Australia: Are you prepared for the new oil and gas reporting requirements under the ASX Listing Rules?

Recent market announcements suggest that not all ASX listed oil and gas companies are prepared for the significant changes to the ASX Listing Rules which take effect from 1 December 2013.¹

ASX is unlikely to have much tolerance for companies that don't comply with the new rules after 1 December given the time companies have had to get ready for these changes,.

The new rules involve more than just classifying and reporting estimates in accordance with the SPE Petroleum Resources Management System (PRMS), which most companies are already doing.

Key changes include:

• a requirement to include a detailed prominent and proximate cautionary statement when reporting prospective resource estimates, which describes the character of prospective resources and their associated risks. The requirement for proximity will effectively mean that companies can no longer include such estimates in announcement headings;
• prohibiting the reporting of initially-in-place volumes in isolation without including estimates of all the other major petroleum resource classifications for the project as well as an explanation of any adjustments for risk²; and
• requiring the disclosure of the supporting information underlying the calculation of estimates of petroleum reserves, contingent resources or prospective resources in relation to a 'material oil and gas project'³ either for the first time, or when those estimates have 'materially changed'. The additional detail required comprises information that would have been considered by the qualified evaluator and will vary according to the classification of the petroleum resource.⁴.

Other Listing Rules changes that will affect listed oil and gas companies from 1 December include the requirement that companies must now include a reserves statement in their annual reports, and the changes to the requisite experience and qualifications for evaluators and when companies are required to obtain their consent when reporting.

Footnotes

¹A copy of the new Chapter 5 of the Listing Rules can be found here and a copy of new Guidance Note 32 for reporting on oil and gas activities can be found here.

²The required additional information cannot be in a footnote or endnote.

³A 'material oil and gas project' is defined in the Listing Rules as "one in which an oil and gas entity or a child entity has an economic interest (whether alone or jointly with others), where that interest is, or is likely to be, material in the context of the overall business operations or financial results of the entity and its child entities (on a consolidated basis)." ASX Guidance Note 32 provides a list of factors which an oil and gas company should consider in determining whether a particular oil and gas project is a material oil and gas project.

⁴For example, Petroleum Reserves require the disclosure of all of the material economic assumptions used to calculate those estimates

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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