US GAAP recognizes the option pricing approach; however, its use is not widespread. This may be because it is not a well understood method for valuing assets and because the mathematics look fundable. This paper describes the option pricing approach, compares it to the discounted cash flow approach, and assesses the significant differential impact of the two methods on a company's financial reports.

Reduce Asset Impairment Reported under SFAS 121. Boone, Jeff P. and Coe, Teddy L., Summer 2001, pp. 1‑9.

This year's benchmarking study concentrates on the performance ratios of independent oil and gas companies. In addition to an overview of differences in key benchmark ratios for 1999 and 2000, the authors also compare these ratios by sales quartile. The final section compares these ratios by performance quartile, i.e., the actual ratio from lowest to highest regardless of firm size.

Benchmark Performance Ratios for Oil and Gas Industry Independents, 1999-2000. MacLeod, C.W.; Johnsen, Tommi; Rizzuto, Ron; and Grove, Hugh, Summer 2001, pp. 10‑24.

In spite of their apparent simplicity and very long history, the interpretation and application of statutes of limitations still give rise to controversy. Nowhere does this seem more true than in the oil and gas business where many injuries are far from obvious to even the most alert landowner. This article describes some recent controversies involving the application of statutes of limitations to oil and gas matters and gives special emphasis to how courts have dealt with claims for equitable relief fron1 the statutes.

Current Issues Involving the Statute of Limitations. Smith, Ernest E., Summer 2001, pp. 25‑46.

Mr. Reed shares his experience in class actions and mass actions which arise directly from the oil patch. This article addresses some practical aspects of the use of class actions in oil and gas royalty cases from the plaintiff's perspective, highlights some state and federal cases, and references some helpful sources. See the following article.

Plaintiff's Perspective: Class Actions in Royalty Cases. Reed, James L., Summer 2001, pp. 47‑62.

This paper, a companion piece to the preceding article, discusses class action in state and federal oil and gas cases from the defendant's perspective. In the past few years, high courts in oil-rich states such as Louisiana and Texas have recognized and applied the conservative standards of federal class action jurisprudence, most significantly in the opinions in Ford v. Murphy Oil U.S.A, Inc. and Southwestern Refining Co. v. Bernal. Class actions are not new to the oil and gas industry, and they are not likely to go away.

Class Action Litigation Comes to the Oil Patch. Schwartz, Charles, Summer 2001, pp. 63‑104.

This article addresses the issue of when insurance proceeds from environmental pollution claims may be deferred from gross income. When companies successfully obtain judgements or settlements through their comprehensive general liability (CGL) insurance for remediation costs, the income tax consequences are usually straightforward. However, environmental matters are seldom straightforward.

When May Insurance Proceeds from Environmental Pollution Claims Be Deferred from Gross Income? Sullivan, Gloria, Summer 2001, pp. 105‑117.

Mr. Johnston reports on a June meeting in Phuket, Thailand of both oil companies and governments. The combination of misperceptions and diverse non-standard terminology, frustrations, and suspicions created enough confusion to keep the conference lively from start to finish. The discussions also indicated that the science of fiscal system analysis and design is evolving but still lags behind some of the more highly evolved sciences such as petroleum engineering and even geology.

Current Developments in Production Sharing Contracts and International Petroleum Concerns. Johnston, Daniel, Summer 2001, pp. 118‑124.

One axiom of the e-business world is that events truly do occurs at the speed of the Internet. Middle market petroleum companies, whose edge over the mighty majors has been their flexibility and nimbleness, will have to adopt new automated procedures to be able to keep up with the new-found speed of the giants.

Current Developments in e-Business and Energy. Hoffman, Jim, Summer 2001, pp. 125‑131.

A report on the activities of the various committees of the Council of Petroleum Accountants Societies (COPAS) from the executive director.

COPAS: An Update. Gear, Jon, Summer 2001, pp. 132‑139.