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In the energy and mining industries, accurate reporting of reserves and resources is essential for investment decisions, regulatory compliance and stakeholder confidence. A Competent Persons Report plays a critical role in providing independent, professional assurance on the estimation and classification of reserves and resources. These reports are widely used in transactions, stock exchange listings and strategic asset evaluations.
What Is a Competent Persons Report?
A Competent Persons Report, often referred to as a CPR, is an independent technical assessment prepared by a qualified and experienced professional known as a Competent Person. The report evaluates the quantity, quality and commercial viability of reserves and resources based on recognised industry standards and classification systems.
In the oil and gas sector, Competent Persons Reports are commonly prepared in accordance with frameworks such as PRMS, while mining projects typically follow recognised codes such as JORC. The purpose of the report is to provide transparent, reliable and unbiased information to investors and decision makers.
The Role of a Competent Person
A Competent Person is an individual with relevant technical expertise, professional accreditation and sufficient experience in the type of asset being assessed. Their responsibility is to apply sound engineering and geological judgement, ensuring that reserves and resources estimates are realistic and supported by data.
Independence and professional integrity are fundamental, as the credibility of a Competent Persons Report depends on objective analysis and adherence to reporting standards.
Reserves and Resources Classification
Reserves and resources represent different levels of certainty and commercial maturity. A Competent Persons Report clearly distinguishes between these categories, providing clarity on risk and development status.
Resources represent concentrations of hydrocarbons or minerals with reasonable prospects for eventual economic extraction. Reserves are the commercially recoverable portion of these resources, supported by development plans, technical feasibility and economic justification.
Accurate classification within a Competent Persons Report is critical for valuation, financing and regulatory disclosure.
Key Components of a Competent Persons Report
Geological and Technical Evaluation
The report includes a detailed assessment of subsurface data, reservoir or ore body characteristics, production history and recovery mechanisms. This technical foundation underpins all reserves and resources estimates.
Development and Production Forecasts
Competent Persons Reports evaluate development plans, production profiles and recovery factors. Assumptions are clearly documented to allow readers to understand the basis of the estimates.
Economic and Commercial Assumptions
While primarily technical, the report considers economic parameters such as pricing, costs and fiscal terms that influence commercial viability. These assumptions must be reasonable and consistent with market conditions.
Risks and Uncertainties
They highlight technical, operational and commercial risks that may impact reserves and resources. This transparency supports informed decision making and realistic expectations.
Uses of Competent Persons Reports
Competent Persons Reports are commonly used in mergers and acquisitions, asset divestments, project financing and public market disclosures. They provide assurance to investors, lenders and regulators that reserves and resources have been assessed using recognised methodologies and professional judgement.
In transactions, a Competent Persons Report often forms the technical foundation for valuation and due diligence processes.
Importance of Independent Reporting
Independence is a defining feature of a Competent Persons Report. Independent assessment reduces bias, increases credibility and enhances trust among stakeholders. This is particularly important where reserves and resources form a significant part of a company’s value.
It is a vital instrument for transparent and credible reporting of reserves and resources. By providing an independent, professionally prepared assessment, it supports investment confidence, regulatory compliance and informed strategic decisions.
In industries where asset value is closely linked to subsurface potential, these reports remain essential to ensuring clarity, consistency and trust in reserves and resources reporting.
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