US changes financial reporting rules for oil companies
The US Securities and Exchange Commission has "modernized" its oil and gas company reporting requirements ostensibly
"to help investors evaluate the value of their investments in these companies".
"In the more than a quarter century since the SEC last reviewed its rules in this area, there have been significant
changes in technology that have increasingly limited the usefulness of current disclosures to the market and
investors," said SEC Chairman Christopher Cox.
"These updates to the SEC rules will help ensure more meaningful and comprehensive disclosure of information that,
even though it does not appear on a company's balance sheet, is of significance to investors in making informed
investment decisions."
The new disclosure requirements approved by the Commission include provisions that permit the use of new technologies
to determine proved reserves if "demonstrated empirically to lead to reliable conclusions about reserves".
New requirements will allow companies to disclose theirprobable and possible reserves to investors. Currently, the
Commission's rules limit disclosure to only proved reserves.
Although details are not out, the new disclosure requirements will align with those already in place for the United
Kingdom, with reporting on the independence and qualifications of auditors. An average one-year price must now be
used when reporting values.
