According to the definitions approved by the SPE and the WPC, proven reserves are the quantities of oil which, by analysis of geological and engineering data, can be estimated with reasonable certainty as being, from a given date, commercially recoverable from known deposits and under current economic conditions, operating methods and government regulations.
If deterministic methods are used, the term "reasonable certainty" is intended to express a high degree of confidence that the quantities will be recovered.
If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will in fact be equal to or exceed the estimate.
The definition of current economic conditions should include historical oil prices and associated costs.
Usually, reserves are considered proven if the production capacity of the deposit is supported by the current production or by formation tests. In this context, the term ‘proven’ refers to the actual quantities of oil reserves and not just to the productivity of the well or deposit.
The area of the deposit considered as proven includes (1) the area delineated by drilling and defined by fluid contacts, if applicable, and (2) the undrilled portions of the reservoir that can reasonably be considered commercially productive on the basis of available geological and engineering data.
Reserves may be classified as proven if the facilities to process and transport those reserves to the market are operational at the time of the estimate or if there is a reasonable expectation that such facilities will be installed.