Benchmarking Financial Reporting Practices in the US Oil and Gas Industry

Strategic Insights -

A recent survey by the Price Waterhouse World Petroleum Industry Group provides a valuable tool for benchmarking the accounting and financial reporting practices of leading public US oil and gas companies. The survey, titled "1995 Price Waterhouse Petroleum Industry Review: A Survey of Significant Accounting Practices By Leading U.S. Oil and Gas Companies," summarizes financial reporting practices related to new accounting pronouncements and industry-specific disclosures. The survey is based on data from annual reports and Form 10-Ks for the 1994 fiscal year.

Key Takeaways:

  • The survey provides a compilation of valuable disclosures that illustrate present practice in the petroleum industry, enabling investors and users to assess a company's financial condition, operational results, and liquidity.
  • 97% of the companies surveyed disclosed information about derivatives use, highlighting the significant role of financial derivatives in the global economy and international petroleum industry.
  • Most companies discussed anticipated cost reductions through restructuring and reorganization of jobs and non-core businesses, application of advanced technology, and outsourcing of certain functions.
  • The survey shows exponential growth in regulatory oversight of the industry and environmental programs of oil and gas companies.
  • Environmental regulations are not unique to industrialized nations, with developing nations also experiencing stiffening environmental regulations that impact downstream investment plans of petroleum companies.
  • The survey focuses on accounting and financial reporting practices in the US oil and gas industry, providing insights into industry trends and challenges.

Statistics:

  • 97% of the companies surveyed disclosed information about derivatives use.
  • The survey is based on data from annual reports and Form 10-Ks for the 1994 fiscal year.
  • Most companies discussed anticipated cost reductions through restructuring and reorganization of jobs and non-core businesses (73%), application of advanced technology (62%), and outsourcing of certain functions (58%).

Sources:

  • PRNewswire, "Survey Released By Price Waterhouse World Petroleum Group Provides Tool for Benchmarking Accounting Practices" (1995)
  • The "1995 Price Waterhouse Petroleum Industry Review: A Survey of Significant Accounting Practices By Leading U.S. Oil and Gas Companies" (Price Waterhouse World Petroleum Industry Group)