Canada: NI 51-101 Amendments Promote Improved Disclosure Of Oil & Gas Resources

The Canadian Securities Administrators (the "CSA") have published amendments (the "Amendments") to National Instrument 51-101 – Standards of Disclosure for Oil and GasActivities ("NI 51-101") and the related companion policy to NI 51-101 (the "Companion Policy"). In its announcement, the CSA indicated that the Amendments will promote improved disclosure of resources other than reserves and associated metrics while simultaneously providing increased flexibility for oil and gas issuers that operate and report in different jurisdictions and recover product types not previously recognized. While the effective date of the Amendments is July 1, 2015, reporting issuers are required to immediately follow the latest requirements of the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") including ROTR Guidelines and Bitumen Guidelines. The CSA expects the Amendments to be adopted in each jurisdiction of Canada, following the satisfaction of applicable ministerial approval  requirements.

Access a complete copy of the Amendments or the amended Companion Policy.

Summary Of The Amendments

Set forth below is a summary of the key changes resulting from the Amendments.

Alternative  Resources Evaluation Standard

Under the current rules, issuers are prohibited from making public disclosure of reserves other than estimates that have been prepared in accordance with the COGE Handbook. This has been problematic for certain reporting issuers who are also subject to, or wish to comply with, the reserves disclosure requirements of other regulatory regimes, including the Securities and Exchange Commission of the United States (the "SEC"). In the past, certain issuers have obtained exemptive relief allowing them to disclose reserves prepared in accordance with U.S. requirements in addition to their reserves prepared under NI 51-101.

The Amendments will allow for supplementary disclosure of resources using evaluation standards other than the COGE Handbook (referred to in the Amendments as an "alternative resource evaluation standard"). The disclosure under the alternative standard must be accompanied by the disclosure required by NI 51-101 and, among other things, be made in respect of a regime which is comparable to the COGE Handbook. In addition, the estimates must be prepared by a qualified reserves evaluator or auditor. In the revisions to the Companion Policy, the CSA has indicated that alternative resource evaluation standards that the CSA would consider acceptable include the SEC's oil and gas disclosure framework and the Petroleum Resource Management System prepared by the Society of Petroleum Engineers.

Product Types andProduction Group

The Amendments have imported the product type definitions from the COGE Handbook including "bitumen", "coal bed methane", "conventional natural gas", "shale gas", "synthetic crude oil" and "synthetic gas" and have refined those definitions for securities disclosure purposes. In addition, the concept of "production group" has been deleted from NI 51-101 and accordingly, the requirement to disclose a reporting issuer's reserves by production group will no longer be required in the annual statement of reserves data prepared in accordance with Form 51-101F1 – Statement of Reserves Data and Other Oil and Gas Information ("Form 51-101F1").

Contingent  and Prospective Resources

Under the Amendments, if a reporting issuer chooses to include contingent or prospective resources in an appendix to its annual statement of reserves  data (prepared in accordance with Form 51-101F1) the reporting issuer will be required to include a summary of the future net revenue associated with such resources based on forecast prices and costs (comparable to the summary provided for reserves data) and the estimates of the resources and related future net revenue must be evaluated or audited by an independent qualified reserves evaluator or auditor. In addition, Section 5.9 (Disclosure of Resources Other than Reserves) of NI 51-101 has been amended to require issuers to include a description of resources recovery projects including estimated total cost to achieve (and estimated date of) commercial production, recovery technology and whether a project is a conceptual or pre-development study.

