By OGJ editors
HOUSTON, June 13 -- US Securities and Exchange Commission staff members have recommended that the commission consider updating its oil and gas reserves reporting requirements, the commission reported in a June 12 news release.
The SEC commission has yet to consider and vote on the proposal. Current SEC reserves requirements were adopted more than 25 years ago. The recommended proposals would allow oil and gas companies to provide more information about their reserves to investors, the release said.
John White, director of the SEC's division of corporation finance, said that there are "tremendous changes in the way reserves are measured, and oil and gas companies do business" that are not yet reflected in reserves reporting rules.
Details of the staff recommendations were not provided in the news release. Late last year, the SEC solicited comment on whether changes in the reporting requirements were needed and appropriate.
The commission received 80 comment letters, generally supportive of updating the requirements.
The American Petroleum Institute said June 13 it intended to review the recommendations and then will comment if needed.
Large reserves writedowns by some oil and gas companies in 2004 rekindled debate about how companies estimate reserves, what regulators worldwide require of companies, and how investors use the information.
Adjustments are a normal part of reserves reporting but disclosure policies drew close attention after Royal Dutch Shell/Group reclassified its reserves estimates five times in a little over a year (OGJ, Feb. 21, 2005, p. 5).
Reserves estimates and reporting standards have been the subject of much industry discussion (OGJ, June 20, 2005, p. 20).