Estimates of recoverable hydrocarbon volumes for projects are reported for a large variety of reasons. The recipients of recoverable hydrocarbon reports are typically company directors and management, accountants, investors, investment analysts, financiers, media and regulators.

The evaluation and veracity of recoverable hydrocarbon volumes is wholly dependent upon the skill and knowledge of experienced petroleum evaluators and supervisors. Due to the technically complex and varied nature of evaluation techniques, this aspect of recoverable hydrocarbon reporting cannot be prescriptive or regulated and is outside the scope of this paper.

After a project has been evaluated and the recoverable hydrocarbon volumes estimated, evaluators typically categorise and report recoverable hydrocarbon volumes in terms of existence, maturity and estimate uncertainty. The category terminology used by the evaluators to report the volumes of recoverable hydrocarbons should ideally mean the same thing to all evaluators and recipients of the report. Unfortunately, this is frequently not the case - evaluators and recipients can use similar category terminology that has a different meaning, which leads to confusion as to what is actually being reported. This situation has come about due to the evolution of the SPE reserves standards and needs to be addressed so that the industry can report using terminology that is plainly understood by all.

Prior to about 1980, volumes of recoverable hydrocarbons were mainly estimated using deterministic best estimate techniques. The deterministic reporting definitions at that time mainly considered the existence and maturity of recoverable hydrocarbons. When probabilistic techniques started to become popular after about 1980, these techniques enabled quantification of the range of estimate uncertainty and solutions were sought to integrate the reporting of these new techniques with the existing deterministic reporting definitions.

To cater for both deterministic and probabilistic estimate reporting, the Society of Petroleum Engineers (SPE), in consultation with other oil and gas societies, introduced probabilistic P90, P50 and P10 terminology and established a relationship between these new terms and the existing deterministic proved, probable and possible terminology. The most recent standard published by SPE is known as the SPE/AAPG/WPC/SPEE Petroleum Resources Management System (SPE PRMS, 2007).

Due to the evolution of the SPE standards however, the current standard has retained a discontinuity between the deterministic and probabilistic definitions, which was introduced when the probabilistic terminology was first equated to the deterministic definitions.

The discontinuity has occurred because deterministic techniques were originally focussed on the existence and maturity of estimates whereas probabilistic techniques are focussed on the uncertainty associated with estimates—two very different concepts.

The discontinuity manifests itself in two ways:

1. When deterministic and probabilistic proved, probable and possible estimates are compared they will usually not be equal—both numerically and in physical meaning.
2. Probabilistic estimating techniques have lost the practical use of the deterministic possible category, which was originally intended to describe recoverable hydrocarbon volumes that were inferred to exist but had not yet been penetrated by a well.

The resolution of these two issues requires stepping back to the original 1955 deterministic definitions and then correctly applying uncertainty techniques to those definitions. The result is a system that aligns deterministic and probabilistic techniques and enables the deterministic proved, probable and possible terminology to continue in the form that it was originally intended and is still being used today. The most important benefit however would be that all industry stakeholders would once again be aligned in their understanding of the definitions, thereby demonstrating that the industry can effectively regulate itself.