What is RLI, and how does Daylight compare to other energy income trusts when it comes to RLI?
RLI stands for Reserve Life Index. RLI is a benchmarking tool for comparative purposes among trusts and conventional oil and natural gas producers. A trust’s RLI is calculated by dividing its total reserves as at a particular date by its total production over the previous year, or its forecast production for the coming year, resulting in a numerical figure in years. This gives unitholders, financial analysts and trust managers a snapshot view of the longevity of the trust’s reserves base. The actual productive or economic life of a trust’s reserves base is almost always longer than its RLI, because no reservoir produces at the exact same rate until its complete depletion. Instead, production follows a “decline curve.” In simple terms, a field with an RLI of 10 years and producing, say, 10,000 boe per day in its first year might produce 9,000 boe per day in its second year, 8,100 boe per day in its third year, and so on. Given this decline curve, this 10-year RLI pool might produce for
