SEC changes flexibility about discovery testing methods

Mostly because of the collapse of Enron, the Securities and Exchange Commission 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.

Since 1978, the SEC has officially required that discoveries not adjacent to producing fields undergo a "flow test" before being classified as proven reserves. But this method takes a lot of time and may cost some $ 10 mm and $ 30 mm. So companies have developed other methods of evaluating reserves.
In the past, the SEC has been flexible about the new testing methods but now the SEC asks for explanation from the companies concerning how they have in the past evaluated their proven oil and gas reserves before submitting them to the SEC.