The growth of oil producers is often tracked by a measurement known as the reserve replacement ratio. This compares the proven reserves of oil and gas to actual levels produced. If producers are unable to keep this percentage above 100 percent then they typically realize a loss in share price. To be considered “proven” producers need to be 90 percent positive these resources exist and are extractable. The catch with proven reserves is that they cannot be accounted for if it doesn’t make financial sense to recover the oil or gas. In the past year, this caveat has begun creating issues for producers. According to EY records , 11 exploration and production companies in the United States realized a collective loss of over 2.12 billion barrels of oil in proved reserves for 2015. The majority of this figure was contributed by natural gas, a market seriously oversupplied. Because of […]