SEC comment letter trends for the energy and mining industry

Energy companies continue to operate in a complex environment, but have demonstrated the ability to adapt to new challenges, new rules and regulations and pursue opportunities in an increasingly global economy. In 2013, the industry has contended with volatile commodity prices, intense competition for reserves, a shortage of pipeline capacity to transport oil and gas from the field to where they are processed and consumed and continued cost reduction pressures to improve financial positions and profit margins.

Mining companies face similar matters as well as other challenges such as funding and maximizing resource development. In response, mining companies have scaled back capital expenditures, hurdle rates, and non-core assets are being disposed in effort to maximize value. Many of these factors for Energy and Mining impact areas of financial accounting and disclosure importance. Given the diversity of factors impacting registrants in the Energy and Mining industries, transparent and robust disclosures in financial reporting continue to be of extreme importance.

The SEC has not only focused on general areas common to all industries, but also concentrated on Energy and Mining specific accounting and disclosure matters. As the Energy and Mining comprise of various sub-sectors (upstream, mining, downstream, midstream and oil and gas field services), variations in comments received by the sub-sectors also exist.