Reserves & Resources

Reserves and resources are the volumes of oil, gas and other hydrocarbons that are estimated to be commercially recoverable from the fields. All SOGH’s assets are located in Perm and Udmurtia in the Volga-Ural region of Russia.

RESERVES AND RESOURCES OF SOGH:

Category

Oil

 (Mmbbl)

Sales Gas+Gas Liquid

(Mmboe)

TOTAL

(Mmboe)

Proven reserves (1P)

5.5

3.7

9.2

Proven plus probable reserves (2P)

12.6

5.6

18.2

Proven plus probable plus possible reserves (3P)

21.4

10.5

31.9

SOGH’s reserves are presented in the PRMS classification based on the best assessment of the management and independent audit as conducted by DeGolyer & MacNaughton, one of the leading petroleum consulting firms worldwide.

Proven reserves (1P) are those reserves claimed to have a reasonable certainty (normally at least 90% confidence) of being recoverable under existing economic and political conditions, with existing technology.

Probable reserves are reserves that are likely to consist of recoverable oil and gas accumulations. Proven plus probable reserves (2P) must have more than 50 percent probability of being technically and financially recoverable in the current or future financial circumstances.

Possible reserves are reserves for which analyses indicate that it is less likely that they will be able to be recovered. Proven plus probable plus possible reserves (3P) must have more than 10 percent probability of being technically and financially recoverable in the current or future financial circumstances.

Prospective Resources are those quantities of petroleum that are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.

Because of the lack of commerciality or sufficient drilling, the estimation of prospective resources cannot be classified as contingent resources or reserves. SOGH presents the estimates of prospective resources both before and after adjustment for Pg. Total estimated prospective resources are based on a probabile summary of the quantities of the Companys total inventory of prospecive resources.

Application of Pg to estimate the Pg-adjusted prospective resources quantities does not equate prospective resources with reserves or contingent resources. Pg-adjusted prospective resources quantities cannot be compared directly to or aggregateds with either reserves or contingent resources. Estimates of Pg are interpretive and are dependent on the quality and quantity of data currently available. Future data acquisition, such as additional drilling or seismic acquisition, can have a significant effect on Pg estimation. This additional information is not confined to the study area, but also includes data for similar geological settings or technological advancements that could affect the estimation of Pg.