Oil & Gas giants going bankrupt after "proven" reserves start vanishing

NEW YORK (News Desk) - During the first six months of 2016, as many as 59 American oil and gas companies have erased about 9.2 billion barrels of resources from their records as their reserves have suddenly started disappearing off their account books.

According to Bloomberg, Ultra Petroleum Corporation is also one of these top companies. In 2012, the company's worth stood at $15 billion, however in April this year, Ultra filed for bankruptcy owing  $3.9 billion, after key untapped gas and oil wells were removed from books.

Economic observers believe that the corporation's surprising rise and fall is linked with a 2009 decision of Securities and Exchange Commission (SEC) and the falling prices of oil and gas. In 2009, the SEC had allowed the companies to claim reserves as part of its stock value, even if these wouldn’t be drilled for years.

However, in addition to this relaxation, the SEC also asked companies to start drilling the wells within five years and follow regular schedules as well.

Due to these conditions, companies like Ultra Petroleum Corporation started deleting their undeveloped reserves, citing uncertainty of finances by the end of 2015, after the SEC questioned them about their drilling plans.

The companies responded to such questions saying "plans have been changed due to falling prices and non-availability of financing."

The experts draw a conclusion that these vanishing oil and gas reserves may once again start reappearing, as soon as the prices start rising.