Subject: File No. s7-29-07
From: Leigh Ann Smothers
Affiliation: law student

February 13, 2008

Thank you for the opportunity to comment on this proposed rule.

In general, my opinion is that I would like to see a revision to the current disclosure requirements that both loosens the current strict disclosure requirements and explains the concepts and rules in terms familiar to the oil and gas industry.

Technology has changed the oil and gas industry since 1978, when the original rules were composed. The location of reserves can be estimated at a higher level of geological investigation, using new methods such as seismic technology. The fact that the drilling and production of this recent oil boom will be better supported by data and pre-drilling background investigation has led many to believe it will be longer and continue more steadily. By putting in place looser disclosure requirements for oil reserves, everyone will be aware of these potential reserves and, furthermore, be able to view the possibility of production from them through the same lens as the companies with the ownership interest.

In specific, I will address a few of your questions.
3. I believe that it is a good idea of consider the Petroleum Resources Management System. This system has been approved by society of petroleum engineers. Many in the industry are familiar with the system and its principles and framework.

5. I think that certain tests should at least be suggested, and that companies, in disclosing reserves, should be required to describe the way in which they reached the conclusion that a probable reserve exists. I wouldnt go so far as to only allow certain tests—as I understand it, new tests are frequently gaining prevalence and credibility, and a closed list would might discourage the development of new technology. However, interested parties should be able to be aware of the test(s) used and thus be able to draw their own conclusions about the strength of the resulting data.

-Questions 6. and 8. I would like to see the key terms, such as reasonable certainty and economic productibility defined in a more meaningful way. If those are to remain key terms that are central to the function of the disclosure scheme, then it would be meaningful to see more elaboration on the concept—not just a tacit adoption of things that have been assumed in the past. If the Petroleum Resources Management System is used to formulate a new disclosure scheme, why not just use that for the definitions?