The United States Securities and Exchange Commission, on December 29 2008, adopted new rules for disclosing oil and gas reserves. The definitions contained within these rules are broadly consistent with the SPE Petroleum Resources Management System (PRMS); the definitions in the previous rules differed from PRMS in a number of specific instances. A notable difference in the new rules is inclusion of more unconventional resources as potential oil and gas reserves rather than as mining reserves. These new rules offer enhanced opportunities for investors to understand the potential values of oil and gas companies and for companies to access the capital markets in the United States more efficiently.
The opinions expressed in this paper are mine alone, and represent neither the opinions of the United States Securities and Exchange Commission nor of its staff members.
On December 29, 2008 the United States Securities and Exchange Commission (SEC) adopted modernized rules for reporting oil and gas reserves in filings with the Commission. The Commission posted the full text of these rules and commentary on its web site (Modernization of the Oil and Gas Reporting Requirements. 2008–2). The new rules will be in effect for documents filed with the SEC for fiscal years ending on or after December 31, 2009.
These new rules are the culmination of an effort by the SEC to review the oil and gas reporting requirements announced publicly in May 2007 when the Commission published a notice that it intended to appoint an "Academic Engineering Fellow" to examine reserves reporting requirements - an appointment for which I was chosen. Following an effort that began with my arrival at the SEC in October 2007, the Commission issued a "Concept Release" in December 2007 (Concept Release on Possible Revisions to the Disclosure Requirements Relating To Oil and Gas Reserves. 2007) in which it asked for public comments on the need for revisions of the oil and gas reporting requirements and suggestions for what revisions, if any, should include. Eighty comments from the public were received through February 2008. The Commission staff studied these comments, and, in June 2008, issued proposed rules that would modernize oil and gas reserves definitions and reporting requirements (Modernization of the Oil and Gas Reporting Requirements. 2008–1). Sixty-eight comments from the public were received through September 2008, and analysis of these comments led to the final rules adopted in December 2008.