleum exploration, development, or producing project resulting in estimates of the quantities that can be recovered and sold and the associated cash flow under defined forward conditions.” Results from the conversion of a quantity forecast into a cash-flow value assessment may then be used in internal entity investment decision-making regarding commitment of funds for petroleum resources development. The projects can be from either an existing developed project or a future planned petroleum recovery project. The value results will be used to support public disclosures of reserves and resources, subject to regulatory reporting requirements.

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