RE: RE: Reserves Close, you also have to divide by the formation volume factor (1.2) to account for the fact that the oil shrinks when it comes to the surface. The reason is that there is a lot of gas in solutions which flashes off. Think of a pop can under pressure. When you open it up the gas fizzes out and you end up with less liquid.
This would be the "best" number under the "Prospective Resources" classification. There are a range of numbers but that is one in the middle. The number includes gas and NGL. I assumed a GOR of 1,000 scf/bbl and an NGL yield of 140 bbl/MMscf. I pulled the Esso paper on Norman Wells and looked at the PVT information to get the GOR and NGL yield. The amount of oil in place is 6.3 billion bbls. Those are MGM numbers adjusted to reflect the reduced WI of the shell farm-in and giving them some reserves for the block they bought in 2012 with Shell.
To give some comfort that those numbers as not just pulled out of the air, I have looked at the logs for wells on Blocks 475, 474 and 466B and done the resource calculations. The MGM numbers make sense. This is as I would expect as Sproule Engineering did the MGM numbers. I have worked with Sproule and they are one of the more respected firms for Canada's frontier.
However, as you have said, it all comes down to the tests and how many of those resources we can get to the surface economically. 6% is a good quess, but it is guess.