New SEC Rules, New Valuations Of Unconventional-Resource Reserves?

The rules have changed and go in effect with year-end 2009 financial reporting. How do the new parameters affect valuation of unconventional-resource reserves, in particular? And, will the effects begin to seen before year-end?

Of offset wells in 10-acre infill locations, many are no longer considered direct offsets to the 40-acre PDP. SEC current guidance is that 40-acre offsets should be "debooked" when 10-acre offsets are added.

The SEC views horizontal wells as a series of vertical wells. Current guidance is that bookings should be limited to direct, parallel offsets.

Proved was limited to direct offsets around a well, under the old rules. Now, each case depends on property maturity, data (rich or poor), consistency in results/methods, geologic understanding, analogy to other areas, leasehold ownership, development schedule and leverage effect.

Featuring:

• Scott Rees, Chairman and CEO, Netherland, Sewell & Associates, Inc.

Total Length: 00:23:53

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