SEC Staff Issues Guildelines for Oil Companies

In order to help energy companies meet requirements for providing more detailed information to investors when they report oil and natural gas reserves, federal regulators issued a new set of guidelines on Friday. Reserves are an oil company’s most treasured asset, and a very important indicator of the company’s long-term financial prospects.

The revised guidelines from the chief accountant’s office at the Securities and Exchange Commission include various changes in the pricing used to determine the size of oil and natural gas reserves. The guidelines also allow rather unconventional methods for extracting oil and gas from oil sand and shale to be included in companies’ accounting for oil production activities.

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