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Shubham Garg: Small-Cap E&Ps & Launching White Tundra Petroleum

Value Hive Podcast

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How Much Does It Cost to Replace Reserves?

Is there anywhere in the financial statements where management will say like, hey, this is how much it's going to cost us to replace these reserves at our given decline rate? Yes. Reserves in my opinion are almost always understated. Some companies have really good fields that they don't need to spend that much capital to make up for that decline rate. And then as far as what do they spend on making up for the reserves? Basically, we want to look at the F&D cost of each barrel that they're adding to reserves and then also the recycle ratio.

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