Musings: How to Question Reserve Reports Without Any Knowledge

In what now seems like the distant past, The New York Times wrote a series of articles suggesting that industry practitioners were raising questions about the economic performance of the gas shale wells and thus whether the extent of the resource was over stated. Those articles were written in late June and generated a firestorm of reaction within the natural gas industry, but also among Washington politicians.

What followed was disclosure that a handful of E&P companies, active in the gas shale business, had received subpoenas from the Securities and Exchange Commission (SEC) for their records of well performance and the economics of behind their reserve calculations. The data was sought to compare with the companies' disclosure regulatory filings and investor presentations of the operational risks, production performance and economics of these gas shale wells.

At the time the subpoenas were disclosed, we wrote about it in the Musings (last July), fully anticipating that there would be further disclosures. Since mid-summer, there has been no activity arising from the subpoenas.

What followed was disclosure that a handful of E&P companies, active in the gas shale business, had received subpoenas from the SEC for their records of well performance and the economics of behind their reserve calculations.

Our interest was piqued recently when we received a newsletter from an energy investment group we belong to that contained an employment ad for a petroleum engineer position with the SEC in Washington.....Read the entire Musings From The Oil Patch Article.


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