Two themes carry the file in Securities and Exchange Commission (SEC) comment letters to energy companies. Reserves and management's discussion and analysis (MD&A) make up about 57% of substantive comments. Reserves come up at every company size.
Everything else flips with size. Small filers must prove they run as auditable public companies, and large filers must defend their judgment.
These SEC comment letter trends come from our report on 396 staff letters to 149 U.S.-listed energy filers. This post adds what the report page leaves out: the staff's own words. We checked every quote against the letter on EDGAR, the SEC's public filing system.
What do SEC comment letters to energy companies focus on?
Reserves and MD&A. Reserves drew 31% of substantive comments in energy 10-K and 10-Q letters dated June 2023 to June 2026. MD&A drew 26%, so two themes take more than half the file.
Six other themes split the remaining 43%. Non-GAAP measures took 13%, segment reporting 10% and internal control over financial reporting (ICFR) 8%.
Reserves is the theme only this industry gets. The staff reads the reserve tables Regulation S-K requires and the oil and gas supplement in the financial statements. Then it checks that the two agree.
MD&A is the theme every industry gets, with an energy twist. The staff wants the change in revenue split between commodity price and volume, in numbers rather than adjectives.
Get those two right and you've covered more than half of what the staff asks energy filers. The rest is a contest between six smaller themes, and your company's size decides which ones reach you.
Reserves: the question asked at every size
The staff asks four things about reserves. Do the numbers agree across the filing, and is every change explained by cause and amount? Will the undeveloped barrels be drilled within five years, and do you use the SEC's definitions?
Size doesn't change the questions. In Finrep's 2023 to 2026 energy sample, reserves appear in 30% of micro-cap letters and 30% of large-cap letters.
The letters also tell you who reads this part of your 10-K. Energy letters come from the Office of Energy & Transportation in the SEC's Division of Corporation Finance. Reserve letters name a staff "Petroleum Engineer" as the contact for "the engineering comments."
The reserve rules, in plain English
Six pieces of rule text sit behind the reserve comments we read. Here they are without the legal wrapping.
| Rule | What it says | What the staff asks |
|---|---|---|
| Regulation S-K, Items 1201 to 1208 | The oil and gas disclosure items: reserves, PUDs, production, drilling, wells, acreage | Is every required table there, and do they agree? |
| Regulation S-X, Rule 4-10(a) | The definitions: proved, probable, developed, undeveloped | Do you use the SEC's terms or someone else's? |
| Rule 4-10(a)(31)(ii) | The five-year rule for undrilled locations | Will you drill these on time? |
| Item 1203 | Explain PUD changes and PUDs held five years or more | What changed, by how much and why? |
| ASC 932 | The unaudited oil and gas supplement: reserve roll-forward and standardized measure | Does each line explain its own change? |
| Instruction to Item 1202 | No public estimates of resources other than reserves | Does an oil-in-place figure read like reserves? |
Subpart 1200 of Regulation S-K, Items 1201 to 1208, is the SEC's oil and gas disclosure package. Item 1201(a) says it applies when oil and gas producing activities are material to your business.
Item 1202 covers reserves and Item 1203 covers proved undeveloped reserves (PUDs). Items 1204 and 1208 cover production, prices, costs, wells and acreage.
Rule 4-10(a) of Regulation S-X holds the definitions. Proved reserves are quantities that can be "estimated with reasonable certainty to be economically producible."
ASC 932 (Extractive Activities, Oil and Gas) is the FASB topic behind the unaudited supplement to your financial statements. The staff reads two parts of it closely.
One is the reserve roll-forward, which walks the opening balance through revisions, extensions and discoveries, purchases, sales and production. The other is the standardized measure of discounted future net cash flows, the supplement's value for proved reserves.
The five-year rule for PUDs
The five-year rule is where most reserve trouble starts, and Rule 4-10(a)(31)(ii) sets the clock. Undrilled locations count as reserves only if an adopted plan schedules them "to be drilled within five years."
