EIA: US proved oil and gas reserves increase for 4th consecutive year

By OGJ editors
HOUSTON, Oct. 28 -- US proved reserves of natural gas and crude oil have increased for the fourth consecutive year, the US Energy Information Administration noted in its annual reserves report.
EIA made that observation in releasing an advance summary of its 2002 report on US reserves of oil, gas, and natural gas liquids.
Oil and gas production declined last year, however, from the year before.

Gas reserves
US gas reserves increased 2% in 2002, to 187 tcf, vs. 2001.
Reserves additions were 118% of 2002 production, which posted a drop of 2%, to 19.4 tcf, from the year before.
Sharp production declines in the Gulf of Mexico were partially offset by large production increases in the Rockies.

In 2002, the Rocky Mountain states and Texas had large gas reserves additions. These additions highlight a continuing shift in US gas reserves and production from conventional natural gas fields to gas produced from tight sands, shales, and coalbeds.

Out of the top 20 natural gas fields last year, 11 were in the Rockies. Large reserves additions were recorded in Powder River basin coalbed methane fields and in Pinedale field (deep and tight sands) in Wyoming, and Wattenberg field (tight sands) and coalbed methane fields in Colorado.
In Texas, the prolific Barnett shale play of Newark East field, now the tenth largest US gas field, accounted for a big reserves jump on the year.

Coalbed methane reserves last year increased 5% from 2001 to 18.5 tcf, accounting for 10% of US dry gas proved reserves. Coalbed methane production increased 3%, to 1.6 tcf, from 2001 and accounted for 8% of US dry gas production.

Most US gas discoveries in 2002 were made as extensions of existing conventional and unconventional gas fields.

Oil reserves
US crude oil proved reserves increased 1% last year to 22.7 billion bbl.
Reserves additions were 112% of production at 1.875 billion bbl, which compares with output of 1.915 billion bbl in 2001.

The relative contribution by reserves revisions and adjustments to US crude oil reserves additions shows the dwindling contribution of exploration to US reserves growth.
Revisions and adjustments of 1.32 billion bbl accounted for 54% of total crude oil reserves additions in the US last year. Total discoveries—most of which were extensions—accounted for 492 million bbl in 2002. New field discoveries came in at a total of 300 million bbl.

And those discoveries are increasingly being made in the Gulf of Mexico federal offshore. Out of all new oil field discoveries reported in 2002, 97% were on Gulf of Mexico federal offshore leases.

Other EIA statistics point to a level of drilling activity in the US that was little moved by higher commodity prices. Even though the domestic first-purchase crude oil price was 3% higher at an average $22.51/bbl in 2002, exploratory and development completions plunged 38% from the year before.

And NGL reserves, while showing essentially no growth in 2002, accounted for 26% of US liquid hydrocarbon reserves at almost 8 billion bbl.

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