AGA: U.S. GAS RESERVE ADDITIONAL LAG PRODUCTION

May 4, 1992
The American Gas Association estimates 1991 U.S. natural gas reserve additions were only 65-79% of production, compared with a 96% average for 1981-90. Michael Baly, AGA president, said, "This reduction in natural gas 'on the shelf' inventory is a natural response in an industry with surplus deliverability. "This is not a scenario for short term deliverability problems. "Increases in storage, pipeline construction, and greater flexibility throughout the industry will ensure stable,

The American Gas Association estimates 1991 U.S. natural gas reserve additions were only 65-79% of production, compared with a 96% average for 1981-90.

Michael Baly, AGA president, said, "This reduction in natural gas 'on the shelf' inventory is a natural response in an industry with surplus deliverability.

"This is not a scenario for short term deliverability problems.

"Increases in storage, pipeline construction, and greater flexibility throughout the industry will ensure stable, reliable gas service.

"The natural gas industry is operating in a less regulated environment, has a huge resource base, and is well positioned to significantly increase demand."

Baly said fewer well completions in 1991 reined reserve additions.

"Lower levels of exploration and drilling, seismic activity, field prices, and continued supply surpluses are all indicative of current challenges to producers.

"For example, annual rig activity dropped nearly 15% from 1,010 rigs in 1990 to 863 rigs operating in 1991. As a result, gas well completions were down from 9,970 in 1990 to 8,620 in 1991-almost a 14% decline."

AGA found that 75% of 1991 reserve additions occurred as discoveries and field extensions, and only 25% came from revisions of estimates. Total reserve additions may range from 11.1 tcf to 13.4 tcf.

The 30 largest gas reserves holders sold more than 1.1 tcf of reserves to other firms.

The top 30 companies had reserve additions of 5.754 tcf, down 3.541 tcf from a year earlier. Total gas reserves held by the top 30 dropped by 3.757 tcf.

The 30 companies produced 8.417 tcf in 1991, compared with 8.352 tcf in 1989.

AGA compiles the reserve addition estimates from data the 30 largest gas companies file with the Securities and Exchange Commission, supplemented with data from gas pipelines holding large reserves.

Pipelines reported reserve additions of 1.138 tcf in 1991, compared with 1.469 tcf in 1990.

Their production was 1.451 tcf vs. 1.325 tcf in 1989. The pipelines found 1.145 tcf of gas.

Copyright 1992 Oil & Gas Journal. All Rights Reserved.