Since the release of its modernized reserves reporting rules in late 2008 (NARA, 2009), the U.S. Securities & Exchange Commission (SEC) has issued little formal guidance on proper interpretation of the modernized rules. The SEC staff issued major guidance in October, 2009, and guidance on a single issue in May, 2013. To supplement the new rules, the Financial Accounting Standards Board has issued revised accounting guidelines (FASB ASC, 2010), which extends some reporting requirements. In addition, we have observed some consistent patterns and clarifications in comment letters which the SEC has made public for filings covering the 2009, 2010, 2011, and 2012 fiscal years. Finally, there have also been a limited number of public presentations by SEC staff (e.g., in November 2009, April 2010, April 2011, August 2013 and June 2014), where SEC staff has provided some clarification on certain positions.
This paper summarizes the more important aspects of the SEC guidance and clarification provided to date, and includes a discussion of issues such as clarification of separate products whose reserves are required to be disclosed, situations in which exemptions to the "five-year rule" are either likely or not likely to be allowed, a refined definition of "project", requirements for third-party reports in conjunction with 10-K or 20-F filings with the commission, status of resources that meet all requirements for proved undeveloped reserves except that they cannot be developed within five years, undeveloped locations more than one offset from existing wells and speed of converting proved undeveloped reserves into developed reserves.
An overview of other key issues raised by the SEC during the last four years is also provided. Potential differences between the SEC regulations and the SPE-PRMS (PRMS, 2007) are described.