There's an escape hatch: "unless the specific circumstances, justify a longer time." Item 1203(d) then asks you to explain PUDs that stay undeveloped for five years or more.
Do the arithmetic and five years means converting about a fifth of your PUDs each year. The staff uses exactly that math, as Riley Exploration found out.
Four sizes, four letters
The report names companies at every tier. We pulled one reserve letter for each tier from EDGAR, read it in full and quote it below.
Micro-cap: Trio Petroleum (TPET), March 12, 2025
The staff's letter on Trio's 10-K for fiscal 2024 flagged its "billions of barrels of oil-in-place." It wanted the figure described as "an estimate for the entire Uinta Basin," apart from Trio's Asphalt Ridge project.
The letter cited the Instruction to Item 1202, which bars estimates of resources other than reserves from SEC filings. It also flagged reserves prepared under the Society of Petroleum Engineers' Petroleum Resource Management System (PRMS). Item 1201(c) points to the SEC's own.
The review closed on May 7, 2025. Read the staff letter to Trio Petroleum on EDGAR.
Small-cap: Riley Exploration Permian (REPX), September 11, 2024
Riley's PUD conversion for 2022 and 2023 was "substantially below the 20% rate implied by the 5 year rule." The staff asked for the development schedule behind each year-end PUD figure.
It wanted locations, volumes and capital spending for every year of the five-year plan, plus what was actually drilled. It also caught a gap between two parts of the same 10-K.
The financial statement note blamed 12.1 MMBoe (million barrels of oil equivalent) of downward revisions mainly on removed PUDs. The business section put PUD revisions at 5.7 MMBoe. The staff asked Riley to quantify each factor, citing ASC 932-235-50-5.
The review closed on October 30, 2024. Read the staff letter to Riley Exploration on EDGAR.
Mid-cap: Range Resources (RRC), December 11, 2024
Range disclosed 90.2 Bcfe (billion cubic feet equivalent) of PUDs that had been reported "for more than five years." The staff asked Range to explain the delay and name the circumstances that justify it.
It also saw a pattern across five years. PUDs pushed out of the plan averaged 12% of the opening balance each year, while additions averaged 15%.
So the staff asked whether each year's plan had been "adopted by management and approved by the board." The same letter asked Range to put a volume on its "negative pricing revisions." The review closed on January 6, 2025.
Read the staff letter to Range Resources on EDGAR.
Large-cap: Texas Pacific Land (TPL), September 19, 2025
TPL sits in the report's large-cap tier, and its letter opened with a basic request. "Please expand your filing to include a summary of your oil and gas reserves at fiscal year-end."
The staff noted TPL hadn't disclosed reserve estimates in an SEC filing before. It asked for the controls over reserve estimates and the qualifications of the person overseeing them. Both requests cite Item 1202(a)(7).
It caught a roll-forward with no negative price revision, in a year when TPL's realized price per Boe fell 6.4%. The review closed on November 21, 2025.
Read the staff letter to Texas Pacific Land on EDGAR.
Trio sits in the report's smallest tier and TPL in its largest, yet both letters cite Item 1202. On reserves, size buys no slack.
Two more reserve traps
Two smaller checks catch companies of every size. Matador Resources (MTDR), in the report's mid-cap tier, shows both in one letter.
Matador's extensions and discoveries line netted 53.8 MMBoe of new reserves against 7.4 MMBoe of PUDs dropped from its plan. The staff's December 14, 2023 letter said changes from a revised development plan "should be categorized as revisions."
The same letter asked Matador to say its standardized measure includes future plugging and abandonment costs. PEDEVCO (PED), a smaller producer we come back to below, got that question in 2025 under ASC 932-235-50-36.
Read the staff letter to Matador Resources on EDGAR. Both are cheap to fix before the staff asks.
How does SEC scrutiny change as energy companies grow?
Outside reserves, the review flips. Micro-caps get asked about controls, reverse mergers and going concern. Large caps get asked about MD&A, segments and non-GAAP measures.
