HoustonChronicle.com: Top 3 oil firms say SEC asking questions
Reuters News Service
April 3, 2004, 12:49AM
NEW YORK — The three biggest U.S. oil companies have confirmed that the Securities and Exchange Commission is asking questions about reserves as the industry faces closer scrutiny after Royal Dutch/Shell Group slashed its reserves estimates.
Shell shocked investors Jan. 9 when it revealed it had overstated proven reserves by 20 percent. The disclosure prompted SEC and Justice Department probes at Shell and sparked investor fears of further scrutiny and revisions.
Exxon Mobil received a "comment letter" from the SEC in mid-January posing questions about its 2002 annual report, a spokeswoman for the world's largest publicly traded oil company said this week.
ChevronTexaco and Houston-based ConocoPhillips this week also confirmed receiving reserves questions from the SEC.
Officials from the three companies declined to elaborate on their SEC correspondence.
The SEC declined to comment on whether its investigation had expanded beyond Shell.
As the SEC digs, analysts and engineers say they don't expect widespread revisions.
"I don't see an epidemic breaking out," said Steve Enger, a Petrie Parkman & Co. analyst.
So far, only a few isolated cases have emerged.
The most likely outcome from the scrutiny will be wider use of independent auditors.