Drop in Oil and Gas Prices Masks Production Problems

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April 14, 2009 9:32pm NYSE:UNG NYSE:USO

oilMoody’s says the drop in oil and gas prices over the last year may have given some US oil and gas producers an opportunity to mask production problems — as opposed to uneconomical conditions — that may have contributed to downward revisions in their reserves.

Amid the steep drop in commodity prices, the reserves considered economical to produce under SEC rules have dwindled and independent exploration and production (E&P) companies’ reported reserves have dropped accordingly, Moody’s says. Changes in pricing rules which come into effect on January 1, 2010, promise a far less volatile valuation for oil and natural gas reserves over the years.

Full Story:  http://seekingalpha.com/article/130890-drop-in-oil-and-gas-prices-masks-production-problems?source=yahoo

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