U.S. RESERVES

Oil up as gas reserves leap

U.S. proved crude oil reserves rose by 280 million bbl in 2000 – a 1.3% increase from the prior year. New reserves replaced 115% of the 1.88 billion bbl of crude produced. Proved dry gas reserves soared 6%, easily the largest increase on record. New gas reserves replaced 152% of production. Gas reserves have increased in six of the last seven years.

Crude. The largest component of reserves increase was due to exploration drilling, which added 1,291 million bbl in 2000, and 60% of these discoveries were field extensions. Overall, new discoveries added 78% more reserves than in 1999 and 72% more than the prior-decade average. Of course, reserves are also based on economically recoverable crude; thus, a 71% increase from 1999 in the average price, to $26.72/bbl, played a role as well.

It is interesting that although oil completions of all types were up 14% from 1999’s abysmal level, they were still below 1998’s level. However, much more oil was discovered in 2000 per exploratory well than in 1999, mostly due to larger discoveries in less-explored areas of the deepwater Gulf of Mexico and Alaska North Slope.

This is the first year that the tables have included Net, sales+acquisitions reserves volumes. While both of these were large (about 5.3 billion bbl), when combined, they netted only – 20 million bbl. Theoretically, these should net zero, but when assets change ownership, so does the method of calculating reserves.

Natural gas. Total discoveries of proved dry gas reserves were 19.14 Tcf in 2000 – 77% more than in 1999 and 75% more than the prior 10-year average. Price was the major factor, affecting both E&P activity and economic recovery factors. Wellhead prices were 66% more than in 1999, and soared from an average of $3.60 during 2000, to a year-end average of $6.35. Most reserves increases occurred in Texas, Colorado, New Mexico, Utah and Wyoming. Reserve calculations somehow favored buyers of assets, since the net of sold and acquired reserves favored buyers by 4 Tcf, or 20% of the roughly 20.4 Tcf sold. New field discoveries improved 27% in 2000, while field extensions were double those in 1999 as well as the prior 10-year average. Exploratory gas well completions rose 34%, as development gas-well drilling shot up 45%.

Coalbed methane reserves and production continued their healthy growth rates; reserves were 9% and production 7% of U.S. totals in 2000. U.S. gas production rose only 1%, to 19.22 Tcf annually.

	Estimated U.S. crude oil proved reserves, 2000 vs. 1999, million bbl
	Estimated U.S. dry gas reserves, 2000 vs. 1999, Bcf at 14.73 psia and 60°F