Reservoir: The Changing Landscape of SEC Reserve Reporting
Disclosure requirements relating to oil and gas reserves were first introduced by the SEC pursuant to a directive in the Energy Policy and Conservation Act of 1975 to “take such steps as may be necessary to assure the development and observance of accounting practices by person engaged, in whole or in part, in the production of crude oil and natural gas in the United States”. In the three decades since adopting SEC Regulations S-X (1978) and S-K (1982), the SEC has issued certain Staff Accounting Bulletins dealing with matters relating to the application of these regulations, but the regulations relating to the reporting and disclosure requirements of proved oil and gas reserves have not been revised. On December 31, 2008, the Commission issued the “Modernization of Oil and Gas Reporting” as a final rule in SEC Release No. 33-8995 concluding a year long process of public comment on the proposed amendments to Regulations S-X and S-K. The changes, codified as amendments to the prior regulations, apply to companies that file a registration statement on or after January 1, 2010, and for annual reports on Forms 10-K and 20-F for fiscal years ending on or after December 31, 2009.
This presentation will address some of the major changes as well as the challenges to the application of the updated regulations for such topics as the prices used for disclosure and accounting purposes, the inclusion of certain nontraditional resources such as mined bitumen as part of a company’s oil and gas reserves, the application of “reasonable certainty” rather than “certainty” for the determination of proved undeveloped reserves, the use of new ‘reliable” technologies to establish reserves estimates and the optional disclosure of non-proven reserves.
Location:
Courtyard on St James
1885 St James Place
Houston
,
TX 77056