CPG Professional Standards & Competencies 5

Question 1

A CPG is retained by an investment bank for due diligence on an acquisition. What is the appropriate scope of work documentation?

Accepted Answer

A written engagement letter defining scope, limitations, and intended use

Answer

A written engagement letter is required to define the scope, limitations, data sources, and intended use of any professional evaluation.

Question 2

Under CPG standards, 'economic producibility' for proved reserves requires that production must be profitable:

Accepted Answer

Under existing economic conditions at the effective date of the estimate

Answer

Proved reserves must be economically producible under existing economic conditions as of the effective date, not based on forecasted future conditions.

Question 3

A CPG discovers that a report she co-signed contains a material error made by her co-author. What is her professional responsibility?

Accepted Answer

She shares responsibility and must work to correct and reissue the report

Answer

Co-signers share professional responsibility for the entire report; material errors must be corrected and the report reissued with notification to appropriate parties.

Question 4

What does the concept of 'continuous professional development' require of active CPG holders?

Accepted Answer

Completing required continuing education to maintain current knowledge

Answer

CPG holders must complete continuing education requirements to stay current with evolving technical standards, methods, and regulations.

Question 5

Which of the following scenarios most clearly violates the principle of professional independence for a CPG reserves evaluator?

Accepted Answer

The CPG's fee is contingent on the reserve estimate reaching a minimum threshold

Answer

Contingent fees that depend on the outcome of the evaluation create an impermissible financial incentive that undermines professional independence.

(CPG) Certified Petroleum Geologist Practice Test

(CPG) Certified Petroleum Geologist Practice Test

CPG Professional Standards & Competencies 5