The report sorts the 149 filers into four market-cap tiers. Here's what the staff focused on in each, with the letters we read.
| Tier | Market cap | Filers | The staff's focus | Letters we read |
|---|---|---|---|---|
| Micro-cap | Under $300M | 61 | Filing completeness, ICFR, reverse mergers, going concern, reserve terms | Trio Petroleum |
| Small-cap | $300M to $2B | 34 | PUD conversion, reserve roll-forwards, MD&A price and volume, non-GAAP cash measures | Riley Exploration |
| Mid-cap | $2B to $10B | 36 | Reserve revision classes, standardized measure, plugging costs, segment MD&A | Range Resources, NOV |
| Large-cap | Over $10B | 18 | MD&A known trends, segment expenses, non-GAAP prominence, ARO derecognition | ConocoPhillips, Chevron, Texas Pacific Land |
The clearest view of the flip is the same theme measured at both ends of the range.
| Theme | Micro-cap letters | Large-cap letters |
|---|---|---|
| Reserves | 30% | 30% |
| ICFR and certifications | 22% | 6% |
| Reverse-merger accounting (ASC 805) | 14% | 2% |
| MD&A known trends | 14% | 27% |
| Segment reporting (ASU 2023-07) | 3% | 24% |
| Non-GAAP prominence | 8% | 21% |
Share of each tier's letters raising the theme. Source: Finrep energy report, letters dated June 2023 to June 2026.
ICFR questions appear in 22% of micro-cap energy letters but 6% of large-cap letters, in Finrep's 2023 to 2026 sample. Segment reporting runs the other way, from 3% of micro-cap letters to 24% of large-cap letters.
Reserves is the only line that holds flat. Every other theme belongs to one end of the market.
Small filers: prove you run as an auditable public company
At the small end, the staff tests the basics. Can you close your books, report on time and stand behind your controls?
PEDEVCO, a Houston oil producer, shows what that looks like. Its 10-K cover put the market value of shares held by non-affiliates at about $23.8 million on June 30, 2024.
The staff's letter on its 2024 10-K, dated August 11, 2025, ran to 13 comments. PEDEVCO had restated 2022 and 2023 for overstated depletion expense and reported a material weakness in its tax provision.
The staff asked how the error hit each 2023 and 2024 quarter. Under Item 308(a)(3), it wanted "the nature and amount of the errors" and "the periods impacted."
It also asked "how and when the errors were identified" and what the remediation plan was. That list is worth copying into your own close checklist.
Reserves came up in the same letter. The staff computed PUD conversion of "approximately 0%, 6%, 7%, 5% and 0%" for 2024 back to 2020.
At year-end 2024, PEDEVCO's 14.3 MMBoe of PUDs were 79% of its total proved reserves. The staff asked how such low conversion squared with the five-year rule.
A second letter followed on September 12, and the review closed on September 17, 2025. Read the staff letter to PEDEVCO on EDGAR.
The report's micro-cap tier adds reverse-merger accounting under ASC 805 and going-concern doubts. It ties both to newly public and reverse-merged filers.
None of this is exotic accounting. It's the entry fee for being public, and the staff collects it early.
Large filers: defend your judgment
At the top, the questions are about the judgment behind the disclosure. The staff will also come back a second time when the first answer doesn't land.
ConocoPhillips (COP): MD&A, March to May 2024
On March 22, 2024 the staff challenged ConocoPhillips's MD&A for 2023. It singled out this explanation of revenue: "primarily due to lower realized commodity prices partially offset by higher sales volumes."
The staff cited Item 303(b) of Regulation S-K. It requires you to say how much of a revenue change came from prices and how much from volume.
ConocoPhillips pushed back. As the staff summarized its reply, the company argued that average prices and daily volumes already showed investors the drivers.
The staff wasn't persuaded, and its April 24 letter said so plainly.
