Not since 1976 -- when Peter Frampton was on the radio and Jimmy Carter was heading to the White House -- have U.S. proved reserves of natural gas stood as high as they did last year, according to the U.S. Department of Energy's Energy Information Administration (EIA).

Reserves increased 3% last year, rising to more than 211 Tcf. Additions to reserves replaced 136% of dry natural gas produced in 2006, the eighth year in a row that domestic gas proved reserves have increased, EIA said in a report last week.

Prices at the wellhead declined 12% last year to an average of $6.42/Mcf compared to $7.33/Mcf in 2005. Well completions, both exploratory and development, were up 17% from 2005, EIA said.

Texas led the nation in gas reserves additions last year with a 9% increase in dry gas proved reserves due to rapid development of Barnett Shale reservoirs in the Newark East Field in northeastern Texas. "Advances in horizontal drilling and hydraulic fracturing technology and relatively high natural gas prices supported this development," EIA said in its "Advance Summary: U.S. Crude Oil, Natural Gas and Natural Gas Liquids Reserves 2006 Annual Report."

Alaska and Utah were second and third in dry gas proved reserves additions last year, EIA said. Besides Texas with its prolific Barnett Shale play, gas production also increased in Louisiana and the Rocky Mountain states of Colorado, Wyoming, Utah and Montana. However, Gulf of Mexico gas production declined by 6%.

Discoveries of dry natural gas reserves attributed to exploratory wells, which include field extensions, new fields and new reservoirs in old fields, were 23,342 Bcf last year. This was 35% more than the prior 10-year average of 17,255 Bcf and 1% more than in 2005. The majority of natural gas total discoveries last year were from extensions to existing fields. Field extensions accounted for 21,778 Bcf, 3% more than in 2005 and 61% more than the prior 10-year average of 13, 522 Bcf.

New field discoveries accounted for 409 Bcf, 57% less than the volume discovered in 2005 and 75% less than the prior 10-year average of 1,659 Bcf. And new reservoir discoveries in old fields accounted for 1,155 Bcf, 4% less than in 2005 and 44% less than the prior 10-year average of 2,074 Bcf.

Net revisions and adjustments amounted to a net loss of 1,093 Bcf last year, EIA found. The prior occurrence of negative net revisions was almost 20 years ago in 1988.

Coalbed methane reserves declined 1% last year and accounted for 9% of U.S. dry gas reserves. Production from coalbeds increased 2% last year and accounted for 9% of production.

Natural gas liquids proved reserves increased 4% last year with operators replacing 138% of U.S. gas liquids production with reserves additions.

The report is available from the EIA website at www.eia.doe.gov/pub/oil_gas/natural_gas/data_publications/advanced_summary/current/adsum.pdf.

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