SEC proposes new oil and gas reporting rules

WASHINGTON (Reuters) - Changes in the rules on how energy companies report their reserves, proposed by the U.S. Securities and Exchange Commission on Thursday and favored by the industry, would give investors a clearer picture of a company's oil and natural gas reserves, the SEC said.

The proposal reflects improved technologies and alternative extraction methods, the SEC said. If adopted, it would allow previously excluded resources such as oil sands to be classified as reserves -- one of the changes the industry has sought.

Energy companies could also disclose probable and possible reserves to investors under the proposal. Current rules limit disclosure to only proved reserves.

"The proposed rule changes will allow oil and gas companies to determine their reserves in a manner that is consistent with existing technologies," John White, the SEC's corporation finance director, said in a statement.

Another important change would require companies to report oil and gas reserves using an average price based on the prior 12-month period, rather than a year-end price. That would help investors compare companies' reserve estimates and mitigate price distortions, the SEC said.

"The ability to accurately assess proved reserves is an important part of understanding any energy company's financial position," SEC Chairman Christopher Cox said in a statement.

The rule changes would help U.S. oil companies boost their reserves -- and their appeal to investors -- during a period when their access to new domestic fields has been restricted and their contracts abroad have given a larger share of reserves to host countries, at higher oil prices.

U.S. oil companies have had difficulty growing their reserve base the last several years, making most of their profits on higher oil prices.

Calls to major energy company associations were not immediately returned.