Hi everyone
I found this article on the Society of Petroleum Engineer's website:
www.spe.org/specma/binary/files/6859920Reserves_Audit_Standards_2007.pdf
It is a guide that lists how oil and gas reserves can/are estimated.
It is quite a detailed document, about 27 pages long! I quickly had a read through it and a couple of things stood out:
Firstly, there is no mention that you have to drill x number of wells to get an estimate. In fact, an estimate can be determined by a number of different ways.
Read this section to see what I am talking about:
"Article V—Standards for Estimating Reserves and Other Reserves
Information"
Secondly, it is interesting to note WHO is allowed to estimate a reserve. See this section:
"3.2 Professional Qualifications of Reserves Estimators"
John (Hasleby) is a member of the Society of Petroleum Engineers. Obviously for conflict of interest purposes he won't be doing the estimate.
See this link for what qualifications the director's of GDN have:
http://www.goldenstate.com.au/CorpDir.shtml
Is this a production/commercial well? Only the tests will tell definitively.
I believe that there is a distinct PROBABILITY that it is and that is why I own GDN shares. Note that this is a probability only and I stand to take a large loss if the well is not commercial.
But that is the risk portion of the whole risk/reward concept that goes with owning investments.
Good luck to all holders, lets hope we will be cooking with lots of gas from GDN shortly. :-)
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