The SEC (US Securities and Exchange Commission) just revised for the first time since 1982 the oil and gas reporting rules.

In order to better fit on the present techniques and reality, the reserve computation rules are modified in the way already track by the main professional association and administration (Society of Petroleum Engineers, Canadian regulatory authorities), and will focus on the following points:

- More flexibility in the validation techniques for the proved reserves, in particular for the undeveloped proved category.

- Evolution of the “reasonable certainty” concept toward more used probabilistic methods.

- Evolution of the economic rules, with in particular a price per barrel taken into account computed on an annual basis, when current rule was the 31th of December value.

- The Possible and Probable reserves can now be added to the Proved reserve on the company reporting.

- The concept of hydrocarbon reserve is now extended to the unconventional oil and gas (heavy oil, tight gas, coalbeds and shales gas…).

These two last points are very important, and will be strongly discussed.

It will be necessary to enter into the complexity of the definition of the Proved reserve (drilled and tested), the probable ones (with the best case hypothesis) and the possible ones (computed with maximum hypothesis).This is the famous three P rules, knowing that the range often doubles when changing  from one P to another.

As well for the unconventional hydrocarbon fields, it will be necessary to accurately detailed the appreciation and recovery rules, as they are, by definition, different from the well known conventional ones.

These rules will be applicable on 2010 and need to be anticipated on 2009. Some companies are already  predicting a huge amount of additional work, when other people predicts some confusion and  a possible market instability when all these numerous, complex and globally more optimistic data will be published.

More than ever, a big pedagogic challenge for the oil and gas industry…