Abstract
Oil and gas reserves estimates which honor disclosure requirements of the U.S. Securities and Exchange Commission (SEC) are critically important in the international oil and gas industry. Unfortunately, a number of E&P companies have allegedly overstated and subsequently written down certain reserves volumes in recent years. In some cases, the consequences have been quite adverse. We document some of these cases of reserves overstatements and summarize the consequences. Reserves write-downs are of obvious interest to numerous groups involved in the reserves estimation process and outcome, including estimators, managers, investors, creditors, and regulators. The magnitude and nature of recent overstatement cases, relative unfamiliarity with the SEC's inner-workings, and the Commission's new reserves reporting requirements, increase the need to examine critically reserves disclosures and reserves overstatements.
