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Proposed Amendments to NI 51-101 Standards of Disclosure for Oil and Gas Activities
Letter Summary:
The Canadian Advocacy Council agrees with this proposal. The use of constant pricing and costs set as the effective date of reserve evaluation can create a misleading representation of economic value. This is particularly relevant for heavy oil and bitumen that tend to be priced significantly below full-year averages at year-end. We note that one potential issue this may create is comparability between Canadian companies using different forecast prices and costs and also comparability to US peers that are required to use constant prices and costs as per SEC regulations.
Overview of the Council’s Comments:
The CSA has recognized the need to create additional requirements for a reporting issuer that reports resources that cannot be currently classified as reserves. The goal of this policy initiative is to improve the disclosure of resources and to provide additional guidance to reporting issuers wishing to make meaningful and understandable disclosure of their oil and gas resources.