US gas reserve growth in 2013 was robust, AGA estimates

US natural gas producers added more than 35 tcf of reserves in 2013, the American Gas Association said in its latest annual preliminary estimate based on reported results by the 30 largest companies representing more than half of the total US production and reserves.

“In addition, negative revisions to existing reserves were modest,” AGA said, adding that with US production of about 24 tcf, the reserves inventory increased compared with that estimated for 2012 by the US Energy Information Administration.

AGA said it expects total US reserves at yearend 2013 may have been 330 tcf, or higher, which is slightly below the 334 tcf identified by EIA at yearend 2011—the most recent date on which complete figures are available.

“In essence, the companies added much more gas than they produced in 2013,” said Chris McGill, AGA’s vice-president for policy analysis. “Most of the reserve additions we see today are associated with unconventional resources, including the Marcellus and Eagle Ford shales.”

Improved prices over 2012’s $2.75/MMbtu range may be making dry gas plays more attractive, he told reporters during an Apr. 17 teleconference.

“At $100/bbl oil and $4.50/Mcf gas, oil on an MMbtu basis is priced higher,” McGill said. “On the other hand, we’re not talking about wellhead gas prices in the $2.75 range as we were in 2012. When you begin to talk about $4 sustained prices, more of the gas resource base is economically attractive.”

Mature unconventional gas plays continue to produce, he continued. “The Barnett shale produced 1 tcf in 2013 because lifting costs are very low,” McGill said. “The Haynesville shale is a different story because it’s dry gas that’s relatively deep. It’s more sensitive to market pricing. It’s also in a region where there’s growing liquids-associated gas supply from the Eagle Ford shale.”

He said, “That region of the country is looking for markets, and producers are interested in LNG exports, because of the Haynesville shale. It’s not just the price; it’s the demand relationship.”

AGA listed ExxonMobil Corp. as the largest US gas reserves holder, with more than 26 tcf, followed by Chesapeake Energy Corp., BP PLC, ConocoPhillips Co., and Anadarko Petroleum Corp. “In fact, ExxonMobil’s current reserves position is more than twice the second largest reserves holder,” it said.

Seven of the 10 largest US gas reserves holders are independent producers, while the remaining three are integrated multinationals, AGA added.

Contact Nick Snow at nicks@pennwell.com.

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