Reserve growth important to U.S. gas supply

James W. Schmoker
U.S. Geological Survey
Denver
Emil D. Attanasi
U.S. Geological Survey
Reston, Va.

Experience shows that initial estimates of the size of newly discovered oil or gas fields are usually too low. As years pass, successive estimates of the ultimate recovery of fields tend to increase.

The term "reserve growth" refers to the typical increases in estimated ultimate recovery that occur as oil or gas fields are developed and produced.^1-2

An example for a particular field helps explain the nature of reserve growth. Fig. 1 [12017 bytes] shows ultimate recovery for a large natural gas field in Texas as estimated in each year from 1977 through 1991. This gas field was discovered in the mid-1940s. In 1977, its ultimate recovery was estimated to be 2.1 tcf of gas.

One might think that after some 30 years of development and production, the resource potential of a field would be well understood. However, by 1991 the estimated ultimate recovery of this field had increased to 3.1 tcf. Reserve growth over the 15 year period totaled 1 tcf, and it shows no sign of stopping.

Reserve growth trends

Increases of estimated ultimate recovery over time such as shown in Fig. 1 are typical of many U.S. gas fields.

From 1978-93, reserve growth of natural gas in existing U.S. fields totaled 205 tcf, whereas initial size estimates of new field discoveries totaled only 31 tcf (Fig. 2 [16433 bytes]).

U.S. natural gas production during the same period totaled 277 tcf.

From 1989-93, reserve growth contributed about 15 tcf/year to U.S. proved gas reserves, whereas new field discoveries added only about 1 tcf/year (Fig. 2). In recent years, reserve growth has contributed far more to U.S. proved gas reserves than new field discoveries.

Reserve growth roots

Factors that contribute to reserve growth include:

Physical expansion of fields by areal extensions and development of new producing intervals;
Improved recovery resulting from application of new technology and engineering methods, and
Upward revisions of reserve calculations based on production experience and changing relations between price and cost.

The causative factors that contribute to reserve growth are complex and interrelated and have thus far resisted individual analysis. Estimates of the future reserve growth of a set of fields are at present usually based on empirical projections of past reserve growth patterns.

Future reserve growth

The USGS 1995 National Assessment of U.S. oil and gas resources³ was a scientifically based, unbiased analysis.

In this assessment, the USGS estimated that 1,074 tcf of technically recoverable natural gas remains in the U.S. (exclusive of federal waters), of which 322 tcf (30%) is in the category of reserve growth of existing fields (Fig. 3 [17641 bytes]). By comparison, the ultimate technically recoverable volume of gas in conventional fields not yet discovered is estimated to be 259 tcf (Fig. 3).

The categories shown in the figure are:

Undiscovered-undiscovered conventional fields with growth of initial size estimates built in.
Growth-reserve growth in existing fields.
Unconventional-undeveloped portions of unconventional accumulations such as coalbed gas, basin-center gas, and gas in shales; and
Proved-proved reserves.

Placing economic constraints upon the assessment of technically recoverable resources significantly changes estimates of remaining natural gas.

For an example, based on a wellhead price of $2.50/Mcf coupled with reserve growth projections only to the year 2015, the estimated total remaining U.S. gas resource drops from 1,074 tcf (Fig. 3) to 404 tcf (Fig. 4 [16803 bytes]). The percentage attributed to reserve growth of existing fields increases to 35% from 30%.

The reserve growth of gas remains extremely important to the U.S. energy future if one narrows the assessment scope from technically recoverable to economically recoverable gas resources (Fig. 4).

Summary, conclusions

Reserve growth is a major component-perhaps the major component-of remaining U.S. natural gas resources.

Historical data (Figs. 1, 2) support this premise, as do estimates of technically recoverable and of economically recoverable gas resources remaining in the U.S. (Figs. 3, 4).

Yet as Attanasi and Root2 emphasized when they referred to "the enigma of oil and gas field growth," reserve growth is poorly understood.

Projections of future reserve growth in the U.S. carry large uncertainty.

Much work remains to be done on the phenomenon of reserve growth, which is arguably the most significant research problem in the field of hydrocarbon resource assessment.

References

1. Arrington, J.R., Predicting the size of crude reserves is key to evaluating exploration programs, OGJ, Feb. 19, 1960, pp. 130-134.

2. Attanasi, E.D., and Root, D.H., The enigma of oil and gas field growth, AAPG Bull., Vol. 78, No. 3, 1994, pp. 321-332.

3. Gautier, D.L., Dolton, G.L., Takahashi, K.I., and Varnes, K.L., eds., National Assessment of United States oil and gas resources-Results, methodology, and supporting data, U.S. Geological Survey Digital Data Series DDS-30, 1995.

Bibliography

American Gas Association, 1994 Gas Facts, 1993 data, Policy Analysis and International Affairs Group, AGA, 1515 Wilson Blvd., Arlington, Va. 22209, 206 p.

Attanasi, E.D., Gautier, D.L., and Root, D.H., Economics and undiscovered conventional oil and gas accumulations in the 1995 National Assessment of U.S. oil and gas resources, USGS Open-File Report 95-75H, 1995, 50 p.

Attanasi, E.D., and Rice, D.D., Economics and coalbed gas in the 1995 National Assessment of U.S. oil and gas resources, USGS Open-File Report 95-75A, 1995, 22 p.

Attanasi, E.D., Schmoker, J.W., and Quinn, J.C., Economics and continuous-type oil and gas accumulations in the 1995 National Assessment of U.S. oil and gas resources, USGS Open-File Report 95-75F, 1995, 35 p.

U.S. Geological Survey National Oil and Gas Resource Assessment Team, 1995 National Assessment of United States oil and gas resources, USGS Circular 1118, 1995, 20 p.