2P Reserves

Imagine being asked to estimate how much water is in a lake you cannot fully see the bottom of. You could give a conservative estimate you are almost certain is correct, or a more generous estimate that includes water you reasonably believe is there but have not directly measured. 2P Reserves is the industry's standard way of combining both estimates into one number.

2P stands for Proved plus Probable, combining the most certain reserve estimate, Proved reserves, which have a very high confidence of being recoverable, with an additional Probable component that is more likely than not to be recovered but carries somewhat more geological uncertainty. It sits between the conservative 1P, Proved only, figure and the more optimistic 3P figure that also includes Possible reserves.

When an exploration company reports its 2P reserves, that number is effectively the industry's balanced, reasonably confident estimate of how much oil or gas a field can actually deliver, and it is the figure most commonly used in valuing an upstream asset or company.