BP 2015 Annual Report Download - page 195

Standardized measure of discounted future net cash flows and changes therein relating to proved oil and gas reserves
The following tables set out the standardized measure of discounted future net cash flows, and changes therein, relating to crude oil and natural gas
production from the group’s estimated proved reserves. This information is prepared in compliance with FASB Oil and Gas Disclosures requirements.
Future net cash flows have been prepared on the basis of certain assumptions which may or may not be realized. These include the timing of future
production, the estimation of crude oil and natural gas reserves and the application of average crude oil and natural gas prices and exchange rates from
the previous 12 months. Furthermore, both proved reserves estimates and production forecasts are subject to revision as further technical information
becomes available and economic conditions change. BP cautions against relying on the information presented because of the highly arbitrary nature of
the assumptions on which it is based and its lack of comparability with the historical cost information presented in the financial statements.
$ million
2015
Europe North
America
South
America
Africa Asia Australasia Total
UK
Rest of
Europe US
Rest of
North
America Russia
Rest of
Asia
At 31 December
Subsidiaries
Future cash inflowsa27,500 7,800 98,100 7,200 20,100 32,800 – 65,200 32,000 290,700
Future production costb15,700 5,300 56,300 4,200 8,600 12,000 – 35,900 15,200 153,200
Future development costb4,700 700 18,800 1,700 7,000 8,100 – 18,200 4,500 63,700
Future taxationc2,900 800 3,100 – 1,700 3,300 – 3,800 4,000 19,600
Future net cash flows 4,200 1,000 19,900 1,300 2,800 9,400 – 7,300 8,300 54,200
10% annual discountd1,900 300 7,400 900 900 4,300 – 3,700 4,400 23,800
Standardized measure of discounted
future net cash flowse2,300 700 12,500 400 1,900 5,100 – 3,600 3,900 30,400
Equity-accounted entities (BP share)f
Future cash inflowsa– – – – 39,900 – 182,300 3,700 – 225,900
Future production costb– – – – 20,200 – 101,200 2,200 – 123,600
Future development costb– – – – 5,300 – 11,000 1,300 – 17,600
Future taxationc– – – – 3,900 – 12,400 100 – 16,400
Future net cash flows – – – – 10,500 – 57,700 100 – 68,300
10% annual discountd– – – – 6,700 – 33,800 – – 40,500
Standardized measure of discounted
future net cash flowsgh – – – – 3,800 – 23,900 100 – 27,800
Total subsidiaries and equity-accounted entities
Standardized measure of discounted
future net cash flows 2,300 700 12,500 400 5,700 5,100 23,900 3,700 3,900 58,200
The following are the principal sources of change in the standardized measure of discounted future net cash flows:
$ million
Subsidiaries
Equity-accounted
entities (BP share)
Total subsidiaries and
equity-accounted
entities
Sales and transfers of oil and gas produced, net of production costs (27,900) (7,300) (35,200)
Development costs for the current year as estimated in previous year 15,000 4,500 19,500
Extensions, discoveries and improved recovery, less related costs 600 700 1,300
Net changes in prices and production cost (100,400) (24,700) (125,100)
Revisions of previous reserves estimates 13,500 500 14,000
Net change in taxation 38,600 2,300 40,900
Future development costs 3,200 (100) 3,100
Net change in purchase and sales of reserves-in-place (700) 300 (400)
Addition of 10% annual discount 8,000 4,700 12,700
Total change in the standardized measure during the yeari(50,100) (19,100) (69,200)
aThe marker prices used were Brent $54.17/bbl, Henry Hub $2.59/mmBtu.
bProduction costs, which include production taxes, and development costs relating to future production of proved reserves are based on the continuation of existing economic conditions. Future
decommissioning costs are included.
cTaxation is computed using appropriate year-end statutory corporate income tax rates.
dFuture net cash flows from oil and natural gas production are discounted at 10% regardless of the group assessment of the risk associated with its producing activities.
eNon-controlling interests in BP Trinidad and Tobago LLC amounted to $600 million.
fThe standardized measure of discounted future net cash flows of equity-accounted entities includes standardized measure of discounted future net cash flows of equity-accounted investments of
those entities.
gNon-controlling interests in Rosneft amounted to $93 million in Russia.
hNo equity-accounted future cash flows in Africa because proved reserves are received as a result of contractual arrangements, with no associated costs.
iTotal change in the standardized measure during the year includes the effect of exchange rate movements. Exchange rate effects arising from the translation of our share of Rosneft to US dollars are
included within ‘Net changes in prices and production cost’.
Financial statements
BP Annual Report and Form 20-F 2015 191