Proved developed reserves are the portion of an oil or natural gas field's reserves that can be extracted using existing infrastructure, technology, and operating methods. It encompasses the amount of oil or gas that can be produced with existing wells and facilities, making it a critical metric in the energy industry to determine the commercial viability of a project.

Energy companies use proved developed reserves to assess the economic potential of an oil or gas field. Knowing the amount of recoverable oil or gas that can be extracted with existing infrastructure allows them to estimate the expected revenue, plan operations, and allocate resources required for the project's development. This estimate also has a significant impact on the valuation of an energy company's assets, particularly when based on the current market pricing.

Furthermore, proved developed reserves have regulatory implications as they are used to determine whether energy companies comply with the production quotas set by governmental agencies. Many nations require oil and gas companies to report on the amount of proved developed reserves in their annual financial reports to ensure transparency regarding the country's natural resources.

Overall, proved developed reserves are a crucial metric in the energy industry, providing vital information for investors, regulators, and analysts to evaluate the financial and operational health of an energy company.