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EIA: Proved Gas Reserves Rise 2% in 2004; Reserve Additions Replace 118% of Production

Total U.S. proved natural gas reserves rose 2% (or 3,469 Bcf) to 192,513 Bcf last year despite a 15% drop in Gulf of Mexico proved reserves, the Energy Information Administration (EIA) reported last week in an advance summary of its 2004 annual report on U.S. Crude Oil, Natural Gas and Natural Gas Liquids Reserves, which will be released next month. The agency determined that U.S. reserve additions last year replaced 118% of 2004 dry gas production.

Increased onshore drilling pushed reserves higher, but discoveries of new gas fields were the lowest in 12 years, EIA said. The low number of new field discoveries was primarily responsible for the sharp drop in proved reserves in the Gulf. Hurricane Ivan certainly didn't help, the agency noted. And this year's much more active hurricane season should further accelerate that trend.

Despite the decline in new field discoveries, however, extensions of existing gas fields helped push total gas discoveries in 2004 up 5% to 20,163 Bcf compared to 2003 levels and up 32% compared to the 10-year average, EIA said.

"There were almost 2 Tcf more reserves from extensions than in 2003 with Texas and Wyoming leading the nation. Field extensions were 18,198 Bcf, 11% more than extensions in 2003 and 66% more than the prior 10-year average..."

Meanwhile, new field discoveries totaled 759 Bcf, down 38% from 2003 and 59% less than the 10-year average. New reservoir discoveries in old fields were down 25% to 1,206 Bcf from 2003 levels and down 50% from the 10-year average.

EIA also said proved reserves of crude oil fell 2.4% to 21,371 million bbl, and proved reserves of natural gas liquids rose 6.3% in 2004 to 7,928 million bbl.

EIA defines proved reserves as estimated quantities of hydrocarbons that geological data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. For more from the summary, go to http://www.eia.doe.gov/.

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