Occidental Petroleum 2014 Annual Report Download - page 134

Occidental Petroleum Corporation
January 30, 2015
Page 2
Reviewed by Ryder Scott
SEC Parameters
Occidental Petroleum Corporation
As of December 31, 2014
Oil/Condensate NGL
Total Liquid
Hydrocarbons Gas
Equivalent
MMBOE
Total Proved Developed 20% 31% 22% 25% 23%
Total Proved Undeveloped 20% 43% 24% 37% 27%
Total Company Proved 20% 35% 23% 28% 24%
The net liquid hydrocarbons reviewed are comprised of oil, condensate and natural gas liquids (NGL) and are based on
standard 42 gallon barrels. All net gas volumes reviewed are based on an “as sold” basis expressed in millions of cubic feet
(MMCF) at the official temperature and pressure bases of the areas in which the gas reserves are located. Reserves reviewed and
noted herein on a BOE basis are based on converting natural gas on the basis of relative energy content using a factor of 6,000
cubic feet of natural gas per one BOE. It should be noted that barrel of oil equivalence does not necessarily result in price
equivalence as the equivalent price of natural gas on a BOE basis is, and has been substantially lower than the corresponding
price for crude oil currently and for a number of years.
Reserves Process Review Discussion
A process review, according to Paragraph 2.2(h) contained in the Society of Petroleum Engineers (SPE) Standards
Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (SPE auditing standards), is “the result of an
investigation by a person who is qualified by experience and training equivalent to that of a Reserves Auditor to address the
adequacy and effectiveness of an entity’s internal processes and controls relative to reserves estimation.”
In order to arrive at our conclusions and to substantiate our opinion relative to Occidental’s internal reserves estimation
process and controls, we conducted our investigation in a manner that closely conforms to the SPE auditing standards for a
reserves audit. Under Paragraph 2.2(f) of the SPE auditing standards, a reserves audit includes “the process of reviewing certain
of the pertinent facts interpreted and assumptions made that have resulted in an estimate of reserves and/or Reserves Information
prepared by others and the rendering of an opinion about (1) the appropriateness of the methodologies employed, (2) the adequacy
and quality of the data relied upon, (3) the depth and thoroughness of the reserves estimation process, [and] (4) the classification of
reserves appropriate to the relevant definitions used.”
Our process review, however, differs from an SPE reserves audit in that we have not conducted our investigation with
sufficient rigor to express an opinion as to “the reasonableness of the estimated reserve quantities and/or the Reserves
Information” as required under item (5) Paragraph 2.2(f) of the SPE auditing standards for a reserves audit. Our review should not
be construed to be a complete and comprehensive appraisal of the subject properties or deemed to convey the same level of
information contained in a third party reserves audit or reserves evaluation report.
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