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EIA: 2018 US proved reserves up from 2017
Annual reserves report shows 12% gain for crude oil, 9% gain for natural gas, setting new records; largest increases in Texas Kristen Nelson Petroleum News
The U.S. Energy Information Administration released its U.S. crude oil and natural gas proved reserves report for 2018 and said strong oil and gas prices drove increases in proved reserves in the U.S. to record levels last year.
“The United States increased its proved reserves of oil and natural gas, establishing new records in 2018 according to a recently released EIA report,” EIA Administrator Linda Capuano said in a Dec. 13 statement. “Crude oil and lease condensate increased by 12% from 2017, and natural gas climbed 9% during the same period,” Capuano said.
Proved reserves, the agency said, are the “estimated volumes of hydrocarbon resources that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions.”
Crude oil reserves Proved reserves of crude oil in the United states increased from 39.2 billion barrels at year-end 2017 to 43.8 billion barrels at year-end 2018, EIA said, a new record, topping the previous record set in 2017.
Combined crude oil and lease condensate reserves increased 12% to 47.1 billion barrels.
The 2018 annual average spot price for West Texas Intermediate crude oil at Cushing, Oklahoma, was up 29%, averaging $65.66, compared to $51.03 per barrel in 2017.
In Texas, which saw the largest year over year increase, 2.3 billion barrels of crude oil and lease condensate proved reserves were added, “the largest net increase of all states in 2018,” the result, EIA said, of increased prices and development of the Permian basin in West Texas.
New Mexico had the next largest gain in crude oil and lease condensate proved reserves, 750 million barrels, followed by North Dakota at 422 million barrels.
Natural gas Proved reserves of natural gas were up 9% from 464.3 trillion cubic feet at year end 2017 to 504.5 tcf at year end 2018, EIA said, another record, beating the previous record set in 2017.
The annual average spot price for natural gas at the Louisiana Henry Hub was up 12% from $2.99 per million British thermal units in 2017 to $3.35 per MMBtu in 2018.
Texas had the largest net increase, up 22.9 tcf of natural gas proved reserves, followed by Pennsylvania, up 14.2 tcf and New Mexico, up 4.2 tcf.
EIA said changes in reserves estimates are due to new discoveries, thorough appraisal of existing fields, production of existing reserves, changes in prices and costs and evolution of technologies.
The agency said the report is from “independently developed estimates of proved reserves from a sample of operators of U.S. oil and natural gas fields” which it surveys, then using the sample “to further estimate the non-reported portion of proved reserves.” EIA said it received responses from 416 of 426 sampled operators, “which provided coverage of 90% of oil and natural gas proved reserves at the national level.”
Texas leads EIA said U.S. natural gas and crude oil reserves experienced a steady decline from the late 1970s to 1996, with the downward trend for natural gas reversing in 1997 due to technology changes - horizontal drilling and hydraulic fracturing techniques.
The trend in crude oil reserves reversed in 2008 “when innovations in horizontal drilling and hydraulic fracturing were applied to tight oil-bearing formations, such as the Bakken Shale of the Williston Basin,” EIA said.
The upward trends reversed in 2015, when there were significant price drops for both oil and natural gas, then trended upwards again from 2016 to year-end 2018, as “prices and reserves trended upwards, annually,” the agency said.
U.S. proved reserves of crude oil and lease condensate increased in all top seven U.S. oil reserves states in 2018, EIA said.
Alaska ranks sixth Alaska, which ranks sixth among the top seven U.S. oil reserves states, saw increases in both 2017 and 2018, and with an increase of proved reserves of 405 million barrels, a 20% increase, giving it the fourth-largest net increase of crude oil.
The state also had a positive net revision to its reserves, which EIA said, “occur primarily when operators change their estimates of what they are able to economically produce using existing technology and current economic conditions.” Changes also occur when operators buy and sell properties, the agency said, and when adjustments are made to reconcile estimated volumes.
There was a net upward revision of U.S. crude oil and lease condensate reserves of 413 million barrels in 2018, with the largest net upward revisions of crude oil and lease condensate proved reserves in the Federal Offshore, 599 million barrels, and Alaska, 441 million barrels.
EIA data show Alaska with published proved reserves of 2.016 billion barrels at the end of 2017, increasing to 2.421 billion barrels at the end of 2018. The agency shows no lease condensate proved reserves for Alaska.
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