HOUSTON — U.S. proven reserves of crude oil and condensate increased for a fifth consecutive year in 2013 and hit their highest level since 1975, according to a new report U.S. Energy Information Administration.
Proven reserves are resources that companies believe are reachable and make economic sense to produce. Estimates change from year to year as companies discover more oil and gas, remove existing reserves from the ground, make use of new technologies and change production levels in response to market prices.
The EIA report shows reserves based on an average, year-long price for oil of $97.28 per barrel in 2013. Since then, the oil price has fallen significantly. Low prices will likely lead producers to revise downward the amount of oil they believe will be make financial sense to pull from the ground — though improved drilling efficiency will offset some of the shrinking reserve estimates.
In 2013, however, the news was good for both crude oil and natural gas.
U.S. crude oil and condensate proven reserves rose by 3.1 billion barrels. During the year, producers pumped about 2.73 billion barrels from the ground while adding 5.84 billion new barrels to proven reserves.
Most new proven reserves, about 5 billion barrels, came from extensions to existing oilfields. Extensions are tallied when a producer updates reserves estimates as new wells provide a deeper understanding of the geology of a formation. New field discoveries accounted for 190 million barrels and new reservoirs found in old oilfields accounted for 340 million barrels.
In terms of total discoveries, a statistic that includes extensions, new field discoveries and new reservoirs found in old fields, most of the oil found in 2013 was in Texas. The state’s producers found 2 billion barrels, while North Dakota added 1.6 billion barrels. Producers in the Gulf of Mexico found about 500 million barrels, mostly from discovering entirely new fields.
Not surprisingly, much of the new oil was found in unconventional plays that often require hydraulic fracturing to produce commercially. As of December 31, 2013, those plays accounted for about 28 percent of all U.S. crude oil and lease condensate proved reserves, according to the analysis.
On the natural gas side, reserves increased by 10 percent in 2013 to a new record high of 354 trillion cubic feet. During the year, 26.5 trillion cubic feet of natural gas was produced.
The largest 2013 increases in natural gas reserves were in Pennsylvania and West Virginia, with increase respectively of 13.5 trillion cubic feet and 8.3 trillion cubic feet, according to EIA data.
As with oil, the majority of new natural gas reserves came from extensions to existing fields. The EIA estimated that those discoveries accounted for 51.1 trillion cubic feet of new proven reserves, or about 96 percent of new discoveries.
Natural gas proven reserves may be affected positively in the future by rising prices for the gas. Since the EIA report was released, the benchmark spot price for natural gas set at the Henry Hub hasn’t seen the same slide as oil prices.
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