The Society of Petroleum Engineers has endorsed the use of probabilistic reserve estimation as part of their voluntary standards, bringing the SPE's standards in line with those of the World Petroleum Congress. (See "In the Counting House," Oil and Gas Investor, October 1996.) Probabilistic methods see reserves as lying along a continuum stretching from more-certain to less-certain. These approaches provide ranges of possible values and give various levels of risk for those ranges. Probabilistic methods, commonly used in the international oil community, can be quite useful in helping people understand risk and reserve categories. In contrast, deterministic methods assign an absolute number of barrels to a category, such as proved-developed-producing, proved-undeveloped, possible or probable. This technique derives a single best estimate of reserves, and the placement of that number within the various classifications serves as an indication of the risk. In estimating proved reserves, for instance, engineers using a deterministic method would arrive at a quantity of petroleum that they were confident could be recovered from known reservoirs under current economic conditions and regulations. If the engineers employed a probabilistic method, they would say that there was at least a 90% probability that the petroleum recovered would be equal to or greater than their estimate.

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