Oil and gas reserves are poised to become a hot disclosure topic. On October 30, 2009, the Office of the Chief Accountant of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin 113, which contains updated guidance on how the agency’s staff interprets accounting rules related to the oil and gas industry. The updates correspond with the SEC final rule Modernization of Oil and Gas Reporting, released in December 2008. The rules and corresponding guidance are intended to update oil and gas reserve accounting conventions.

The rules and guidance are designed to take into account 25 years of technological innovations, industry lobbying, and market changes. Some of key changes include the removal of the exclusion of unconventional extraction methods as oil and gas producing activities and changing the price used in determining quantities of oil and natural gas reserves.

The Modernization of Oil and Gas Reporting final rule and staff Accounting Bulletin 113 are already impacting disclosures throughout the oil and gas industry. Companies disclosing the possible effects include Kinder Morgan Energy Partners, Ivanhoe Energy, and Encore Acquisition Co. We at Westlaw Business anticipated increased disclosure relating to oil and gas reserve reporting is a disclosure hot topic and have compiled these resources to assist you with similar disclosures.