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This chapter describes the use of a reserves estimate to prepare an economic evaluation and perhaps then place a value on the reserves. This chapter often refers to a document titled Perspectives on the Fair Market Value of Oil and Gas Interests1  published by the Society of Petroleum Evaluation Engineers (SPEE) in the spring of 2002. In this chapter, that document is referred to as the SPEE FMV document. To value reserves, the nature of the ownership must be considered. Reserves ownership is usually derived from contractual agreements that specify the obligations of the parties to those agreements for the payment of costs and the sharing of revenues. These agreements often include specific commitment obligations such as the drilling of wells. A common arrangement for such contracts is the oil and gas lease. Another common contractual structure is the production-sharing arrangement.  Appendix A , which describes common types of oil and gas property interests, is from the SPEE FMV document. 1 

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