What Are Proven Reserves?

Proved reserves refer to those reserves that can be mined with existing technologies after detailed exploration under current and expected local economic conditions.

Proved reserves are one of the important basis for mine construction, national economic planning, and rational planning of industrial and agricultural layout. In Europe and the United States, proven reserves are right

Explanation of proven reserves in academic literature:

Proved Reserves Mineral Reserves

Mineral reserves are referred to as reserves, and generally refer to the reserves of mineral resources. It is expressed in terms of ore reserves, metal reserves or useful component reserves, useful mineral reserves, etc., most of which are measured by weight (tons, kilograms, carats), and a few by volume (cubic meters).

Classification of Mineral Reserves: According to the technical and economic feasibility of proven mineral development and utilization, China divides mineral reserves into two categories: available reserves and temporarily unavailable reserves. The former refers to the reserves that can be exploited under the current technical and economic conditions, also known as the balances in the balance sheet; the latter refers to the low ore grade, thin ore body thickness, complex hydrogeological or engineering geological conditions of the deposit, unresolved ore dressing technology, or technical indicators For reasons such as too low, there is currently no development and utilization value. Once the selection technology and economic conditions change, it may be exploited. It is also called off-balance sheet reserves.

Mineral reserves are the main material result of geological exploration work, and are the basis for formulating mine construction plans, designing and constructing mines, and the material basis for mining and production. Mineral reserves are divided into ore reserves, metal reserves, or useful mineral reserves by material composition. When calculating ore reserves, the ore industry indicators should be taken into account. Reserves are measured in units of weight. Most minerals are expressed in tons, a few precious metals are in kilograms, gemstones are sometimes in grams; building materials in non-metallic minerals are in cubic meters. According to the accuracy of reserves and mining applications, mineral reserves are also divided into several categories and grades ^[6] .

Mineral reserves refer to the amount of minerals that are concentrated and buried when the mineral content is above the border grade. The most basic indicator of mineral resource evaluation. Due to the different degrees and accuracy of geological exploration work, the degree of exposure and control varies greatly. At present, there is no uniform grading standard in the world. Europe and the United States use a three-level system. For example, the United Kingdom and Canada are divided into "confirmed", "approximate", and "possible" levels. , B, C ₁ , C ₂ ). China has adopted a five-tier system since 1949. According to the "Interim Specification for the Classification of Mineral Reserves" formulated by the Ministry of Geology and Mineral Resources and the National Mineral Reserves Committee in 1959, it is divided into 4 categories and 5 grades: Category 1, Mining Reserves-Grade A, which is the reserves delineated by mining tunnels. The reserves to be mined during the production of the mine can be used as the basis for preparing the production plan of the enterprise; the second type, the design reserves-A + B + C level, is the reserves delineated by tunnels or boreholes or the drilling network after detailed exploration Controlled reserves are the main reserves obtained during geological exploration, which can be used as the basis for mining enterprise design and infrastructure investment. Type 3, Vision Reserves-Class D, are distribution boundaries determined based on geological survey data or geophysical exploration methods. The reserves can be used as the basis for further deployment of geological exploration work and the overall planning of the mine construction. It can also be used for the design of small mines with Class C; Type 4, geological reserves are based on regional geological surveys, ore distribution rules, or The tectonic unit combines the mineralization laws of known minerals to predict reserves. This can only be used as a reference for the preparation of mineral censuses and formulation of long-term plans, or as a reference. Geological survey and prospecting Design. The above-mentioned mining reserves and design reserves (A + B + C) are collectively referred to as industrial reserves, and industrial reserves and prospective reserves (A + B + C + D) are collectively referred to as proven reserves . The accumulated proven reserves minus the reserves that have been mined and lost over the years are the actual retained reserves. In addition, the current mineral reserves available for mining companies' production technology and economic conditions are also referred to as in-balance sheet reserves. For some minerals, due to low beneficial components or mineral content, thin ore bodies, or particularly complicated mining conditions, the current Mining and processing technologies have not been resolved, and the reserves that are still difficult to use are called off-balance sheet reserves. When conducting economic evaluation of mineral resources, special attention should be paid to industrial reserves and on-balanced proven reserves, because the former is a reliable basis for mine design, construction and investment, while the latter is the basic data for planning and designing the scale and layout of industrial production. Geological reserves and off-balance sheet proven reserves can be upgraded to on-balance sheet proven reserves and industrial reserves after geological work. They have the value of reserve resources and have certain reference value for the development and utilization of land resources and industrial layout planning ^[7] .

Proved Reserves Industrial Reserves

Industrial reserves are a general term for mining reserves and design reserves. For solid minerals, the ore reserve boundary is first delineated by the ore boundary grade, which is called the off-balance sheet reserve boundary, and then the mineable boundary is delineated according to the minimum industrial grade of the ore, the minimum recoverable thickness of the ore body, and the maximum allowable boulder thickness. The ore reserves between the recoverable boundary and the off-balance sheet reserves boundary are called off-balance sheet ore reserves, referred to as off-balance sheet reserves, that is, ore reserves without industrial value at that time; the ore reserves within the recoverable boundary are called on-balance table ore Reserves, referred to as reserves in the table. The reserves in the table can be divided into four levels of A, B, C, and D according to the degree of exploration and research; they can also be referred to as mining reserves according to the use of the reserves, called design reserves in grades B and C, and prospective reserves in grade D ^{[8 ]} .

Proved Reserve Evaluation Well

Evaluation wells are for industrial oil and gas fields, in order to find out the types, structural morphology, thickness and physical properties of oil and gas reservoirs, evaluate the scale, production capacity, and economic value of new oil and gas fields, and finally drill the wells for the purpose of establishing proven reserves ^{[ 9]} .

Proved Reserves Basic Proved Reserves

For complex fault blocks, lithological traps, and complex fractured oil and gas fields, after completing detailed seismic investigations, precise investigations, or 3D earthquakes, and drilling evaluation wells, the reserve calculation parameters are basically complete, and the oil and gas areas are basically controlled. Calculated reserves (equivalent to Grade C reserves of other minerals). Because the lithology of these types of oil and gas fields is relatively complicated, it is impossible to know clearly in the short term. In order to improve economic benefits, rolling exploration and development is often adopted. Therefore, some development wells have the task of concurrent exploration wells, and various parameters of the quasi-reservoir should be supplemented. Within three years of rolling exploration and development, after review, it can be directly upgraded to developed proved reserves ^[9] .

Proved Reserve Controlled Reserve

Controlled reserves refers to the discovery of industrial oil and gas flows through pre-exploration wells, and a small number of evaluation wells have been drilled on the traps. The trap shapes have been identified, the types of oil and gas reservoirs and the types of reservoir deposits have been initially determined, and the oil and gas areas can be generally controlled And thickness trends, the reserves (equivalent to CD-level reserves) calculated after preliminary assessments of the complexity of oil and gas reservoirs, production capacity, and oil and gas quality. Controlling reserves can be used as a basis for further evaluation of drilling and preparation of medium- and long-term development plans. This level of reserves is equivalent to the indicated reserves in the reserves classification of some countries in North and South America ^[9] .

Proven reserves

Prospecting wells are wells that have been proven to be promising oil and gas structures through exploration, in order to find out the formation's oil and gas conditions, and to obtain the geological data required for oilfield development. According to the specific tasks of wells, exploration wells are divided into three types: pre-exploration wells, side exploration wells, and evaluation wells. According to the nature of work, it can be divided into categories such as preliminary exploration and detailed exploration. Some people call the first exploration well in the new area called the wildcat well, that is, the first exploration well ^[9] .