Hidden in today's wild 'n crazy market action was this little nugget from the SEC re: calculation of proven/probable reserves for oil/gas companies:
bloomberg.com
SEC Issues New Rules on Oil, Gas Reserves Reporting (Update2)
By Tina Seeley
June 26 (Bloomberg) -- The U.S. Securities and Exchange Commission proposed new rules to govern how oil and natural gas companies report reserves to investors.
``The current oil and gas disclosure rules often interfere with an investor's analysis because they are tied to outdated technologies,'' Commission Chairman Christopher Cox said today in an e-mailed statement.
The new rules permit companies to disclose ``probable and possible'' reserves to investors, and include resources such as oil sands that were previously classified as mining reserves.
Exxon Mobil Corp., the world's biggest oil company, is among those urging the SEC to update reporting rules as reserve levels fall amid rising consumption. The rules were last revised in 1982, when global oil consumption was two- thirds what it is now and crude was trading at $28 a barrel.
U.S. oil futures rose to a record $140.39 a barrel today on the New York Mercantile Exchange.
Dwindling Reserves
One potential sticking point could be a requirement that a company relying on third-party reserve estimates must file a report related to the process, said Mike Wysatta, business development manager for Houston-based reservoir consultants Ryder Scott.
``Our reports contain information that we and our clients treat as confidential, such as petroleum reserves quantities by field,'' and further clarification of the proposal is needed, Wysatta said in an e-mail.
Exxon Mobil failed to replace 24 percent of the oil and gas it pumped in 2007, the worst performance in three years, after Venezuela seized an oil field and contracts with oil- rich nations forced the Irving, Texas-based company to take some reserves off its books.
Chevron Corp., the second-largest U.S. oil company, failed to replace 89 percent of its output last year, the worst performance since at least 1998. Chevron, based in San Ramon, California, cited production-sharing contracts with nations such as Angola and Indonesia that cede bigger stakes to host nations when prices rise.
Karen Matusic, spokeswoman for the American Petroleum Institute, said the industry hasn't ``seen the full text'' of the commission's proposal yet. ``It's not clear to us what's actually going to be in there,'' she said in a telephone interview.
The proposed rule will be available for public comment for 60 days after it is published in the Federal Register.
To contact the reporter on this story: Tina Seeley in Washington at tseeley@bloomberg.net.
Would be bullish for oil sands, provided the US decides they want any part of them in the future....... |
