Shale Daily / NGI All News Access

Fracking Lifted U.S. Oil and Gas Proved Reserves in 2011

U.S. oil and natural gas exploration and production companies added 31.2 Tcf of wet natural gas proved reserves and almost 3.8 billion bbl of crude oil and lease condensate proved reserves in 2011, the Energy Information Administration (EIA) said in a report issued Thursday.

While the increase in wet natural gas proved reserves was less than the 2010 increase of 33.8 Tcf, proved reserves of wet gas still reached a new record high of 348.8 Tcf, and it was only the second year since 1977 that natural gas net reserves additions surpassed 30 Tcf, EIA said. It was also the greatest volume increase of domestic crude oil and lease condensate proved reserves since EIA began publishing proved reserves estimates in 1977.

"Horizontal drilling and hydraulic fracturing [fracking] in shale and other 'tight' (very low permeability) formations continued to drive record increases in proved oil and lease condensate and natural gas reserves in 2011," EIA said.

"Proved reserves of oil and lease condensate also increased in 2011 with higher crude oil prices, both to justify more drilling or development and to adjust forecasts of future production at the higher price levels. Lower natural gas prices had a dampening effect on natural gas proved reserves."

Proved wet gas reserves increased in each of the five largest natural gas producing states (Texas, Wyoming, Louisiana, Oklahoma and Pennsylvania), led by a 90% increase in Pennsylvania compared with 2010, EIA said. Pennsylvania contributed 41% of the overall U.S. increase.

Proved reserves of crude oil and lease condensate increased in each of the five largest crude oil and lease condensate areas (Texas, the Gulf of Mexico federal offshore, Alaska, California and North Dakota), EIA said. Texas had the largest increase by margin, about 1.8 billion bbl, resulting mostly from development in the Permian and Western Gulf basins.

Domestic natural gas proved reserves began growing sharply in the mid-2000s as operators adopted expanded horizontal drilling programs and applied fracking techniques in shale formations, the agency said. "Starting with 2009, similar horizontal drilling programs were applied in several of the nation's tight oil formations -- reserves additions from tight oil plays have reversed the long-term trend of generally declining proved U.S. oil and lease condensate reserves."

In an assessment issued last month, EIA said estimated global shale gas and shale oil resources represent 32% of the world's natural gas and 10% of the world's crude oil technically recoverable resources (see Shale Daily, June 11). The 7,299 Tcf of technically recoverable shale gas calculated by EIA was a 10% increase over its previous estimate made in 2011 (see Shale Daily, April 7, 2011). The assessment also indicated 345 billion bbl of technically recoverable world shale oil resources. EIA's 2011 report did not include estimates for shale oil. Technically recoverable resources are those that can be produced using current technology but without reference to price.

The assessment estimated shale gas and shale oil resources in the United States and in 137 shale formations in 41 other countries. The research found 1,118 Tcf of risked technically recoverable shale gas resources in North America.

Worldwide production of shale oil has the potential to reach 14 million b/d by 2035, about 12% of the world's total oil supply, prompting a 25-40% decline in oil prices, according to a report issued earlier this year by PwC (see Shale Daily, Feb. 15).

Comments powered by Disqus