The most recent version of the "Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information" (the Standards) was approved by the SPE Board contemporaneously with the release of the March 2007 SPE/WPC/AAPG/SPEE Petroleum Resources Management System (PRMS). This represents the first significant revision of the Standards since their issuance by SPE in 1977. A few minor changes were made to the Standards in 2001 but only as necessary to achieve conformance with the 1997 SPE/WPC Reserves Definitions. The 2007 Standards incorporate revisions targeted to elevate the qualifications of evaluators and auditors along with clarifying several previously undefined terms and conditions. A copy can be obtained through www.spe.org.

The Setting of the 1977 Standards

The initial version of the Standards was created at a time in the history of the United States when US politicians, industrialists and the general public still had fresh memories of the gasoline lines created by the Arab oil embargo of the early 1970s. The US Congress responded with the creation of the Federal Energy Administration in 1974, the Department of Energy in 1977, the Natural Gas Policy Act in 1978 and the Public Utilities Regulatory Policy Act in 1978. The US SEC responded in 1978 with its requirement for publicly-owned oil and gas producers to annually report proved oil and gas reserves. This mandate emanated from the US Financial Accounting Standards Board (FASB) FAS 19 order issued in 1977 which became effective for producers with fiscal years beginning after December 15, 1978.

The SPE committee members responsible for drafting the 1977 Standards are shown below:

Individual Company affiliation

Ned Babson Babson & Shepherd

Arlen Edgar - Chairman Independent

Bob Gilmore D & M

Dwayne Godsey Godsey & Earlougher

Bill Granberry AMOCO

James D. Henry ARCO

Joe Richardson EXXON

Bert Wheeler CONOCO

The document was well conceived and written but seemed to assume that the corporate training programs in place at that time would produce competent evaluators and auditors without any specific references to the basic competencies required. This assumption was likely well founded at that time as producers were not prone to place untrained reserves evaluators in such positions of responsibility without some assurance of their abilities. Similarly, independent reservoir engineering consultants and the banking community were seeking to employ individuals having several years of relevant experience.

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