Washington, D.C., June 12, 2008 — The Securities and Exchange Commission's Division of Corporation Finance and Office of the Chief Accountant announced today that they have prepared for the Commission's consideration recommendations for updating and modernizing the reporting requirements for oil and gas companies.
The Commission's reporting requirements concerning oil and gas reserves were adopted more than 25 years ago. The recommendations that the SEC staff are providing to the Commission reflect the significant changes in the oil and gas industry since adoption of the original reporting requirements, including improved technology and alternate resources. Among other things, the recommended proposals would allow oil and gas companies to provide investors with additional information about their oil and gas reserves.
The SEC staff's recommendations were preceded by a Concept Release issued by the Commission on Dec. 12, 2007, in which the Commission solicited comment on whether changes in the reporting requirements were needed and appropriate. The Commission received approximately 80 comment letters, which were generally supportive of updating the reporting requirements to reflect the changes that have taken place in the industry since adoption of the present requirements. The commenters, in addition to providing support for updating the reporting requirements, also provided a great deal of very helpful input about the specific types of updates needed. The staff considered this input carefully in developing the recommendations for the Commission.
"I am very pleased to be providing the Division's recommendations to the Commission to update our reporting requirements applicable to oil and gas companies," said John White, Director of the SEC's Division of Corporation Finance. "In the decades since adoption of the current requirements, there have been tremendous changes in the way reserves are measured and oil and gas companies do business, which are not yet reflected in our rules. The comments we received on last year's Concept Release were very helpful to us in developing our recommendations to the Commission, and I look forward to the further input we will receive on any proposals issued by the Commission."
Conrad Hewitt, SEC Chief Accountant, said, "This is obviously an important initiative by the staffs of the Division of Corporation Finance and the Office of the Chief Accountant. We are very interested in obtaining feedback from investors as to their views on whether the proposed rules will provide them with the information they need."
Issuance of a rule proposal by the Commission based on staff recommendations would require Commission approval, followed by a public comment period.