How do you value oil reserves?

Valuing oil reserves involves estimating the quantity of recoverable oil and multiplying it by the expected price per barrel, adjusted for market conditions and future price forecasts. Factors such as extraction costs, operational expenses, and potential regulatory impacts also play a critical role in determining value. Additionally, the reserves' geographical location and the technology required for extraction can influence the valuation. Financial models, including discounted cash flow analysis, are often used to assess the present value of future cash flows generated by the reserves.