AG-12 Determining Finding, Development, and Acquisition Costs

Exploration and Production Companies are required to report finding / acquisition costs in accordance with Statement of Financial Accounting Standards (SFAS 69) and in form 10K. However, few companies use these standards for computing these costs for internal purposes. This publication explains the various other methods and their applicability to certain situations. 23 pages. 2011.

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Description

Table of Contents

  1. INTRODUCTION
  2. TYPES OF COSTS INCLUDED
    1. Total Costs Incurred
    2. Acquisition
    3. Exploration
    4. Development
  3. TYPES OF RESERVES INCLUDED
    1. Proved Reserves Discovered
    2. Proved Reserves Purchased
    3. Proved Reserves Revisions
    4. Reserves from Improved Recovery
    5. Probable Reserves Discovered
  4. METHODOLOGIES
    1. Basic FD Costs
    2. Exclude Certain Current Year Acquisition Costs
      1. Exclude Proved Property Acquisitions
      2. Exclude Unproved Property Acquisitions
      3. Exclude All Acquisitions
    3. Exclude Current Year Costs Incurred for Unsuccessful Exploration
    4. Include Change in Future Development Costs
    5. Base Reserve Adjustments
      1. Current Year Reserve Additions Less Price Revisions
      2. Current Year Reserve Additions Less Revisions in Estimates
      3. Current Year Reserve Additions Less Price Revisions and Revisions in Estimates
      4. Current Year Reserve Additions Less Proved Undeveloped Reserve Additions
    6. Include Probable Reserves
  5. SUMMARY
  6. EXHIBIT A – Finding, Development and Acquisition Costs – Examples of Methodologies