India's Hydrocarbon Outlook – 2022-2023

119 DGH: 3 DECADES OF UNLOCKING INDIA'S HYDROCARBON POTENTIAL 3. Discussion on Economic evaluation of petroleum resources and its importance to Financial lending institutions, Investment Banks and Stock-Exchanges. Key Takeaways: A standard by which value and performance of assets may be compared to other companies around the world Allow access to international financial institutions m Stock exchanges m Investment banks Determination of Discovery Status: A discovered petroleum accumulation is determined to exist when one or more exploratory wells have established through testing, sampling, and/or logging the existence of a significant quantity of potentially recoverable hydrocarbons and thus have established a known accumulation. “Significant” implies that there is evidence of a sufficient quantity of petroleum to justify estimating the in-place quantity demonstrated by the well(s) and for evaluating the potential for commercial recovery. Estimation of In-Place: Uncertainty in Assessment Method over Project Life Even when using good data sets and reasonable methods, estimates are inherently uncertain Develop range of estimates m Low m Best m High Build a case to support the estimates m Document the data and interpretation used to build the case Range of uncertainty should decrease over time with additional data m More wells m Additional seismic m Pressure/Production data Volumetric estimates can be made using probabilistic or deterministic methods m Probabilistic Statistical Analysis Using Established Monte Carlo Methodology Attractive Due to Rigor; Difficult to Explicitly Defend Spreadsheet based Crystal Ball, @Risk, GEOX, etc 3D Model based Petrel, RMS, etc Why and How are Reserves estimates used? A standard by which value and performance of the company is measured m Gives a “snapshot” of the company’s performance at a given data Allows the company and its investors to compare its performance to similar companies m To attract and protect investors Long and short term planning m To compare investment opportunities within company m To evaluate the effectiveness of investment programs Government reporting and shareholders m Annual Report to Shareholders – Listed and non-listed companies “Significant” implies that there is evidence of a sufficient quantity of petroleum to justify estimating the in-place quantity demonstrated by the well(s) and for evaluating the potential for commercial recovery.