Night School – Petroleum Resource Management Systems (PRMS) (Virtual Course)

This series of four two-hour lectures will describe how the SPE 2018 Petroleum Resources Management System (“PRMS”) categorises the technical and commercial maturity of oil and gas deposits into reserves, contingent resources, prospective resources and unrecoverable. It will illustrate through worked examples how this popular and rigorous system underpins oil & gas company portfolio management (find, develop, produce, trade); asset debt capacity; and equity investment. At the end of the course, participants will be able to:

• Categorise hydrocarbon volumes into reserves, contingent resources, prospective resources and unrecoverable
• Reclassify resources through the field life cycle
• Define incremental projects
• Capture technical and commercial risk and uncertainty
• Apply the concept of economic producibility
• Calculate resource entitlement and recognition
• Report incremental and scenario volumes
• Compare deterministic vs probabilistic methods
• Aggregate resources
• Adjust resource volumes for fuel consumed in operations and other adjustments

Session 1 | Overivew
Facilitator: Tim Lines
Date: Wednesday 24 February 2021
6:00pm – 8:00pm

1. Basic Concepts
2. PRMS in perspective

• Major principles: the classification framework; the reservoir, the project, the property

1. Commercial Maturity (classify by chance of commerciality)
2. Technical Maturity (categorise by volumetric uncertainty)
3. Private study questions

Session 2 | A deep dive into reserves vs contingent resources vs prospective resources
Facilitator: Tim Lines
Date: Wednesday 3 March 2021
6:00pm – 8:00pm

1. Discussion of private study questions
2. Moving a project from prospective resources to contingent resources

• The multiple criteria that need to be satisfied before assigning reserves to a project

1. Case study: moving a project from contingent resources to reserves
2. Credibly estimating the probability of development
3. Private study questions

Session 3 | A miscellany of very important concepts
Facilitator: Tim Lines
Date: Wednesday 10 March 2021
6:00pm – 8:00pm

1. Discussion of private study questions
2. What quantity of resources are yours? – Entitlement and recognition under different jurisdictions

• Licence extensions

1. Aggregation of chances of discovery of several prospects
2. When to use incremental resources vs scenario resources
3. Deterministic vs probabilistic estimation of volumetric uncertainty

• Applying the probability of development to contingent and prospective resources
• Reservoir simulation

1. Aggregation of same-category resources in a company or basin – arithmetic or statistical?
2. Adjustments from reservoir volumes to resources (fuel gas, gas shrinkage, etc)
3. Private study questions

Session 4 | Raising cash and doing deals
Facilitator: Tim Lines
Date: Wednesday 17 March 2021
6:00pm – 8:00pm

1. Discussion of private study questions
2. How deals are put together; a checklist of what (some) investors are looking for

• Typical and not-so-typical deal structures; and the part PRMS plays

1. Sanitised deals
   1. Deal 1: funding a mature gas field redevelopment (Europe)
   2. Deal 2: acquiring a distressed producing gas company (N America)
   3. Deal 3: can we apply a similar methodology to a geothermal energy investment opportunity (N America)?
2. Private study questions and further reading

Who should attend:
Aspiring, future leaders in the oil and gas industry who want to acquire skills beyond the academic and technical and obtain insights into the commercially orientated analysis. Acquire the global perspectives essential to professional success.

To access member-only events or to benefit from the reduced member fees please visit https://www.ges-gb.org.uk/membership/ to find out how to become a PESGB member.

Tim Lines has 30+ years’ experience of oil and gas company reserves determinations and valuations; due diligence; and debt and equity fundraising. He has been involved in projects in about 40 countries in the last 20 years. This year he has acted as the Competent Person for two resources and valuation reports for the London AIM stock market, one concerning an oilfield development in Cameroon; and the other a gas field redevelopment in UK. He has served as an expert witness in commercial disputes in Azerbaijan, Ghana, Israel and Russia, and for the Enforcement & Financial Crimes Division of the UK Financial Services Agency (now FCA).

He was the 2019/2020 chair of the SPE Distinguished Lecturers’ Committee, his objective being to greatly increase the proportion of Distinguished Lecturers who are women and / or who were raised and work in Africa and Asia – to rebalance global role models to students and young professionals.

He is collaborating with Portsmouth University students and data scientists to reduce inefficiencies in bringing the right N American deals to investors by automating the calculation of reservoir and financial performance metrics across multiple opportunities.

He founded Oilfield International (“OIL”) in 1990. The firm has partners in Russia, Middle East, Africa, Far East, S and N America and provides a.o. valuation services to investors and sellers of assets; and access to capital.