Summary
This paper provides background information on the US Securities and Exchange
Commission's (SEC) newly defined term, reliable technology, which plays a
prominent role in the SEC's modernized regulations for reporting oil and gas
reserves. This background information will include criteria that reliable
technology must meet to ensure that it will provide the confidence level
required to categorize certain resources as reserves of any category (proved,
probable, or possible).
The new SEC rules for disclosing reserves no longer require that a limited
number of rigidly specified technologies be used to establish the confidence
level of reserves that a filer discloses. Reasonable certainty was required in
the past because only proved reserves could be disclosed, and, as an example,
reasonable certainty of economic production required either flow tests or
actual production to the surface except in the deepwater Gulf of Mexico. The
new rules allow any technology that has been proved empirically to lead to
correct conclusions, including proprietary technology, to be used to determine
the proper classification for a given petroleum accumulation. Unfortunately,
the industry has been provided with only limited guidance on which technologies
will be satisfactory and which technologies will not. This paper will present
an analysis of SEC publications for possible insight into its thinking about
this important issue.
Proper disclosure of reserves will depend vitally on a proper interpretation
of reliable technology. Note: The opinions expressed in this paper are the
author's alone. They represent the opinions of neither the US SEC nor its staff
members.
© 2010. Society of Petroleum Engineers
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History
- Original manuscript received:
12 June 2010
- Meeting paper published:
4 May 2010
- Revised manuscript received:
13 May 2010
- Manuscript approved:
18 May 2010
- Published online:
13 September 2010
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