The accountants for oil companies report their employers' "proven reserves" of crude oil. Not a difficult concept to grasp, right? A "reserve" is like a company's inventory -- except that insofar as it is "reserve" it hasn't been recovered yet -- it is still in the ground. But we known where it is, because that is implied in the adjective "proven," right?
Well ... maybe not. Alan von Altendorf suggests that there is some controversy about these simple-seeming terms.
Altendorf begins with the fact that the SEC has two new regulations coming into effect on January 1, 2010, that bear on this matter: S-K and S-X.
I'll skip down to page 7 of the PDF for you: "The new SEC rules are a joke and
professional explorationists know it. Very few will speak out about it, because there was a wave of computer automation and black box software to cover up and gloss over the shortage of experienced oil & gas geoscientists."
Who is Altendorf? The principal of CWSF, an independent oil consultancy out of Houston. I know nothing first-hand about him, but normally reliable folk think he's a bright guy who knows the field. It which case, the new rules may just be a cover for fraud and very bad news.
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