US operators reported a 19% reduction in proved reserves of crude oil and lease condensate in 2020 due to lower oil prices in the first year of the COVID-19 pandemic, according to the US Energy Information Administration (EIA).
Proved reserves totaled 38.2 billion bbl for the year, compared to 47.2 billion bbl a year earlier, the agency noted in a yearend report. Proved reserves of crude oil decreased 8.4 billion bbl in 2020, and proved reserves of lease condensate decreased by 560 million bbl.
Proved reserves in the report are operator estimates of volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
The decline in crude oil and lease condensate reserves in 2020 was largely due to lower crude oil prices: the average annual price of West Texas Intermediate (WTI) crude oil fell to $39/bbl in 2020 from $57/bbl in 2019. Lower crude oil prices caused many operators to revise estimates of proved reserves downward and scale back development plans for new wells. Higher crude oil prices in 2021 will likely lead to more reserves in 2021.
Operators in Texas typically report the most proved reserves of crude oil and lease condensate and did so in 2020, but they also experienced the largest drop in proved reserves in 2020. Production and downward revisions lowered the state’s annual total of proved crude oil and lease condensate reserves by 16%, to 16.7 billion bbl in 2020 from 19.8 billion bbl in 2019. Proved crude oil and lease condensate reserves also fell in North Dakota by 2.2 billion bbl and in the Federal Offshore Gulf of Mexico by 0.8 billion bbl.
According to the report, proved reserves of US natural gas decreased 4%, to 473.3 tcf at yearend 2020 from 495.4 tcf at yearend 2019. This decrease was the second consecutive annual decrease in proved reserves of natural gas in the US.
Producers in Alaska added a substantial new volume of proved natural gas reserves in 2020. The annual total of proved natural gas reserves in Alaska increased in 2020 by 27 tcf, quadrupling the state’s total to 36 tcf from 9 tcf.
Producers in Texas reported the largest decrease in proved reserves of natural gas in 2020 of 11 tcf. Pennsylvania saw the second-largest decrease of natural gas proved reserves of 9.6 tcf.
