On Groundhog Day (Feb. 2), Punxsutawney Phil awoke to bright sunshine, saw his shadow and forecast six more weeks of winter. Living in Oklahoma where we have been experiencing mild weather (and early tornadoes), I am not sure whether I believe Phil’s forecast.

So what is the relevance to exploration, drilling and production technology–not to mention this column? With last year’s dramatic decreases in oil and gas prices, reserve write-down headlines appear almost daily. If reserves are a “forecast,” and one is living in uncertain times with changed rules, what does he need to know to manage this key side of the business? An early February workshop by PTTC’s Midcontinent Region, titled “Oil & Gas Reserve Determination and Petroleum Financing in Uncertain Times,” held in Wichita, Ks., couldn’t have been better timed. Industry agreed and attendance was strong.

Definitions are integral to any reserves workshop, and Gordon Romine with Lee Keeling & Associates did an admirable job of succinctly stating those and summarizing key changes in the new rules promulgated by the Securities and Exchange Commission. Naturally, there was discussion of key points in decline curve analysis, a common technique used for estimating reserves.

Attendees also learned about the SPE/WPC/AAPG/SPEE Petroleum Resources Management System (SPE-PRMS). SPEPRMS puts forth concepts accepted worldwide to calculate reserves. Companies are encouraged to study SPE-PRMS and decide what approaches should be incorporated in their reserve determination processes.

The Society of Petroleum Engineers scheduled a petroleum reserves estimation workshop for March 10-12 in Rio de Janeiro, which was to feature the Joint Committee on Reserves Evaluator Training-endorsed short course. JCORET includes participants from the American Association of Petroleum Geologists, SPE, World Petroleum Council and the Society of Petroleum Evaluation Engineers. Checking SPE’s event schedule (www.spe.org/spe-app/spe/events/index/htm didn’t see plans for hosting this workshop domestically, but surely it will be at some future date.

Many operators employ hedging–which impacts reserves–as a tool for managing price risk/volatility. With the recent volatility, it just may be a tool that allows a company to survive (or if done wrong, go down the tube). Darrel Palmer with Energy Management Resources in Missouri described hedging basics and principles. By locking in prices, hedging can improve cash flow management, increase bank borrowing power, improve predictability of earnings, improve project development/profitability, bring shareholder value, and not insignificantly, take away some “sleepless nights.” But there is a price, and one may leave some dollars on the table. Hedging requires a well designed strategy that takes time and effort to implement. Hedges can be either physical or financial, which are more complex, but can provide more flexibility.

Three upcoming PTTC workshop titles target issues relevant to today’s environment. Readers are encouraged to try to work them into their schedules:

• How To Start/Fix/Manage a Small Waterflood, March 24, Farmers Branch, Tx.;

• Bypassed Pays and Plays–Lessons Learned from Missed Opportunities, April 8, Golden, Co., and April 9, Billings, Mt.; and

• What Is Your Bottom Line? April TBD, Midland, Tx.

Looking to tomorrow, evolving technologies will continue to be part of the solution. Individuals, entrepreneurs, companies large and small, and the federal government will all have a role. The Research Partnership to Secure Energy for America coordinates a significant federal research and development effort. To gain insight regarding needs, each year RPSEA conducts forums. Its spring-summer 2009 schedule includes:

• Mid-Continent Small Producer Forum, April 23, Wichita, Ks.;•

• Corrosion Forum, April 28, Houston;

• Coalbed and Shale Gas Forum, May 20, Tuscaloosa, Al.;

• Canadian Rockies Forum, TBD, Idaho;

• Unconventional Gas Forum, June, Chicago; and

• Geothermal Energy Utilization Associated with Oil and Gas Development Forum, June, Dallas.