Senior Staff Writer
HOUSTON, June 25 -- US proved oil reserves for 40 exploration and production companies increased 2% during 2003-07, reported Ernst & Young in a benchmark study released in Houston.
Estimated proved oil reserves held flat in 2007 at 16.1 billion bbl, however, said Ernst & Young, which complied and analyzed annual reports filed with the US Securities & Exchange Commission.
Benchmark companies hold 74% of estimated total proved US oil reserves and 68% of gas reserves according to US Energy Information Administration statistics.
The benchmark study companies are representative of the nationwide E&P industry, Ernst & Young said. The study included integrated companies, independents, and large independents. Independents were classified as large if their 2007 worldwide ending reserves exceeded 100 billion boe.
Independents reported a 7% increase in oil reserves in 2007 compared with 2006, but this was offset by a 2% decline from the integrated companies. Ending oil reserves for the large independents held flat last year.
Oil production has held steady at 1.2 billion bbl/year since 2004. The study showed production of 1.3 billion bbl in 2003. Production figures include condensate and natural gas liquids.
Estimated proved natural gas reserves showed growth. Natural gas reserves for the benchmark companies increased 47% during 2003-07. The study showed those companies had 138.6 tcf of gas reserves in 2007 compared with 129.5 tcf in 2006. Gas production grew during 2007 to 10.2 tcf, up 7% from 2006 production levels.
E&D costs spiraling
Exploration costs increased to $12.8 billion in 2007, a 165% increase from costs reported in 2003. Development costs as of yearend 2007 had grown 180% from $18.4 billion in 2003, the study showed.
Revenues from oil and gas production were $141.5 billion in 2007, up 12% from 2006. But net income only increased 4% in 2007, primarily due to rising production costs and increases in depletion, depreciation, and amortization, Ernst & Young said.
US E&P results could differ greatly from other regions of the world, said Rob Jessen, global leader for Ernst & Young's oil & gas industry studies. The US benchmark companies account for 1% of worldwide oil reserves and 2% of worldwide gas reserves.
A global benchmark study for areas outside the US is being compiled and is expected to be released by Sept.1, Ernst & Young said.
The US segment of the report excludes government and privately owned companies, smaller public companies, and other public companies that had not filed annual reports with the SEC by Mar. 31.
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