Not all barrels are created equal: understanding the difference between standards of regulatory disclosure can impact your investment decisions
Arthur L. McMullen A B and Warren Chung AA Sproule 900, North Tower, Sun Life Plaza, 140 Fourth Avenue SW, Calgary AB, T2P 3N3, Canada.
B Corresponding author. Email: Art.McMullen@sproule.com
The APPEA Journal 57(2) 506-510 https://doi.org/10.1071/AJ16048
Accepted: 21 March 2017 Published: 29 May 2017
Abstract
Petroleum industry stakeholders rely on estimates of petroleum reserves and resources as a cornerstone for making informed strategic investment decisions. Whether assessing a property or corporate target in a mergers and acquisitions process, seeking or providing equity or debt financing, developing upstream or downstream projects, engaging in sales contract negotiations or satisfying regulatory disclosure requirements, a clear understanding of the basis of these estimates is critical. Worldwide, several standards of resource estimation are widely accepted (Society of Petroleum Engineers Petroleum Resources Management System (SPE-PRMS), Securities and Exchange Commission (SEC) guidelines and Canadian Oil and Gas Evaluation Handbook (COGEH)) and disclosure requirements depend on the regulatory jurisdiction (i.e. Australia, Australian Stock Exchange (ASX) Listing Rules Chapter 5; USA, SEC Regulation S-K; Canada, NI 51-101). Understanding the differences in these standards is imperative for correctly assessing value, development potential and project risks.
Focusing on Australia, the United States of America and Canada, this presentation identifies key differences in these standards, and the potential implications affecting your strategic investment decisions.
Keywords: ASX, Australia, Canada, COGEH, evaluation, investment, NI 51-101, reserves, resources, SEC, SPE-PRMS, standards of estimation, standards of regulatory disclosure, United States.
Arthur L. McMullen, P.Eng, RPEQ, is Regional Manager, Asia Pacific and Senior Manager of Engineering at Sproule. He has been a Sproule professional since 2011. He has over 35 years of experience in the oil and gas business, including extensive knowledge in many areas of coal-bed methane, conventional and unconventional oil and gas. |
Warren Chung, P.Eng, is a petroleum engineer and he has been a Sproule professional since 2012. He has reserves experience in New Zealand, the United States, and a particular specialisation in emerging tight oil and gas plays in the Western Canadian Sedimentary Basin. He also has experience in regulatory development and reform in South America. |
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