Common use of Proved Undeveloped Reserves Clause in Contracts

Proved Undeveloped Reserves. These are Proved Reserves which are expected to be recovered from new xxxxx on undrilled acreage, or from existing xxxxx where relatively major expenditures are required for recompletion. Reserves on undrilled acreage are limited to those drilling units offsetting productive units, which are virtually certain of production when drilled. Proved Reserves for other undrilled units can be claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive formation. Estimates for Proved Undeveloped Reserves do not include estimates relating to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual tests in the area in the same reservoir.