Producers spend a great deal of effort reducing risk in their exploration, drilling and operations. Equal focus should be put on reducing the risk associated with reporting reserves. Although discussed, regulatory changes are not imminent. Still, the authors of this article describe four steps that producers can take within the current regulatory environment that will reduce the risk in reserves reporting.

Define: Define and record clearly how the rules will be interpreted and applied to the company. The Securities and Exchange Commission regularly issues guidance and interpretations of standards—pay attention to them. Companies that opt for conservatism and apply the rules in a consistent manner have taken a major step.

Assign: Forming dedicated teams that use a consistent, centralized process is important. Beware of the conflict of interest if compensation/bonuses of those making estimates is tied to reserves growth/replacement. Review by another party is essential and the qualifications and independence of the reviewer, usually external consultants, are critical.

Train: There are no statutory requirements. As a minimum, companies should require formal education in the appropriate technical field, a minimum level of experience, and a certain amount of training specific to reserves evaluation. There would be advantages if an industry-wide certification program existed.

Document: Keep a record of how estimates were produced and back it up with paper and electronic copies. This not only allows current staff to track their work, but it is invaluable if there is employee turnover and someone new must determine the past basis for reserve estimates. Document how tasks are accomplished, it could provide ideas on how better to accomplish them.

Excerpted from "Improved Process Can Cut Risk in Reserves Reporting," Oil & Gas Journal, Oct. 22, 2007, pp. 20-22.

Operators in the Rockies area are being proactive in reducing the environmental impact of drilling and operations, and state government and the public are noticing and commending them for their actions. In August the Colorado Oil and Gas Conservation Commission gave several "Outstanding Operations" awards, including awards to:

• Williams Production (for completing a 3,200-foot tunnel and private road that reduced the drive to private leases northeast of Parachute by 83 miles)

• Williams Production (for conducting a hydrogeologic survey in the Rulison/Holmes area after residents raised concerns about water quality and quantity)

• Williams Production (for building a central hydraulic fracturing facility in its north Rulison Field, which eliminates more than 90 water truck trips per day to individual fracturing sites)

• Encana (for incorporating practices aimed at protecting plants, animals and habitat as it installed a 36-in gas pipeline from Parachute to Meeker, which included adding two miles of length to go around sensitive sage grouse habitat)

• Encana (for contributing $60,000 to a weed control program in Rio Blanco County)

• Encana and Shell Frontier O&G (for allowing continued public hunting access on thousands of acres of privately owned lands in the Piceance Creek/Roan Plateau area after no longer being required to do so) Other articles on

this page outline the gas potential of the Rockies.

This article commends operators who are going the extra mile as they go about accessing that gas potential.

Excerpted from "Williams, Encana Shine As COGCC Honors Gas Firms," an article in the Glenwood Springs, CO. Post Independent online at www.postindependent.
com/article/20070919/VALLEY
NEWS/109190053.

A recently published series of articles (Oil & Gas Journal) by various authors with Advanced Resources International Inc. Taken together, the articles provide a good picture of where unconventional gas has come from, its present and what the future might hold.

"Reserves, Production Grew Greatly During Last Decade," Sep. 3, 2007, pp. 35-39.
"Resource Potential Estimates Likely to Change," Sep. 17, 2007, pp. 64-ff.
"New Plays, Prospects, Resources Continue to Emerge," Sep 24, 2007, pp. 48-54.
"Technology, Efficiencies Keys to Resource Expansion," Oct. 1, 2007, pp. 46-51.
"Rising Drilling, Stimulation Costs Pressure Economics," Oct. 15, 2007, pp. 45-51.
"Outlook Sees Resource Growth During Next Decade," Nov. 19, 2007, pp. 47-53.

Every two years, the Potential Gas Committee (www.mines.edu/
research/pga/) reports its estimate of U.S. gas resources. Their latest analysis reflecting estimates as of Dec. 31, 2006 shows an overall 16.6% increase versus 2004 estimates. Shale gas plays were responsible for most of the growth, which was the largest volumetric and percentage growth in PGC's estimates since 1968.