Reserve life index, or RLI, compares an oil and gas producer's reserves with its production rate.
A common form is:
reserve life index = proved reserves ÷ annual production
The result is expressed in years.
Range Resources defines reserve life index as proved reserves at a point in time divided by the then-current production rate.
A simple example
Suppose a producer has 1.0 billion BOE of proved reserves and produces 100 million BOE per year.
Its simplified reserve life index is:
1.0 billion BOE ÷ 100 million BOE per year = 10 years
That does not mean production will remain flat for exactly 10 years.
Why reserve life matters
RLI helps investors connect a balance-sheet-like reserve estimate with the company's current extraction pace.
A very short reserve life may imply greater dependence on:
- successful drilling;
- reserve additions;
- acquisitions; or
- faster redevelopment.
A longer reserve life can provide more inventory depth, but it is not automatically better if the reserves require weak-return development spending.
The production-rate convention matters
Companies may calculate RLI using full-year production, fourth-quarter production annualized, or another stated production rate.
That can materially change the result.
Gran Tierra, for example, disclosed reserve-life indexes based on its fourth-quarter 2025 average production rate.
Investors should therefore compare definitions before comparing companies.
RLI is not reserve replacement
Reserve Replacement Ratio asks whether new reserves replaced production over a period.
Reserve life index asks how large the reserve base is relative to the current production pace at a point in time.
A producer can have a long reserve life but poor recent reserve replacement, or a shorter reserve life while consistently adding reserves.
Primary-source examples
Reserve life is most useful as a bridge between reserve depth and production pace, not as a stand-alone measure of asset quality.
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