PUD (Proved Undeveloped)
Reserves expected from wells not yet drilled but with strong evidence they'll produce. Real value, but it depends on future drilling.
PUD stands for proved undeveloped — reserves from locations not yet drilled but supported by enough nearby data to be booked as proved. The geology and offset wells say the oil and gas is there; the well just has not been drilled. Realizing PUD value depends on an operator actually committing the capital to drill it.
PUD carries more risk than PDP because it hinges on future events. Commodity prices, the operator's drilling schedule, and permits all have to line up. A spot inside a strong development program in the Delaware Basin is more bankable than an isolated location with no rig in sight.
When PUD acreage is involved, discount it for timing and the chance it never gets drilled. Check recent permit activity around the tract before you assign it much value.