Depletion is a natural phenomenon that characterizes the development of all non-renewable resources and oil in particular. Depletion is a progressive reduction of the overall stock of a resource as the resource is produced. Typically, production from a given well increases to a peak and then declines over time until some economic limit is reached and the well is shut in. Estimates of oil resources by field are made by geologists and engineers, but the estimates are a “best guess” given the available data and are revised as more knowledge becomes available. There is no time frame or probability associated with estimates of total resources in place. Similarly, proved reserves of crude oil are the estimated quantities that, on a particular date, are demonstrated with reasonable certainty to be recoverable in the future from known reservoirs under existing economic and operating conditions. There is at least a 90 percent probability that the estimated volume of proved reserves in the reservoir can be recovered under existing economic and operating conditions. Each year, production is taken from proved reserves, reducing both proved reserves and the total resource. Innovative production techniques have reduced net depletion rates at the well and field levels. Advanced exploration and drilling techniques have reduced the cost of finding new pools, reduced the risk of dry holes and allowed new pools to be developed and produced more quickly. Lower exploration, drilling, and dry hole costs increase the return on capital. More rapid production of resources from a field increases the return on capital because earnings are realized sooner in the project's life, and therefore, discounted less. Higher returns make some fields that are too expensive to develop under “normal” circumstances economically feasible, because reduced costs allow firms to make profits where they could not before. On the other hand, more rapid development and production of a field by definition increases the rate of depletion. If an operator produces a field more quickly, the rate of depletion must rise. While the rate of depletion increases with technological progress, the adverse effects of depletion are augmented but higher levels of production can be maintained for longer periods of time.