Tuesday, November 28, 2017
The reserve replacement ratio is used as a quick reference for stakeholders to determine if a company is adding to its oil and gas reserves. If the ratio falls under 1. it indicates that additions to reserves were less than the company’s production. It provides no meaningful guidance with respect to a company’s resources. There is an abundance of development opportunities in the Canadian resource plays.
Canada as a whole was fortunate to run a 1.20 ratio for nearly a decade to 2014. The situation changed dramatically after the 2015-2016 oil price collapse which saw the ratio sink to 0.14. In 2016, it bumped up slightly to 0.36. These numbers indicate the Western Canadian Sedimentary basin may appear to have entered a period of rapid and, unless prices dramatically improve, inexorable decline.
Nora Stewart, Senior Vice President, Reserves Certification and Steven Golko, Vice President New Ventures and Strategic Advisory sat down with Maurice Smith from JWN Energy, Daily Oil Bulletin to discuss how the basin is entering a new era of abundance with the development of Canada’s resource plays and the benefits to company growth.