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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: goldsheet who wrote (93145)	2/2/2003 10:03:40 PM
From: long-gone	Read Replies (3) \| Respond to of 116774

There is still a cost to buying bullion.

To: goldsheet who wrote (93145)	2/3/2003 8:19:19 AM
From: lorne	Read Replies (1) \| Respond to of 116774

Morning Bob. You think this could happen in the gold market? SEC probes oil companies over reserves By Carola Hoyos, Energy Correspondent Published: February 2 2003 21:55 \| Last Updated: February 2 2003 21:55 The Securities and Exchange Commission is probing the way oil companies calculate their reserves, which the industry believes could force some companies to reduce the assets recorded in their accounts. Fearing a crackdown by the chief US financial regulator, many companies are currently reassessing the way they account for their reserves as they prepare their latest filings to the commission. Company executives are concerned that under the increased scrutiny following the collapse of Enron, the SEC may find that some companies have used unacceptable methods to calculate their reserves and could order them to wipe millions of dollars of assets from their books. The move, which would affect all companies whose shares are traded in the US, is mainly focused on those operating in the Gulf of Mexico. Analysts say companies are under increasing pressure to overbook reserves to boost their stock market values and increase the asset base against which they can borrow. Gerald Kepes, managing director of Washington-based consultants PFC Energy, said some independent oil companies could have particular cause for concern at the SEC move. "There may be a case or two where someone has really pushed it," he said. Since 1978, the SEC has officially required that discoveries not adjacent to producing fields undergo a "flow test" before being classified as proven res- erves. But the tests can take up to a year at a cost of between $10m and $30m. So companies have developed other methods of evaluating reserves, through a combination of seismic tests and the collection of core samples, which usually take a matter of days and cost tens of thousands of dollars. In the past, the SEC has been flexible about the new testing methods. But in a letter to the companies, the SEC asked them to explain how they have in the past evaluated their proven oil and gas reserves before submitting them to the SEC. Ronald Harrell, chairman of Ryder Scott, a company that evaluates companies' reserves accounting, sees the letter as "a good faith attempt" by the SEC to update testing rules. But many company executives see the letter as a sign that the SEC intends to crack down. One analyst said the letter was being interpreted as saying: "You've booked all these reserves and broken our rules." Even if the SEC ultimately decides to loosen its testing regulations, it has signalled that companies that have pushed the limits, using tests the SEC deems inappropriate, could be forced to reverse some of their finds, the analyst said. news.ft.com