What is one key ratio you would look at for upstream companies ? (reserve replacement ratio for oil & gas)

Question

Accepted Answer

The reserve replacement ratio is a key ratio to evaluate the ability of upstream companies to replace the reserves they produce.

The reserve replacement ratio compares the amount of reserves added to the amount of reserves produced in a given period.
A ratio above 100% indicates that the company is replacing more reserves than it is producing.
A ratio below 100% indicates that the company is producing more reserves than it is replacing.
The reserve replacement ratio is important to ensure the long-term sustainability of the company's operations.
For example, if a company has a reserve replacement ratio of 150%, it means that it has added 1.5 barrels of oil for every barrel produced.

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