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EIA Reports Record-High Additions of Gas Reserves in 2007

Due in part to the contributions of shale gas and coalbed methane (CBM) resources, the United States saw a record-high addition to dry natural gas proved reserves of 46.1 Tcf in 2007, more than double the 19.5 Tcf of natural gas that was actually produced during the year, according to a new report issued by the Energy Information Administration (EIA).

Total reserves were pegged at 237.7 Tcf at year-end 2007, 13% more than the prior year's proved gas reserves and the highest level in the 31 years that the EIA has published annual reserves data, the agency said. "The record additions mostly reflect the rapid development of unconventional gas resources made up of coalbed methane and those resources that use advanced technologies like horizontal drilling and hydraulic fracturing, including shales and tight, low-permeability formations."

For the first time in four years, the United States also reported more proved reserves additions of crude oil than it produced, 2 billion bbl, or 0.3 billion bbl more than production of 1.7 billion bbl, according to the agency. Year-end proved oil reserves in 2007 stood at 21.3 billion bbl, nearly 2% higher than year-end 2006.

Proved reserves are those resources that, based on engineering and geological data, have a reasonable certainty of being recovered in future years from known reservoirs under existing economic and operating conditions.

Proved gas reserves increased by 26.6 Tcf in 2007, making it the ninth consecutive year that domestic proved gas reserves have increased. But the hike in proved reserves in 2007, the latest year for which estimates are available, was more than twice that of any other year since the EIA began estimating reserves in 1977.

The additions in proved gas reserves came from two broad categories -- total discoveries and net revisions. Discoveries accounted for 63% of total proved gas reserves additions in 2007, the EIA said. Exploratory gas well completions in 2007 rose by 21% from the previous year, which led to 29 Tcf of total discoveries in 2007 -- 26% more than in 2006 and 59% more than the prior 10-year average. Net revisions accounted for 36% of total gas reserves additions (15.5 Tcf) in 2007, the agency noted.

Texas reported the largest gain in proved gas reserves in 2007, amounting to a 17% (10.3 Tcf) increase. This was primarily due to development of unconventional gas resources in North and East Texas from shale in the Barnett formation and from tight sands in the Cotton Valley formation, the EIA said. It noted that the Newark East field in the Barnett Shale play may soon become the largest gas field in the country.

Major gas reserves additions in the Rocky Mountain states included a 26% (6.2 Tcf) upswing in Wyoming, a 27% (4.7 Tcf) jump in Colorado and a 24% (1.2 Tcf) increase in Utah.

Shale gas proved reserves rose 50% in 2007 and now account for about 9% of U.S. total reserves. CBM reserves saw an 11.5% rise in 2007 and now account for 9% of U.S. reserves as well. The EIA noted that CBM production fell somewhat in 2007 to 1.754 Tcf from 1.758 Tcf in the prior year, but it said it still makes up about 9% of domestic gas production.

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