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
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
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
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.
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
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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