Estimated Ultimate Recovery (EUR) is a key tool used by oil companies and investors in the evaluation of potential oil exploration and drilling projects, as well as in gauging the potential profits of a project. It is calculated as the cumulative amount of product expected to be extracted from a well or a deposit over its lifetime. This expected recovery must include the amount of recoverable product already identified (claimed reserves), those amounts that are deemed to exist but are not easily accessible or quantifiable (probable reserves), and those reserves yet to be found (possible reserves).

EUR calculations require a highly accurate assessment of uncertainty based on a consideration of the geology, geophysics and other engineering and scientific data available. Such data enables engineers to make accurate estimates of how many barrels of oil or m^3 of gas from a given area are technically and economically recoverable. By combining these data points with production and sales figures, EUR can then be determined.

The Netherlands Petroleum Institute (NPI), a not-for-profit organization dedicated to oil and gas research, states that EUR should contain the following three levels of reserves: proven reserves, probable reserves, and possible reserves. Proven reserves refer to the volumes that have been been discovered and proven to be technically and economically recoverable within the specified time frame, while probable reserves are those that have a significant chance of being recovered. Possible reserves have less likelihood of being recovered, as they may require additional technological advances or new processes to bring them to the market.

The accuracy of EUR estimates is critical in determining the viability of an oil project and its profitability. Oil companies and other investors use the EUR to assess the NPV (net present value) of a project, and make decisions about whether to pursue or divest from an investment. For instance, an oil company may choose to invest in the development of a certain field if it yields a positive NPV projection. EUR is also used to compare potential investments with similar risk profiles and production capabilities, which helps companies determine where exactly to allocate resources and capital.

Overall, a EUR is a vital asset in the oil and gas industry, helping companies and investors make the most profitable and least risky investments. It requires thorough geoscientific and financial analysis and requires constant updating to ensure its accuracy. The EUR provides key information for making sound investment decisions and should be used in conjunction with other data such as production and sales forecasts.