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Introduction There are currently almost as many definitions for reserves as there are evaluators, oil and as companies, financial agencies securities commissions, and government departments. Each one uses its own version f the definitions for its own purposes. But today with the unstable economic conditions in the oil and gas industry, the lower quality of reservoirs that are being discovered, and the new recovery methods that are being developed, estimating the reserves is becoming more unpredictable. These factors have made it imperative to develop a universal set of definitions for reserves that will meet the needs of all users. Also important is the need for guidelines so that all evaluators and users will understand the Reserves Definition Committee, seated left to right: D. W. Tull, G. A. Warne, G J DeSorcy and D.R. Collyer. Standing left to right: B. R. Ashton. W. D. Robertson. J. G. Robinson. G.R. Campbell and R.V. Lang (missing J. Drury). Illustrations available in full paper. Process of calculating and subsequently c1assifying reserves, of oil and gas and related substances. The task of writing the reserves definitions was undertaken by the Petroleum Society's Standing Committee on Reserves Definitions. This document comprises the committee's 1993 report. The definitions developed by this committee are similar to those currently in use, particularly in North America. They have been reviewed by users in the oil and gas industry and representatives from regulatory agencies, government departments, industry associations, and technical and professional organizations. This document presents the definitions of oil and gas resources and reserves and a recommended reserves classification system. Guidelines to illustrate the application of the definitions are presented and at the end of the document is a glossary of related terms that have been prepared in conjunction with the definitions. The Standing Committee believes the recommended definitions and guidelines are suitable for use with respect to all types of oil and gas and related substances, including offshore situations and oil sands. Although those segments of the industry have used somewhat different terms and definitions the principles reflected in the recommended definitions are applicable. The fundamental principle is that those quantities that are known to exist and to be economically recoverable are reserves. The total qualities, whether or not they have been discovered, are resources Reserves and resources are further categorized depending on the level of certainty that they will be recovered. It is the view of the Standing Committee that current reserves estimation methods and categories, in general, match the recommend definitions and guidelines. The committee, therefore, does not expect that major changes to reserves estimates would result from adoption of the definitions, although it recognizes that for some specific reserves estimates (generally for small pools) changes could be significant. The committee hopes that, over time, reserves evaluators will increasingly conform to the recommendations and thus contribute to the overall quality and consistency of reserves estimates. This document has been prepared by the Standing Committee on Reserves Definitions and sponsored by The Petroleum Society of the Canadian Institute of Mining, Metallurgy and Petroleum. The committee is composed of representatives or oil and gas companies, geological and petroleum engineering consulting firms, Canadian industry associations, financial and accounting organizations, regulatory agencies, and government.

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Introduction The sour gas industry has been active in Alberta for some 50 years. About one-third of the remaining reserves of gas contain hydrogen sulphide and are thereby considered sour gas. The future potential reserves of Alberta are estimated to range from 2,000 to 4,000 billion cubic metres and it is anticipated that up to three quarters of these could be found in geological regions that typically contain hydrogen sulphide. For the Western Canadian Sedimentary Basin, future potential reserves will be much greater, and a significant percentage may be sour. The Energy and Utilities Board (EUB) is responsible for the approval of proposed sour gas facilities in the Province of Alberta and for the regulation of sour gas facilities and operations. Sour gas is very toxic to humans and animals at relatively low concentrations. Therefore, the exploration for and production of sour gas must be undertaken with specialized equipment and procedures to assure worker and public safety, as well as protection of the environment. As a result of increasing concerns regarding growth and operation of sour gas wells and facilities near both rural and urban development, a review of the adequacy of current regulatory requirements was deemed desirable by the EUB. The EUB wanted this review to include the widest spectrum of input from those stakeholders ultimately affected by sour gas development, and in particular, the general public living in sour gas areas. To conduct this review, the EUB, in January, 2000, formed an Advisory Committee on Public Safety and Sour Gas (the Advisory Committee) to review and make recommendations respecting the sour gas regulatory system. The Advisory Committee was made up of 22 members, reflecting a broad cross-section of stakeholders affected by sour gas development. It also included experts from disciplines such as risk management and health. The result was a committee with members from the public, including First Nations, municipalities, the local development industry, regional health authorities, relevant government departments, universities, and the sour gas industry. The Advisory Committee's mandate centred on a review and assessment of public health and safety-related requirements currently being applied to the approval, development, and operation of sour gas facilities in Alberta. Although the Committee's focus was on public health and safety, many of its recommendations are broad in nature and have the potential to address essentially all concerns related to sour gas. The Advisory Committee used a variety of methods to improve its understanding of the current regulatory system and to receive input into its effectiveness. These included presentations by a number of experts on various related issues, a series of regional discussion sessions in twelve provincial locations directly affected by sour gas development, meetings in First Nations and Metis communities, a random telephone survey, response forms, and written submissions. The Advisory Committee then prepared what it called a Directions document setting out the direction the Committee was moving towards in terms of its recommendations. It then went back to the communities and sought input on the Directions document.