A new report published today by Standard & Poor’s Ratings Services warns that uniquely Canadian reserves booking issues have begun plaguing oil & gas firms’ reported results.

According to the report, smaller Canadian oil and gas companies, which are not SEC registrants, are reporting under Canadian reporting standards; whereas larger more diversified companies, specifically those issuing debt and equity in the United States, are reporting under U.S. reserves reporting protocols.

“As a result of these reporting options, it is increasingly difficult to compare reported barrels among Canadian oil and gas companies and those domiciled in other countries,” said Standard & Poor’s credit analyst Michelle Dathorne, in a release.

Despite its many benefits, there are a number of requirements under Canada’s oil and gas disclosure rules that are at odds with SEC reporting standards, it says. “Most notably, Canada allows for the use of forecast pricing when valuing reserves at year-end where the SEC rules do not,” S&P notes.

“Negative reserve revisions reported by Canadian SEC registrants under SEC constant year-end prices and costs can affect both the net present value and quantum of reported reserves,” it explains. “Furthermore, proposed amendments to Canada’s reporting standards, while providing greater clarity, may increase the disparity between Canadian companies reporting under NI 51-101 and other companies reporting under U.S. and other international standards.”

The report discusses the adjustments Standard & Poor’s makes to ensure Canadian oil and gas reserves remain comparable within the global ratings universe. “To ensure a more apples-to-apples comparison, we use net reserves and production to align Canadian reported results with those of the oil and gas companies reporting under the SEC rules,” said Dathorne.