The new duty to inform oil and gas reserves

1.    A new obligation in the regulations of the CNV

Resolution No 542 (the “Resolution”)[1] incorporates to Annex I of the XXIII Chapter “Periodical Disclosure Regime” of the CNV regulations, the paragraph XXIII.11.17 “Information on oil and gas reserves”. The Resolution reinforces the “full disclosure” principle that must prevail in the securities markets, as required by the Transparency Decree No 677/2001. This information is relevant for the investment decision of the public and for the appraisal of the value of the oil and/or gas producer companies and assets.

2.    Scope and filing opportunity

The Resolution will apply to the oil and/or gas producers that are registered to publicly offer their securities. These companies must provide the relevant information regarding the production, reserves, location and development of the oilfields at the end of each fiscal year.

This information must be provided as complementary information to the financial statements of each fiscal year.

If the information is not available when the financial statements are to be published, it must be informed, before the celebration of the ordinary shareholders’ meeting that considers the financial statements of the relevant fiscal year, as a relevant fact through the CNV’s online information system (the “AIF” or “Autopista de la Información Financiera”).

3.    Relevant information to be provided

The Resolution establishes that the information to be provided is only related to the “proved reserves” of oil and/or gas. “Proved reserves” of oil and/or gas are those reserves of crude oil, natural gas or equivalents that geological and engineering data indicate with reasonable certainty to be recoverable today, or in the near future, with current technology and under current economic conditions.

The company must also inform separately, the proved reserves currently existing in oilfields located in Argentina and in other geographical areas.

If the estimations provided on the reserves are based on the information prepared by independent consultants, reference to these consultants must be specifically made.

The information on the proved reserves must be classified as follows:

(i)                 Reserves of crude and condensed oil and of natural gas liquids;

(ii)                 Reserves of natural gas.

The companies must provide the information of their own proved reserves (developed and non-developed), as well as the information of the affiliates proved reserves of its affiliates. These must be filed in separate categories.

In addition, and simultaneously with the filing with the CNV, the companies must provide, through the AIF, all the information that is required regarding their oil and/or gas reserves by the relevant authorities in the foreign capital markets where they make public offer.