A tally by the Energy Information Administration shows U.S. proved reserves of oil, gas, and gas liquids declined in 1992 due to low oil and gas prices that reined drilling.
EIA said oil reserves were down 937 million bbl, or 3.8%, to 23.745 billion bbl, largely because low prices pushed oil well completions down 28% to 8,640, a 20 year low. The 3.8% drop was more than twice the average decline of 1.7%/year for the past decade.
While most areas had declines, two areas accounted for 73% of the U.S. decline. They were Texas (356 million bbl) and California (324 million bbl).
EIA said the 20 largest oil and gas producing companies in 1992 had 76% of U.S. proved reserves of crude oil.
The top 20 producing companies had a 6% decline in their U.S proved reserves of crude oil during 1992. The rest of the producers had a 3% increase.
BREAKOUTS
EIA said revisions and adjustments for crude reserves totaled 1.025 billion bbl, only 65% of the average of 1.574 billion bbl for the prior decade. This component of reserves change is usually the largest and has consistently helped sustain U.S. crude oil proved reserves.
Three areas had 71% of the positive net of revisions and adjustments: Alaska with 451 million bbl, the federal offshore with 147 million, and Texas with 125 million bbl.
California adjustments were a negative 45 million bbl, the largest percentage drop in proved reserves, due to a depressed heavy oil recover and a rapid decline in offshore reserves.
Total discoveries of crude oil were 484 million bbl in 1992, down from 1991 and 38% lower than the 783 million bbl average during the previous 10 years. Texas, Alaska, and the Gulf of Mexico federal offshore accounted for 74% of total discoveries.
For the last 7 years, total discoveries have been relatively low, reflecting a similar trend in exploratory drilling that followed the crude oil price collapse of 1986. In 1985 there were more than four times as many successful exploration, oil wells drilled as in 1992. However, total discoveries added per exploration" well have roughly doubled, moderating the effect of the drop in drilling.
Proved reserves added by extensions (391 million bbl) were up from 1991 but well below the prior 10 year average of 533 million bbl.
Horizontal drilling in the Austin chalk-formation was the major factor behind the 118 million bbl of extensions in Texas, which accounted for 30% of U.S. crude oil extensions.
New field discoveries of crude oil have been depressed since 1985 and were "an exceptionally low" 8 million bbl in 1992. The prior 10 year average for new field discoveries was 15 times as high.
EIA said, "New discoveries, the Sunfish prospect in the Cook Inlet of Alaska and the Kuvlum prospect 15 miles offshore from the Arctic National Wildlife Refuge, that are still being evaluated and are not vet proved, may turn this trend around in 1993."
Proved reserves of new reservoirs in old fields were 85 million bbl, down from 1991 and well below the 135 million bbl average for the prior 10 years. There were proved reserves of 2.638 billion bbl of crude oil in nonproducing reservoirs. EIA said they are included in the total proved reserves figures and represent 11% of the total.
Indicated additional crude reserves were 3.782 billion bbl, down 11% from 1991. "These reserves are crude oil volumes that may become economically recoverable from known reservoirs through application of improved recover techniques using current technology," the agency said. "The presence of large indicated additional reserves in the Alaskan North Slope, California, West Texas, and New Mexico implies that significant upward revisions to crude oil proved reserves could occur in the future."
GAS AND GAS LIQUIDS
EIA said the scheduled end of tax credits for new unconventional gas wells last December spurred drilling for coalbed methane and tight gas to high levels in the last half of 1992.
Gas completions dropped only 16% to 7,640, but exploratory gas well completions reached a new 20 year low after dropping 27% during 1992.
Proved reserves of dry natural gas declined a little more than 1% or 2.047 tcf in 1992. All four leading gas producing areas-Texas, the Gulf of Mexico, Oklahoma, and Louisiana-had large proved reserves declines totaling 4.649 tcf.
Partially offsetting those declines were large increases in coalbed methane reserves totaling 1.957 tcf in Virginia, New Mexico, Colorado, and Alabama.
Coalbed methane reserves increased 23% to 10.034 tcf to account for 6% of total U.S. gas reserves. Coalbed methane production increased almost sixfold in 3 years to account for 3% of U.S. gas production.
Exploitation of the coalbed methane resource has rapidly expanded because of a large tax credit incentive and improved understanding of the underlying production technology. The tax credit in 1992 was about 90 cts/Mcf, about half of the average U.S. wellhead price.
Total gas discoveries in 1992 were 7.048 tcf, down from 1991 and 34% lower than the average during the prior 10 years. More than half of them were in Texas and the Gulf of Mexico federal offshore.
New field discoveries were 649 bcd, down substantially from the 1991 level and 59% lower than the average of 1.592 tcf during the previous 10 years. Extensions were 4.675 tcf, 31% less than the prior 10 year average. Gas reserve additions from new reservoirs increased slightly to 1.724 bcf, but were well below the average of the prior decade.
EIA said the net of revisions and adjustments for natural gas in 1992 was 8.328 tcf.
In recent years, the net of revisions and adjustments played a growing role in sustaining Lower 48 states natural gas proved reserves. In 1992, 7.883 tcf of these were added, 74% more than the Lower 48 states average for the past 10 years.
"This increasing recovery of gas from the resource base of old fields is enhanced by application of new technologies like 3D seismology, horizontal drilling, and better fracturing treatments and well completions, " EIA said.
Total discoveries for the Lower 48 states were only 6.994 tcf in 1992, the second time since 1977 they were lower than the net of revisions and adjustments.
There were proved reserves of 34.118 tcf of natural gas, wet after lease separation, in nonproducing reservoirs. They were included in the total proved reserves data and represent 20% of the total.
EIA said U.S. natural gas liquids proved reserves, the sum of natural gas plant liquids and lease condensate reserves, dropped slightly to 7.451 billion bbl in 1992.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
