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| SEC Updates Reporting Requirements for Oil and Gas Companies
February 24, 2009
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| The SEC recently published its final rule release announcing significant revisions to its rules governing disclosures by oil and gas companies. The oil and gas disclosure requirements were initially adopted in 1978 and 1982, and industry participants had been urging the SEC to amend its rules to bring the requirements into alignment with current industry practices. The new rules reflect efforts to modernize disclosure, increase comparability between companies and streamline information into a more useful format for investors. Among the most significant changes to disclosure requirements are the following: (1) companies will be required to file as an exhibit short form reports summarizing the findings of any third parties used to prepare reserve estimates or audit reserves in their public filings; (2) in addition to disclosing proved reserves, companies will have the option of disclosing probable and possible reserves to investors; and (3) when calculating oil and gas reserves, companies will be required to use an average price based on the prior 12-month period instead of year-end prices, which often led to significant variations in reserves based on whether the price as of the year-end was higher or lower than the yearly average. Companies must comply with the new disclosure requirements for registration statements filed 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. Early compliance with the new requirements is not permitted. | ||||
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Additional Information
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