Back in February, I criticized the SEC’s rules regarding how energy companies must disclose their oil reserves in securities filings. My main point was that the conservative way the SEC measures reserves is quite different from the measurement approach the oil companies themselves take when deciding how to invest billions of their own dollars. If the SEC is going to require disclosure of some reserve estimate, shouldn’t it be the estimate upon which managers are willing to bet the corporation’s money?
An op-ed in today’s W$J makes the same point and nicely explains what’s wrong with the SEC’s antiquated oil disclosure rules.