UPDATE 2-US proved natural gas, crude oil reserves soar-EIA

Tue Nov 30, 2010 11:29pm GMT
 

 * Gas reserves rise most in U.S. history
 * Technology advances, not new fields, boost reserves
 * British giant BP remains top oil, gas reserve owner
 * Higher oil price in 2009 drives crude reserves
 * Natural gas reserves expand even as prices fell
 (Recasts, adds further details, graphic)
 By Selam Gebrekidan and Joshua Schneyer
 NEW YORK, Nov 30 (Reuters) - U.S. natural gas reserves
increased by the most in history last year, and crude reserves
also rose, as companies drilled frantically into shale rock
formations with new technology, the Energy Information
Administration said in an annual report on Tuesday.
 U.S. net proved natural gas reserves rose 11 percent, or
28.8 trillion cubic feet (tcf), in 2009 to total 284 tcf,
underscoring the dramatic impact that new gas pumped from shale
rock formations is having on world energy supply.
 Louisiana, whose statewide reserves grew quickest, saw its
economically viable gas reserves surge by 77 percent, or 9.2
tcf, led by developments in its Haynesville Shale.
 U.S. net proved crude oil reserves rose 9 percent, or 1.8
billion barrels, to 22.3 billion barrels in 2009. Texas saw its
proved oil volumes rise most, by 529 million barrels, or 11
percent.
 North Dakota, home of the oil-rich Bakken Shale formation,
saw its reserves jump by a whopping 83 percent, or 481 million
barrels.
 "These increases demonstrate the possibility of an
expanding role for domestic natural gas and crude oil in
meeting both current and projected U.S. energy demands," EIA
researchers said in their report.
 Proved reserves -- which now stand at the equivalent of 12
years of gas consumption and 3.3 years of oil demand --
represent energy supplies that are extensively charted out and
could be tapped under current market conditions. Total
recoverable reserves, however, can be far higher.
 The addition of 47.6 tcf in new proved gas reserves was the
sharpest on record and caps seven straight years of increases,
EIA said. It was led by gas from shale rock formations, such as
Haynesville, where advances in horizontal drilling and
hydraulic fracturing have unlocked vast new energy potential.
 As the cost of tapping gas fell, reserves were added even
though prices of U.S. natural gas futures fell sharply last
year, by an average of 32 percent, according to EIA's
calculations. Burgeoning supplies of the fuel contributed to
the price rout.
 The expansion in crude and liquids reserves came largely as
a function of a rise in U.S. oil prices over the course of
2009. Based on price levels at the beginning of each month, oil
futures averaged $61.08 a barrel last year, up 37 percent from
2008, EIA said. That rise prompted oil companies to shift more
oil reserves into the "proved" category, which is contingent on
viable economics for their production, EIA said.
 About 1,200 companies, including the largest domestic
operators, were included in the EIA proved reserves survey.
 The rise in proved crude reserves came after 2008 reserves
dipped by 10.3 percent, their largest drop in 32 years. Natural
gas proved reserves had risen 2.9 percent in 2008.
 SHALE BOOM
 Shale gas development in Arkansas, Texas, Oklahoma and
Pennsylvania supported the reserves increase. The Fayetville
and Marcellus shale plays in Arkansas and Pennsylvania,
respectively, nearly doubled their reserves in the reporting
period.
 Hydraulic fracturing technologies originally used to tap
gas but now increasingly used to tap crude and liquids from
shale plays helped boost crude oil reserves. All major oil
production regions saw reserves rise, including California,
Alaska and the Gulf of Mexico Federal Offshore area, EIA said.
 While the reserves boost is promising for U.S. energy
supplies, it has also helped push natgas futures down further
in 2010. They have fallen nearly 25 percent, by far the biggest
loser of 2010 on the Reuters-Jefferies CRB Index of 19
commodities.
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
   U.S Natural Gas Proved Reserves Graphic:
 link.reuters.com/ryw77q
 (YTD CRB Graphic: link.reuters.com/kew48n)
 Index of shale gas companies TRSHALEGAS    
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 On Tuesday, January natgas futures NGc1 slid 3 cents to
settle at $4.18 per million British thermal units.
 EIA's estimates of U.S. 2009 proved natural gas reserves
were 16 percent higher than the 244.7 trillion cubic feet BP
said are viably recoverable in the U.S. in the Statistical
Review of World Energy report it published last June.
 EIA's annual report also showed that British oil giant BP
Plc (BP.N: Quote) remained the largest reserve holder and proprietary
producer of both oil and gas in the United States last year.
 The company, whose Macondo offshore prospect was the site
of the biggest U.S. oil spill in history this year, owned 3.07
billion barrels of proved U.S. crude reserves and 15.2 trillion
cubic feet of proved natural gas at the end of 2009.
 Proved reserves are volumes of oil and natural gas that can
be recovered in the near future from known reservoirs with a
reasonable certainty using existing technology and under
current economic conditions.
 (Additional reporting by Eileen Moustakis; Editing by
Marguerita Choy and David Gregorio)                        

Market Update

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.7019
Euro USD =1.3481
Rand USD =0.0954