A Brent price you can put in a report, with a name behind it.
SIGNED
Klaas Kostro, Dipl.-Ing.
Reservoir Engineer (Lagerstätteningenieur) — for Reservoir GmbH
EXHIBIT 0 · THE QUESTION
“Where does this number come from, and who stands behind it?”
The Brent price
Three numbers, twelve months ahead.
EXHIBIT 1.1 · CURRENT CASE
The chart appears once a signed case is in the archive.
Reference price: the monthly mean of daily Brent spot settlements as published by FRED (series DCOILBRENTEU).
The problem
Every report needs an oil price. Nobody defends it.
Every reserves report, development plan and loan needs an oil price.
Your volumes come with a range. Your recovery comes with a range. The price is usually one number, taken from somewhere, defended by no one.
That is the question an auditor, a lender or an acquirer asks, sooner or later.
Reference Case is an answer to that question.
EXHIBIT 2.1 · THE GAP
| Volumes | low / mid / high |
| Recovery | low / mid / high |
| Price | one number |
What you get
Four signed cases a year, each with a name on it.
EXHIBIT 3.1 · EVERY QUARTER
A signed opinion.
Low, middle and high Brent price for twelve months ahead. Dated. Signed by a named engineer.
EXHIBIT 3.2 · IN WRITING
The reasoning.
For subscribers, the signed report explains which factors drove the number, how much each one counted, and what could move it. The inputs behind every quarterly case are published, so anyone can rebuild the number.
EXHIBIT 3.3 · BY AGREEMENT
A name you can cite.
Subscribers can obtain a reliance letter under their agreement.
EXHIBIT 3.4 · IN PUBLIC
A public record.
Every quarterly case ever issued stays online. Twelve months later the real price is compared with our range, and the result is published, good or bad. Nothing is edited afterwards.
What it is not
Not a better forecast. Not a recommendation.
EXHIBIT 4.1 · NOT A BETTER FORECAST
It is not a better forecast.
Our own record shows the model does not beat the simplest alternative: assuming the price stays where it is. We say so on this page, not in a footnote.
EXHIBIT 4.2 · NOT A RECOMMENDATION
It is not a recommendation.
It names no instrument and recommends no action. It is an opinion on a physical commodity price, for people who have to plan and report with it.
So why pay for it? A forecast on its own is worth little. What a subscriber gets is a number with its reasoning written down and a named engineer's signature on it.
How it works
The machine never speaks in his name.
STEP 1 · ONCE A QUARTER
The model runs on frozen data. The engineer reviews every figure, writes what changed and what could go wrong, and signs. The machine never speaks in his name.
STEP 2 · ON THE DAY
The quarterly case goes online: the three numbers, the chart, and the exact inputs it was built from.
STEP 3 · TWELVE MONTHS LATER
The real price is checked against the range. The quarterly case is marked inside or outside, and the score joins the record.
Reference price: the monthly mean of daily Brent spot settlements as published by FRED (series DCOILBRENTEU).
The record, honestly
We publish our own weaknesses. Here they are.
EXHIBIT 6.1 · THE RANGE
1 in 4
Our low-to-high band is built to miss the real price about one time in five. So far it misses a little more often than that, one time in four, and mostly because the price went higher than the band.
EXHIBIT 6.2 · WHAT WE FOUND
| Against “price stays flat” | No advantage over “price stays flat” has been shown. One month out, our forecast is about a third worse than that. From six months on, the two are level: too close to call. |
| The sample | We have about twelve years of history, which sounds like a lot. Because the forecasts overlap, it is worth roughly ten independent tests. Treat every statistic here with that in mind. |
| Live versus backfilled | Cases issued in real time and cases reconstructed from past data are always counted separately. A live quarterly case is scored twelve months after it is issued; until one has been scored, the record shows backfilled cases, clearly marked. |
Terms
At most eight subscribers.
EXHIBIT 7.1 · SUBSCRIPTION
| Per year | What is included | |
|---|---|---|
| Reference | €9,000 | Four signed quarterly cases. |
| Reference + on-call | €14,000 | Everything above, plus one transaction opinion a year, scoped in advance. |
At most eight subscribers. Reliance letters for third parties are priced per letter. No one-off cases. Terms of the subscription are set out in the agreement.
Who signs
Prepared and signed by one named engineer.
Every quarterly case is prepared and signed by Klaas Kostro, a reservoir engineer for 24 years: simulation at Schlumberger, then seven years inside operating companies on North Sea fields, and since 2010 an independent consultant on fields in the North Sea, Russia, Africa and North America.
His work is the work behind a reserves report: matching models to history, probabilistic forecasting, reserves reporting, and technical due diligence for around a dozen acquisitions and financings.
He signs because a price opinion is worth exactly what its author is willing to put on the record.
EXHIBIT 8.1 · SIGNATORY
Klaas Kostro, Dipl.-Ing.
Reservoir Engineer (Lagerstätteningenieur) — for Reservoir GmbH