On December 4, 2014, the Canadian Securities Administrators (CSA) published amendments to National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) and Companion Policy 51-101 Standards of Disclosure for Oil and Gas Activities and related forms. The amendments will:
- permit disclosure from alternative resources evaluation standards and regimes, provided that such disclosure: (i) is accompanied by the disclosure required by NI 51-101; (ii) is made in respect of a regime comparable to the Canadian Oil and Gas Evaluation Handbook (COGE Handbook); (iii) has a scientific basis and is based on reasonable assumptions; and (iv) is prepared or audited by a qualified reserves evaluator or auditor;
- import and refine the product type definitions from the COGE Handbook for which disclosure must be made, removing the concept of product groups and focusing on the oil and gas sources and recovery processes;
- enhance and improve disclosure requirements with respect to the disclosure of contingent resources data and prospective resources data in annual filings;
- set out principle-based requirements to describe the standard, methodology and meaning of a publicly disclosed oil and gas metric and, if no standard is used, require an issuer to describe the parameters used in calculating the oil and gas metric and to provide a cautionary statement;
- provide guidance on marketability in the reporting of oil and gas volumes, requiring a reporting issuer to report volumes and values at the first point of sale of the particular product type where relevant;
- clarify what constitutes abandonment and reclamation costs and require more detailed disclosure of reserves data, both in the future net revenue disclosure and in the significant factors or uncertainties disclosure in the statement prepared in accordance with Form 51-101F1 Standards of Disclosure for Oil and Gas Activities;
- revise the manner of presenting resources over which a reporting issuer does not have control; and
- align NI 51-101 with the amended COGE Handbook, including the guidelines for the estimation and classification of resources other than reserves (ROTR Guidelines) which became effective July 17, 2014 and the guidelines for the estimation and classification of bitumen resources (Bitumen Guidelines) published on April 1, 2014.
Subject to Ministerial approval, the amendments will come into force on July 1, 2015. As such, issuers with a December 31 year end should note that the changes to the annual disclosure requirements will apply in respect of the year ending December 31, 2015. Reporting issuers are immediately required to follow the latest requirements of the COGE Handbook, including the ROTR Guidelines and the Bitumen Guidelines.
In connection with the amendments to NI-51-101, the CSA also published CSA Staff Notice 51-324 Revised Glossary to NI 51-101 Standards of Disclosure for Oil and Gas Activities to update the defined terms to align with the COGE Handbook and CSA Staff Notice 51-327 Revised Guidance on Oil and Gas Disclosure to provide additional disclosure guidance.