On November 5, 2015, the Canadian Securities Administrators (CSA) published guidance for disclosure requirements for abandonment and reclamation costs respecting amendments in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) that were effective July 1, 2015 (Amendments).The purpose of the guidance is to remind reporting issuers engaged in oil and gas activities that publicly disclosed estimates of future net revenue must be net of abandonment and reclamation costs. In the Amendments, definitions for the terms “future net revenue” and “abandonment and reclamation costs” were added to section 1.1 of NI 51-101.
Item 2.1(2) of Form 51-101F1 Statement of Reserves Data and Other Oil and Gas Information (Form 51-101F1) mandates disclosure of future net revenue. Disclosure is required in aggregate by country and product type for the reserves categories specified in Item 2.1(1). Item 2.1(3) details specific disclosure of abandonment and reclamation costs. New Part 7 of Form 51-101F1 provides requirements regarding the optional disclosure of resources other than reserves.
Form 51-101F1 requires additional disclosure concerning significant abandonment and reclamation costs. In particular, Item 5.2 addresses instances where these costs affect particular components of reserves data and Item 6.2.1, in situations where they have affected or are reasonably expected to affect activities on properties with no attributed reserves.
The guidance can be accessed here.
If you have questions about disclosure of oil & gas projects, contact any member of Clark Wilson’s Corporate Finance & Securities Group.