Despite predictions of waning gas supplies and worries over Gulfof Mexico production potential from some, several companies aretouting boom years for reserve replacement with some settingrecords. The strong reserve replacement came in a year when gasproduction is said to have seen only a modest increase of abouthalf a Bcf. Much of the good news for reserve replacement comesfrom oil and international operations, but domestic gas fared well,too, according to some company reports.
Conoco Tuesday said it grew proved oil and gas reserves moreduring 1997 than ever before. A total of 942 MMBoe was added duringthe year, which represents 450% of the oil and gas produced duringthe year. “We continue to reap the benefits of our refocusedupstream strategy,” said Archie W. Dunham, Conoco CEO. “Reservesare the lifeblood of our company that will carry us toward the goalof doubling the value of Conoco by 2003.”
Conoco’s 1997 year-end proved reserves increased to 2.65 billionBoe, up 731 million Boe, or 38%, from 1996. International provedreserves increased 56%, while U.S. reserves were up 8%. Domesticgas reserves increased 19% to 2.9 Tcf, primarily due to acquisitionof gas properties and recent drilling in the Lobo Trend in SouthTexas near Laredo. The 1997 reserve additions, plus futureadditions from the six-year drilling program underway in theregion, are expected to expand U.S. gas reserves by 1.8 Tcf, whichis 70% of the company’s 1996 U.S. gas proved reserves.
Texaco said it replaced 167% of its 1997 worldwide production ofoil and gas. Proved reserves, including equity reserves inaffiliates, increased 16% during 1997 and are at the highest levelsince the late 1980s. At year-end, Texaco had 4.3 Boe of net provedreserves consisting of 3.3 billion barrels of liquids and 6.2 Tcfof gas. “This is the strongest reserve replacement in over threedecades and is a milestone in our upstream operations,” said TexacoCEO Peter I. Bijur.
ARCO said it replaced 164% of its 1997 worldwide oil and gasproduction with new reserves, adding 600 million Boe. In 1996, ARCOreplaced 133% of its reserves. The 1997 additions gave ARCO totalreserves of 4.1 billion barrels at year-end.
Phillips Petroleum also replaced 164% of its 1997 worldwidehydrocarbon production. “This was a remarkable year for us inregard to reserve replacement,” said Knut Am, senior vice presidentof exploration and production. “Discoveries, extensions andimproved recovery are responsible for nearly two-thirds of theyear’s excellent performance. Additionally, revisions and oracquisition of the Zama/Virgo area in Canada contributed to ourreserve replacement success.” On a Boe basis, Phillips’ worldwideproved reserves in 1997 increased 6% to 2.28 billion Boe.
United Meridian Corp. increased its reserves by 36% to 162 MMBoeat year-end 1997 from 120 MMBoe reported at year-end 1996. Afterrecord production of 55 Bcf of gas and 8 million barrels of oil,gas reserves totaled 560 Bcf, and crude oil reserves totaled 69million barrels, compared to year-end 1996 totals of 451 Bcf and 45million bbl. During 1997, the company replaced 366% of totalproduction with additions to proved reserves, marking the eighthconsecutive year UMC has more than replaced its oil and gasproduction.
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