Oil and Gas Metrics

"Oil and gas metric" means a numerical measure of  a reporting issuer's oil and gas activities and includes finding and development costs, BOEs, reserves replacement and netbacks. Under the Amendments, Sections 5.11 (Net Asset Value and Net Asset Value perShare ), 5.12 (Reserve Replacement ), 5.13 (Netbacks ), 5.14 (BOEs and McfGEs ) and 5.15 (Finding and Development Costs ) of NI 51-101 will be deleted in their entirety and replaced with a "principle-based" approach to disclosure. Pursuant to the Amendments, if a reporting issuer discloses an oil and gas metric, the reporting issuer must identify the standard and source of the oil and gas metric, provide a description of the method used to determine the oil and gas  metric, provide an explanation of the meaning of the oil and gas metric and caution readers as to the reliability of the oil and gas metric. If there is no identifiable standard for an oil and gas metric, the reporting issuer must also include a brief description of the parameters used in the calculation of the oil and gas metric and provide a cautionary statement that the oil and gas metric does not have any standardized meaning and should not be used to make comparisons.

Marketability of Production and Reserves

The Amendments will require disclosure of resources or of sales of product types or associated byproducts at the "first point of sale" provided that a reporting issuer may disclose resources or sales of product types or associated byproducts with respect to an "alternate reference point" if, to a reasonable person, the resources, product types or associated byproducts would be marketable at the alternate reference point. If a reporting issuer chooses to disclose resources or sales of product types or associated byproducts with respect to an alternate reference point, the reporting issuer must state that fact, disclose the location of the alternate reference point and explain why disclosure is not being made with respect to the first point of sale.

Abandonment  and Reclamation Costs

The CSA noted in its request for comments that there is inconsistency in the determination of what constitutes abandonment and reclamation costs for the purposes of oil and gas disclosure. In order to provide clarity, the Amendments define "abandonment and reclamation costs" in NI 51-101. In addition, Item 6.4 (Additional Information Concerning Abandonmentand Reclamation Costs ) of the current Form 51-101F1 has been repealed in its entirety and reporting issuers will instead be required to include a discussion of any significant abandonment and reclamation costs in the significant factors and uncertainties disclosure in the annual statement of reserves data prepared in accordance with Form 51-101F1.

Other Amendments

With the introduction of IFRS 11, the Amendments refer to the COGE Handbook for the purpose of determining ownership and allow for flexibility in the manner of presenting resources for which a reporting issuer does not have control. In connection with the foregoing, Items 2.3 (Reserves Disclosure Varies with Accounting) and 2.4 (Future Net Revenue Disclosure Varies withAccounting ) of Form 51-101F1 have been repealed.

Under the Amendments, the requirement to obtain the consent of the independent qualified reserves evaluator before disclosing results from the annual evaluation outside of the required annual filings has been removed.

The Amendments will require reporting issuers that cease to be engaged in oil and gas activities to file a notice in the form of Form 51-101F5 – Notice ofCeasing to Engage in Oil and Gas Activities not later than 10 days after ceasing to be engaged in oil and gas activities.

The revised Companion Policy clarifies that a qualified reserves evaluator or auditor should not revise an evaluation using information in respect of events occurring after the effective date of that evaluation  for disclosure purposes. The revised Companion  Policy also clarifies that reporting issuers that have no reserves do not need to retain an evaluator or auditor, and that the reporting issuer should make clear that it has no reserves and is therefore not reporting related future net revenue.

The revised Companion Policy also includes new guidance with respect to the disclosure of after-tax net present value. In the revised guidance the CSA has stated that, if a reporting issuer discloses after- tax net present value, it should generally include, as appropriate, one or more of the following:

  • a general explanation of the method and assumptions used in the calculation of after-tax net present value, worded to reflect the reporting issuer's specific circumstances and the approach taken. The revised Companion Policy states that major aspects should be addressed, such as whether tax pools have been included in the evaluation; and
  • an explanatory statement to the effect that the after-tax net present value of the entity's oil and gas properties reflects the tax burden on the properties on a stand-alone basis, does not consider the business entity-level tax situation or tax planning, does not provide an estimate of the value at the business entity and that the financial statements and related MD&A of the entity should be consulted.

About BLG

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Stikeman Elliott LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Stikeman Elliott LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions