Several significant issues have been addressed in the area of federal taxation. The IRS clarified its position with respect to the treatment of certain expenditures on offshore oil and gas platforms and the Tax Court further defined the distinction between sales and subleases. Several letter rulings and other IRS announcements addressed additional issues. This report also summarizes the IPAA's proposals for an Energy Security and Energy Incentive tax acts in Congress.

Current Updates in Oil and Gas Taxation. Mark, Richard S., Summer 1989, pp. 1‑6.

The Valdez oil spill raised a number of questions about the extent to which consideration of the cost of these events is included in management evaluation of oil projects. This discussion outlines the types of disaster-related costs which may need to be included in future project evaluations.

Oil Companies May Underestimate Cost of Spills. Dunford, Richard W., Summer 1989, pp. 7‑9.

Firms experience adverse consequences when oil and gas prices fall. The extent of these adverse consequences can be important for evaluating future cash flows for investors and creditors. Although the revenue impact of falling prices is understood, the effect of changing prices on production costs is not. This paper demonstrates that the income effect of falling oil prices is somewhat offset by declines in production costs. This observation may have implications for accounting disclosures.

Production Cost Disclosure Requirements for Petroleum Firms: Are They Adequate for Assessing Cash Flows? Crain, John L.; Morris, Joseph L.; and Wallace, William D., Summer 1989, pp. 10‑20.

When preparing financial reports, there is a problem in attempting to identify those items that are considered important for disclosure purposes from the myriad of possibilities. Disclosing items that are not useful results in excess costs while failing to disclose information deemed important results in investor dissatisfaction. This paper compares the items disclosed by oil and gas companies with the information deemed important by users. The results are quite interesting.

The Association between Importance of Information and Its Disclosure in the Financial Reports of Oil and Gas Producers. Malone, David, Summer 1989, pp. 21‑46.

In volatile markets, it is important to develop the best possible forecast of prices so that profits can be protected. This paper compares the forecast accuracy of individual versus group forecasts for petroleum products. The results are important for companies who wish to optimize profits from refining/marketing activities. The study also has implications for companies who need to make forecasts for upstream activities as well.

Individual versus Group Spot Price Forecasts: A Study of Relative Accuracy within the Petroleum Industry. Brocato, Joe; Kumar, Akhil; and Smith Kenneth L., Summer 1989, pp. 47‑58.

Audit fees are a significant cost for publicly held companies. Several studies have looked at the factors that cause fees to rise or fall for companies in general. Simon applies these techniques to the oil and gas industry to see what factors are associated with higher (lower) audit fees. The results can help management's efforts to optimize audit costs.

The Market for Audit Services in the U. S. Oil and Gas Industry. Simon, Daniel T., Summer 1989, pp. 59‑67.

The U.K. is presently involved in the promulgation of accounting rules for oil and gas exploration and development activities. This article surveyed oil and gas producers in the U.K. to identify actual practice as it currently exists so that the accounting rule makers could have further guidance. The results of the report are summarized in this article and provide insight into international practices.

Accounting for Oil and Gas Exploration and Development Activities: A Survey of Industry Practice in the United Kingdom. Pratt, Ken C., Summer 1989, pp. 68‑82.

This report is a survey of operating results for oil and gas producers in 1988. The report is drawn from the Institute of Petroleum Accounting's data base. It shows results of overall company operations, oil and gas operations, reserve data and standardized measure data for the industry and compared 1988 with 1987 on several important dimensions. Per barrel or mere and per share data are presented together with year-to-year change statistics for the industry as a whole and for primary industry segments. The results are useful to those wanting to see how the industry performed, generally and to compare their own firm performance with the industry averages.

1988 Financial Performance of the U. S. Petroleum Industry. Deakin, Edward B., Summer 1989, pp. 83‑100.

The economic interest concept is of major importance for determining the tax treatment of investments in oil and gas interests. This paper reviews the development of the concept by the judiciary. The analysis provides guidance into the current status of the economic interest concept and how it has evolved.

An Evaluation of the Determination of the Existence of Economic Interest in Natural Resources. Pasewark, William R. and Crumbley, D. Larry, Summer 1989, pp. 101‑115.

The program for the phased decontrol of oil prices was adopted by Congress with several objectives. Among these were to enhance domestic production and to promote energy independence. Now that this phase of the industry is past, it is useful to review the extent to which the program achieved its objectives. This article provides such a review and analysis.

The Phased Decontrol of Oil Prices: Economic Rent or Quasi-Rent? Schroeder, Richard G.; Holcomb, James; and Omundson, Janet, Summer 1989, pp. 116‑123.

Sixteen years have passed since the 1973 energy crisis. Despite the turmoil of that period, it appears that few guidelines are in place to prevent a recurrence of the crisis period. Indeed, given the declining production and increasing demand which characterize today's energy scene, it appears we are headed towards a repeat of the past. This article reviews parallels between then and now and suggests steps which need to be considered to avoid a repeat of past errors.

U. S. Energy Policy: Requirements, Opportunity, and Obstacles. Bergman, Elihu, Summer 1989, pp. 124‑133.