ConocoPhillips's May 15 reply still said its MD&A complied with Item 303. After calls with the staff on May 6 and 8, it proposed to "enhance in future periodic filings" its presentation.
The staff closed the review on May 28, 2024. Read the first staff letter to ConocoPhillips and the company's May 15 reply.
Chevron (CVX): asset retirement obligations, July to November 2024
Asset retirement obligations (AROs) are the costs of abandoning and decommissioning a field at the end of its life. In the fourth quarter of 2023, Chevron booked an after-tax loss of $1.9 billion for such costs. They related to Gulf of Mexico assets it had sold years before.
The buyers had filed for Chapter 11, and part of the obligations came back to Chevron. The staff's July 24, 2024 letter asked why nothing was accrued before that quarter, citing ASC 410-20 and ASC 450-20.
The October 3 follow-up went further. It asked Chevron to "quantify the amounts derecognized for each of the sales."
Chevron's risk factor on returning liabilities had "remained unchanged from 2015 until the filing of your 2023 Form 10-K." The letter also asked why new MD&A language, added because of one buyer's bankruptcy, didn't mention that bankruptcy.
The review closed on November 21, 2024. Read the July staff letter and the October follow-up on EDGAR.
Neither letter said a number was wrong. Both said the explanation around the number fell short, and both went a second round.
Non-GAAP labels: the third front
Non-GAAP questions climb with size too, from 8% of micro-cap letters to 21% of large-cap letters. Two of the letters above show the kind of judgment the staff tests.
Range's December 2024 letter covered an earnings release with two revenue lines. "GAAP revenues and other income" were $615 million, and "Non-GAAP revenues" were $680 million. The staff asked how derivative fair value income and interest income counted as revenue.
TPL called its "Free Cash Flow" a performance measure. The staff replied that "the label suggests it may be a liquidity measure." It asked TPL to reconcile the figure to the most directly comparable GAAP measure.
Our non-GAAP comment letter trends post covers the rules in full. The label on a measure is a judgment call, and larger filers get asked to defend it.
SEC comment letter trends for energy in 2026: rising and fading
Segment reporting is rising fastest, reserve comments surged in 2025 and ICFR comments are easing. Income-tax disaggregation under ASU 2023-09 is the theme to watch next.
The segment questions come from ASU 2023-07. It makes companies disclose significant segment expenses regularly provided to their chief operating decision maker (CODM).
It started as a large-cap topic and is moving down the tiers into oilfield services. NOV (NOV), an equipment maker in the report's mid-cap tier, got one of those letters on its 2025 10-K.
The staff's March 18, 2026 letter asked which line items were the "significant expense categories and amounts" the CODM receives. It cited ASC 280-10-50-26A, and the review closed on April 2, 2026. Read the staff letter to NOV on EDGAR.
Reserve comments surged in 2025, as the staff pressed for revision detail and a complete standardized measure. ICFR comments slipped as more newly public and reverse-merger filers cleared their first reviews.
Climate is the theme that hasn't arrived. Greenhouse gas and climate comments are scarce in the sample and haven't become a lasting financial-statement theme for energy filers.
The report leaves 2026 out of its year-by-year ranking, because the publication lag holds down the most recent count. The median staff letter released in Q3 2026 was dated 217 days earlier, against 103 days a year before.
Three checks before your next 10-K
Start with the three checks that match the letters above. The full report has 14, each tagged by the company size where it matters most.
The other 11 checks cover AROs, segment expenses, non-GAAP measures, impairment, ICFR, services revenue and the new income-tax rules. The report also gives a 2026 outlook for each tier and a 12-letter comment log with tickers and standards.
It's free. Click the button below, enter your email on the report page and download the PDF.
How we counted
We counted SEC staff letters to U.S.-listed energy filers by letter date, June 2023 to June 2026. Only 10-K and 10-Q reviews count, and the data comes from EDGAR.
Staff letters are filed on EDGAR as form type UPLOAD, and company replies as CORRESP. The report started from 396 UPLOAD letters to 149 energy filers. It read and classified 114 substantive 10-K and 10-Q letters into eight themes.
