Letters: The reserves balloon

The unwritten rule guiding leaders of publicly traded E&P companies is that reserves added must exceed reserves depleted during the fiscal year. Wall Street demands it. The problem is that exploration is risky and therefore unpredictable, so lean years crop up among the good ones.But since the golden rule must be honored, ways must be found to put the annual reserves balance sheet in the black. This can be done by buying reserves and/or by making upward revisions to reserves booked previously. If there's still a deficit, the only recourse is to go back and tweak the numbers. There's no implication of dishonesty here, for as pointed out (OGJ, June 7, 2004, p. 17) moving hyrdrocarbo...

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