SEC looks at modernising reporting rules

US authorities look to changing rules on reporting oil and gas reserves to reflect modernisation changes in the industry
Written by Barbara Buchanan
Accountancy Age, 13 Jun 2008
Oil and natural gas companies may have to change how they disclose their reserves for the first time in more than 25 years under proposals being examined by US regulators.
The Securities and Exchange Commission has drawn up recommendations for ‘updating and modernising’ the financial reporting requirements reflecting the significant changes in the industry, including improved technology.
‘In the decades since adoption of the current requirements, there have been tremendous changes in the way reserves are measured and oil and gas companies do business, which are not yet reflected in our rules,’ said John White, SEC’s corporation finance director.
The recommended proposals would allow oil and gas companies to provide investors with additional information about their oil and gas reserves. Unconventional resources such as oil sands have become more important with investors focusing on other measures of a companies performance.
The SEC staff’s recommendations were preceded by a concept release issued last December, soliciting comment on changing reporting requirements. These included whether the definition of reserves should be revised and whether third-party verification of reserves should be received.
About 80 comment letters were received supporting updating reporting requirement to reflect changes in the industry.