OUTLOOK 2004: United States
US Reserves

Gas and oil reserves creep up again

US proved crude oil reserves increased in 2002 a modest 1% – the fourth consecutive yearly increase. Reserves exceeded production by 12%. Proved dry natural gas reserves fared better, rising nearly 2% over the 2001 – 2002 period. As always, comparative data for 2003 will be ready next year, since it takes nearly a year for the US government to gather and analyze reserve data.

	Estimated US crude oil proved reserves, 2002 vs. 2001, million bbl
	Estimated US dry gas reserves, 2002 vs. 2001, Bcf at 14.73 psia and 60 ° F

Crude oil. In the category new field discoveries , 97% were in the Gulf of Mexico Federal Offshore. However, this was 15% less than the prior 10-year average. Total discoveries of all types, including field extensions and new reservoirs in old fields, were 7% less than the prior 10-year average and 63% less than 2001's. This is because 2001 was a banner year in activity that included the discovery of BP's Thunder Horse field. Of note, the Alaskan North Slope saw no significant discoveries. The recent 20% downward revision by Shell should have no effect on these US reserve figures.

The pen was mightier than the drillbit in 2002, with the net of revisions (+/-) and adjustments (1.36 billion bbl) adding more to reserves than did discoveries (54% vs. 46%). Also, about 800 million bbl changed hands via sales and acquisitions. In its usual enigmatic manner, 24 million more barrels were bought than were sold.

Natural Gas. The 1.9% year-to-year improvement in total proved gas reserves was the eighth increase in the past nine years (1994 – 2002). In the combined categories that comprise total discoveries (new fields, field extensions, new reservoirs in old fields), there was a 22% decrease from 2001, reflecting the strong drilling activity in 2001 and the effect of wellhead prices – $4.02/Mcf in 2001 vs. $2.95 in 2002. However, this was still 36% better than the prior 10-year average, which is due to continuing generally high gas prices.

New field discoveries mirrored those of oil, falling 63% since 2001, some 24% less than the prior 10-year average. Natural gas liquids are not shown in the accompanying charts, but they comprise a significant part of US liquids production (32%) and reserves (26%). In 2002, despite the rise in dry gas reserves, NGL reserves were flat. That was because coalbed methane, which generally has no NGLs, accounted for a large portion of new gas reserves.

Additions to reserves were 18% more than production. Unfortunately, this was partly because gas production was off 2% in 2002. The Gulf of Mexico fell the most, but was partially offset by large production increases in the Rocky Mountains and Texas, signifying a shift toward unconventional gas fields, i.e., tight sands, shales and coalbeds. Coalbed methane proved reserves grew 5% to 18.5 Tcf and accounted for 10% of US dry gas reserves and 8% of production in 2002.