Energy means six Standard Industrial Classification (SIC) codes. They cover exploration and production (1311), integrated energy (2911), drilling (1381) and oilfield services and equipment (1382, 1389 and 3533). Midstream pipelines, refiners, coal, uranium and all registration and offering reviews are out.
Themes were tagged by keyword and confirmed against letters read in full. Tiers follow market cap: under $300M, $300M to $2B, $2B to $10B and over $10B.
Counting by letter date has one blind spot. Letters reach EDGAR months after they're written, so the most recent months always look thin.
Counted by release date instead, the slowdown shows. In Q3 2026 the SEC released 1,120 staff comment letters on EDGAR, down 51% from 2,278 a year earlier. That's our count of EDGAR's daily indexes as of October 14, 2026.
The nine companies quoted here are examples we chose to illustrate the report's findings, not a random sample. We opened each letter on EDGAR on October 15, 2026 and checked every quote against its text.
The SEC says these letters "set forth staff positions and do not constitute an official expression of the SEC's views." They still show, in writing, what the staff asks.
For the bigger picture, start with our guide to what SEC comment letters are and how to find them. Our seven-issue SEC comment letter trends post covers every industry.
If a letter has already landed, our SEC comment letter response playbook walks through the reply. To compare research tools, see our guide to SEC comment letter research software.
Frequently asked questions
What does the SEC ask oil and gas companies about reserves?
The staff asks whether reserve figures agree across the 10-K and whether each change is explained by cause and amount. It checks PUDs against the five-year rule and makes sure you use the SEC's definitions in Rule 4-10(a). Reserves drew 31% of substantive comments in Finrep's 2023 to 2026 energy sample, more than any other theme.
What is the five-year rule for proved undeveloped reserves?
The five-year rule sits in Rule 4-10(a)(31)(ii) of Regulation S-X. Undrilled locations count as proved undeveloped reserves only if an adopted plan schedules them "to be drilled within five years." A longer wait needs specific circumstances, and Item 1203(d) makes you explain PUDs left undeveloped that long.
Can an oil and gas company disclose oil in place in its 10-K?
Generally no: the Instruction to Item 1202 bars estimates of resources other than reserves from SEC filings. The exceptions are narrow, such as disclosure that foreign or state law requires. That's why the staff asked Trio Petroleum to tie its "billions of barrels of oil-in-place" to "the entire Uinta Basin."
How do SEC comment letters differ for small and large energy companies?
Micro-cap letters focus on ICFR, certifications, reverse-merger accounting, going concern and reserve terms. Large-cap letters focus on MD&A known trends, segment expenses, non-GAAP prominence and ARO derecognition. Reserves is the exception: it appears in 30% of letters at both ends of the range.
What does the SEC want in MD&A from oil and gas companies?
It wants revenue changes split between price and volume, in numbers. Item 303(b) asks how much of a revenue change came from price and how much from volume. In 2024 the staff reissued this comment to ConocoPhillips after the company argued its existing disclosure was enough.
Which energy comment letter topics are rising in 2026?
Segment reporting under ASU 2023-07 is rising fastest, moving from large caps into mid-caps and oilfield services. Income-tax disaggregation under ASU 2023-09 is the next theme to watch. ICFR comments are easing, and climate comments remain scarce in the sample.
How long does an SEC comment letter review take for an energy company?
In the nine energy reviews quoted here, first letter to completion letter took 15 to 120 days. NOV's segment review was the shortest, and Chevron's two-round ARO review was the longest. Each review we read needed one or two staff letters before it closed.
How did Finrep count the energy comment letters?
We counted staff letters on energy filers' 10-Ks and 10-Qs by letter date, June 2023 to June 2026. The set has 396 letters to 149 filers, and 114 substantive letters were read and classified by theme. Recent months are undercounted, because letters reach EDGAR months after they're written.
