Reserves MBOE Cum'l Cash Flow PV10 PDNP 400,000 $ 8,000,000 $ 275,000 you are meeting with a company that is presenting an asset that is available for purchase. Their presentation included a summary from their reserves report in which the seller noted that the PDNP reserves above were behind pipe reserves. Cash flow and Cumulative PV10 for the behind pipe reserves were presented as well. Following the meeting, your evaluation team mentions that the behind pipe reserves appeared to be an excellent target for increasing the value of the asset once you buy it. Based on your knowledge of reserves and financial metrics, why did the team make that statement after only a cursory review of the assets?

Answer rating: 100% (QA)

PDNP Proved developed but Non Producing As the PV is higher than the cumulative cash flows i... View the full answer