CSA Issues Revised Guidance on Oil and Gas Disclosure


On December 29, 2011, the Canadian Securities Administrators (“CSA”) published Revised CSA Staff Notice 51-327 Guidance on Oil and Gas Disclosure (“51-327”). 51-327 was originally published on February 27, 2009, and revised on December 30, 2010, before being further revised on December 29, 2011. 51-327 provides guidance on compliance with aspects of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101). The updated 51-327 can be found here.

NI 51-101 applies to reporting issuers that are directly or indirectly engaged in oil and gas activities and who disclose reserves data and other information regarding their oil and gas projects. The latest revisions to 51-327 were made to discuss observations by CSA staff in reviewing public disclosure in light of recent amendments to NI 51-101 and to re-emphasize or expand guidance on some issues discussed in previous versions of 51-327.

The 2011 revisions to 51-327 include the following:

  1. New guidance on the general responsibilities of oil and gas issuers and the experts on whom they rely in formulating disclosure of oil and gas information.
  2. New guidance on the following disclosure topics:
    1. Disclosure of after-tax net present value of future net revenue;
    2. Use of BOEs (barrels of oil equivalent) in disclosure; and
    3. Disclosure of well-flow test results;
  3. Expanded guidance on the following disclosure topics:
    1. Evaluation, classification and disclosure of unconventional hydrocarbons, including revised guidance on disclosure of contingent resources; and
    2. Classification to the most specific class and category of resource.
  4. Guidance carried forward from the original version of this Notice with little or no change on the following disclosure topics:
    1. Stand-alone possible reserves;
    2. Aggregation of resource estimates for several properties;
    3. Use of the term “best estimate”; and
    4. Prospective resources.

There are also tips on cautionary language in disclosure documents, discussion about disclosure of material changes, and references to the COGE Handbook and other industry standard reference materials.