From the Regulators

The revised requirements aim to promote improved disclosure of resources other than reserves

By James Langton |

Canadian securities regulators are adopting revisions to the disclosure requirements for energy companies.

The Canadian Securities Administrators (CSA) said Thursday it is implementing amendments to the specific disclosure requirements for companies engaged in the oil and gas business, which the regulators say are designed to "improve and clarify the disclosure" of energy industry issuers.

The CSA says that the proposed amendments stem from its ongoing evaluation of issuer disclosure and industry feedback on the existing disclosure requirements in this area. In particular, the revised requirements aim to promote improved disclosure of resources other than reserves.

In its notice, the CSA indicates that, "In recent years, the number of reporting issuers disclosing contingent and prospective resources has increased significantly. We have observed certain early stage issuers disclose resources other than reserves to convey the potential of their assets. To date, this disclosure has occurred both within and outside of the annual disclosure requirements with varying degrees of consistency and completeness."

The new requirements aim to enhance disclosure in this area, while also providing increased flexibility for oil and gas issuers that operate in, and report in, different jurisdictions; and, cover product types not previously recognized in the CSA's rules. The new requirements take effect July 1, 2015.

"Canada has developed one of the most effective and efficient oil and gas disclosure regimes in the world," said Bill Rice, chair of the CSA and chair and CEO of the Alberta Securities Commission (ASC). "These amendments are part of the CSA's ongoing efforts to ensure our disclosure policies continue to evolve alongside a dynamic oil and gas industry."

The CSA notes that earlier this year the Calgary Chapter of the Society of Petroleum Evaluation Engineers published guidelines for estimating and classifying resources other than reserves. It says that firms won't have to comply with these requirements until today's amendments take effect in July of next year. "This delayed effective date is to allow industry sufficient time to become familiar with the amendments and the recent changes to the COGE Handbook," it says.