National Instrument 51 101 of the Canadian Securities Administrators effective
National Instrument 51- 101 of the Canadian Securities Administrators, effective September 30, 2003, lays down disclosure requirements for Canadian oil and gas firms. These requirements include:
· Proved reserve quantities, defined as reserves that can be estimated with a high degree of certainty (operationalized as at least 90% probability) to be recoverable
· Probable reserve quantities, defined as additional reserves such that there is at least a 50% probability that the amounts actually recovered will exceed the sum of estimated proved and probable reserves
· Future net revenues from proved reserves and changes therein, discounted at 10% and undiscounted, using
i. year- end prices and costs
ii. forecasted prices and costs
· Future net revenues from probable reserves, discounted at 5%, 10%, 15%, and 20%, and undiscounted, using forecasted prices and costs
In addition, reserves data must be verified by an independent qualified reserves evaluator or auditor and reviewed by the board of directors.

a. Evaluate the relevance of National Instrument 51- 101 disclosures in comparison to those of RRA.
In your answer, include consideration of whether or not discounting expected future receipts at various rates (rather than at 10% as per RRA) adds to relevance.
b. Evaluate the reliability of National Instrument 51- 101 disclosures in comparison to those of RRA.
c. In their National Instrument 51- 101 disclosures, firms include a disclaimer to the effect that estimated future net revenues contained in their disclosures do not necessarily represent the fair market value of the company’s reserves. They also claim that there is no assurance that the forecast price and cost assumptions contained in the disclosures will be attained, and that variances could be material. Give reasons why the companies give these disclaimers.

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