Proven reserves refer to quantities of natural resources, such as oil or gas, that are confirmed to be recoverable under current economic and operating conditions. These reserves are based on geological and engineering data, ensuring that there is a high degree of certainty about their existence and the ability to extract them profitably. The classification of proven reserves is crucial for companies in the energy sector, as it helps them assess their resource base and plan for future production. Accurate reporting of proven reserves is also important for investors and regulators, as it provides insight into a company's potential for generating revenue.