Rusneftegaz can announce that an external audit of our known hydrocarbon reserves has been completed in accordance with the standards prescribed in the Petroleum Resources Management System, otherwise known as PRMS. The survey, which was conducted by DeGolyer and MacNaughton, provides an opinion with regard to both the precision and quality of the estimates formulated by our organization when calculating the extent of our petroleum deposits. In this instance, Rusneftegaz provided the inspectors with all material accounts, records and reports necessary, not limited to but including geological data, details regarding the reservoir engineering procedures utilized, in conjunction with any other evidence deemed relevant to this investigation. It should be noted that no independent verification of the information furnished by Rusneftegaz was conducted by DeGolyer and MacNaughton, including through on-site visits to our production areas, as the provision made by our company was considered both appropriate and sufficient for the analysis. The detailed study pertains to the condition of all our known and viable reserves as of 31 December 2016, with the intention that the facts enclosed in the audit can be used when formulating our consolidated financial statements for the past twelve months. The inspection itself was organized by a delegation of highly-experienced staff, all of whom earned at a minimum a bachelor’s degree in petroleum engineering, geosciences or a related discipline, in addition to holding the relevant professional license or registration to operate in this field from either a recognized self-regulating organization or an appropriate governmental authority.
In total, 15,0% of our total proven remaining hydrocarbon reserves were subjected to review, with the auditors making observations regarding the suitability of the methodologies employed when estimating the volume of our reserves and the quality of the data used when making such calculations. Once these pertinent facts had been established, the integrity of the final computation was considered by accounting for the PRMS classification of each individual reserve, in accordance with the appropriate definitions, and to the extent the final estimation process was reasonable and thorough. Following the audit, the inspectors determined a final estimation of the quantity of recoverable hydrocarbons, in conjunction with an evaluation of the uncertainty affiliated with such a judgment. However, the statements regarding the proven reserves made in the report are merely approximations and are not exact, and if excavated, could be significantly greater or less than the stated figures. These totals are only to be revised if new or additional engineering or geologic data becomes available, or for the tabulations of the monetary value of these deposits, there are fluctuations in commodity prices.
At the end of the last financial year, management believed that our company held 168,38 million barrels of oil equivalent, abbreviated to MMBoe, across all our extraction sites. All of these locations are situated in the Timan-Pechora basin of Western Siberia, across both the Komi Republic and the Khanty-Mansi Autonomous Okrug, where our organization operates twenty-six long-established oilfields. Each of these areas is considered to be highly productive and of good quality, despite indications of depletion, although it has been observed that the majority of reservoirs are smaller than average. Ultimately, the audit concluded that both the fiscal and geological calculations made by Rusneftegaz are reasonable, and within 5,0% of each estimate of DeGolyer and MacNaughton. Our proven reserves were primarily evaluated using performance and volumetric methodologies, or a combination of the two in unison. Under certain circumstances, analogy methods were also developed, but were mostly eschewed in favor of other techniques. The former involved utilizing decline curve analysis, whereas the latter used extrapolations of previous pressure and production data. For wells currently operating, future extraction rates were projected by examining performance statistics in prior years. If no downward trends were observed, forecasts remained consistent with contemporary data, or adjusted for the impact of potential curtailment when necessary until a decline was anticipated, with this alteration accounting for an approximated rate of depletion. If a negative pattern was previously determined, this is then used as a basis for predicting future production rates.