Petroleum Accounting and Financial Management Journal

Fall/Winter 2004 Vol. 23 № 3
Oil and Gas Asset Impairment by Full Cost and Successful Efforts Firms 1
Yahya Al-Jabr and Nasser Spear

This study provides empirical evidence on reported write-downs associated with asset impairment by oil and gas firms during the sample period 1995-2001. While FC firms have been required to test for asset impairment and recognize write-downs since 1978, SE firms were not formally required to do so until 1995 when SF AS 121 became effective. The evidence suggests that the impairment rules do eliminate the perceived varying degree of accounting conservatism (or aggressiveness) inherent in the choice of accounting method by oil and gas firms.

Oil and Gas Asset Impairment by Full Cost and Successful Efforts Firms. Al-Jabr, Yahya and Spear, Nasser, Fall/Winter 2004, pp. 1‑25.

FRS12 "Provisions, Contingent Liabilities and Contingent Assets": A Survey of Preparers of UK Oil and Gas Statements 26
Julianna Jetty

Europe is currently bracing itself in anticipation of the 2005 implementation of lnternational Financial Reporting Standards (IFRSs) by all listed European companies. In the U.K., this process of change has already begun; over the last few years, the U.K.'s Accounting Standards Board (ASB) has worked closely with the International Accounting Standards Board (lAS B) in developing a number of joint projects. The benefits of increased transparency resulting from the prescriptions of the standard are, in the view of preparers, likely to be of limited value due to an inadequate amount of guidance and disclosure within the standard in key areas. Despite this, the survey reveals that FRS 12 may improve financial reporting of provisions and contingencies.

FRS12 "Provisions, Contingent Liabilities and Contingent Assets": A Survey of Preparers of UK Oil and Gas Statements. Jetty, Julianna, Fall/Winter 2004, pp. 26‑59.

A Meta-Modeling Approach to Fiscal System Analysis, Part II. Deepwater Royalty Relief in the Gulf of Mexico: A Case Study of Na Kika 60
Mark J. Kaiser and Allan G. Pulsipher

This is the second installment of a four-part study on a meta-modeling approach to fiscal system analysis. This paper seeks to estimate the impact of royalty relief associated with the Deepwater Na Kika development in the Gulf of Mexico. A meta-modeling approach is employed to develop regression models for the take and investment criteria of Na Kika in terms of various exogenous, fiscal, and user-defined parameters.

A Meta-Modeling Approach to Fiscal System Analysis, Part II. Deepwater Royalty Relief in the Gulf of Mexico: A Case Study of Na Kika. Kaiser, Mark J. and Pulsipher, Allan G., Fall/Winter 2004, pp. 60‑74.

Analysis of the Energy Provisions of the American Jobs Creation Act of 2004 75
Nancy C. Pohl

On October 22, 2004, Congress passed the American Jobs Creation Act of 2004 which impacted many areas of the Internal Revenue Code of 1986, including the taxation of energy. This article will summarize and discuss the provisions in the 2004 Act that have the greatest impact on the energy industry.

Analysis of the Energy Provisions of the American Jobs Creation Act of 2004. Pohl, Nancy C., Fall/Winter 2004, pp. 75‑94.

Interpretation of SFAS No. 143, "Accounting for Conditional Asset Retirement Obligations: An Interpretation of FASB Statement No. 143" 95
Charlotte Wright

SFAS No. 143 requires that companies recognize liabilities for asset retirement obligations in the period in which the obligation is incurred if a reasonable estimate of fair value can be made and defames the term retirement as being the other-than-temporary removal of a long-lived asset from service via sale, abandonment, recycling, or disposal, but not the temporary idling of such asset. Numerous questions have arisen regarding the timing of recognition of the asset retirement obligation liability when the performance of the retirement activity is conditional on a future event. On June 17, 2004, the F ASB issued an exposure draft for a proposed interpretation of SFAS No. 143, "Accounting for Conditional Asset Retirement Obligations: An Interpretation of F ASB Statement No. 143."

Interpretation of SFAS No. 143, "Accounting for Conditional Asset Retirement Obligations: An Interpretation of FASB Statement No. 143". Wright, Charlotte, Fall/Winter 2004, pp. 95‑97.

Higher Prices, Lower Government Take? 98
Daniel Johnston

It is not enough anymore for countries to ensure that they have "competitive" or "comparable" terms because "comparable terms" may lead to comparable lackluster exploration activity. To this end, many countries and provinces have been considering how they might possibly double or triple the number of exploratory wells drilled each year. Unfortunately, it is usually difficult for government officials to make big changes because the officials who see the need to make the changes often do not have authority to do so. For those who do have the authority, it is a leap not many are willing to make.

Higher Prices, Lower Government Take? Johnston, Daniel, Fall/Winter 2004, pp. 98‑104.

COPAS: An Update 105
Jon Gear

An update on the activities of the various committees and subcommittees of the Council of Petroleum Accountants Societies (COPAS), including a report on the national meeting in San Antonio.

COPAS: An Update. Gear, Jon, Fall/Winter 2004, pp. 105‑112.