Most of the growth associated with proved reserves of oil and gas in the United States comes from higher estimates of recovery from existing fields, not from new discoveries. In fact, from 1977 through 1995, approximately 89 percent of the additions to U.S. proved reserves of crude oil and 74 percent of the additions to U.S. proved reserves of dry natural gas were due to this phenomenon, known as "reserves growth," or more accurately, "ultimate recovery appreciation (URA)."
Proved reserves of crude oil or natural gas are the estimated quantities that geological and engineering data demonstrate with reasonable certainty to be recoverable in the future from known reservoirs under existing economic and operating conditions at a particular time. Proved reserves estimates tend to be conservative, especially during the early years of a field's productive life when little is known about it. Estimates of ultimate recovery (current proved reserves plus production to date) tend to increase over time, driven primarily by improved geotechnical information, development of production technologies, and economic factors.
Despite knowledge of the drivers of URA, resource analysts have been handicapped by a lack of detailed serial data on estimated ultimate recovery and have had little success in accurately forecasting URA. As a result, reliable estimations of the size of the ultimate domestic inventory of oil and gas are unavailable, which is a critical impediment to energy-related decision-making by industry, individuals, and government. EIA and the U.S. Geological Survey are collaborating to develop a better understanding of processes that drive URA using EIA's recently developed Oil and Gas Integrated Field File (OGIFF), which provides annual estimated ultimate recovery data for more than 90 percent of the Nation's proved reserves from 1977 through 1995.
"The Intricate Puzzle of Oil and Gas 'Reserves Growth,'" which appeared in the July issues of EIA's Petroleum Supply Monthly and Natural Gas Monthly, explores factors affecting URA, reviews efforts to analyze and predict URA, and points to directions for future research.
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File last modified: September 29, 1997
URL: http://www.eia.doe.gov/emeu/plugs/plpuzl.html
