I work in oil & has appraisal. So here is generally how things work. Reserve is a very loose term and generally break down into three categories: Proven, probable, and possible. Now within those three categories there are other criteria like a producing proven reserve or a non-producing proven reserve.

Generally if a company is talking about reserves it's based on speculation, but more times than not they are correct. The issue than becomes if it's feasible to drill. I usually deal with appraisal for FLP's that hold land that is now being used for producing oil. This would usually be fracking cases in Pennsylvania and Texas.

Now in terms of valuation, everything is driven off the price of oil and there is very little wiggle room in that price to make things feasible. So once oil drops below a certain price, it makes the whole operation impossible.

I only bring this up because this can be misleading, usually a company like anadarko or apache will come into an area. They typically pay a lease bonus to a landowner per acre that is a lump sum for a time period and a royalty percentage, so lets say a bonus of $3000 per acre they have 200 acres so the land owner will get a lump sum of $600,000 for the lease with the expectation that an oil company will drill a well in the next 3-5 years typically and then from any oil drilled the landowner gets a 13%-18% monthly royalty payment. If they don't drill within a certain time frame the lease expires and the landowner can shop his land around again. That is important because a lot of proven reserves are of this kind, where a landowner has leased the land but because the price of oil is low no one is drilling on the land. It's important that the oil company drills because one they do drill, that land can no longer be leased in the future and it essentially belongs to the oil company.

I guess the reason I took the time to write this is because if you don't know a lot about oil & gas the terms along can get very confusing. The best thing to do with oil and gas producers is to go to their website and look at presentations the company puts together. This information is usually put together by geologists who have intimate knowledge of the area or property in question. I guess I got really off topic but to answer your question, it depends usually they are talking about what is still left in the ground to drill because their value is based of a future expectation that they will drill this oil within a certain amount of time. With oil and gas there are so many factors at play and a lot of political red tape so be really careful with these guys. Just my 2 Cents.