U.S. natural gas reserves, boosted by existing field extensions, increased for the seventh year in a row in 2005, with proved dry gas reserves up 6.2% from 2004 — the largest annual increase since 1970, the Energy Information Administration (EIA) reported last week. Onshore reserve additions were big enough to overcome a 10% decline in offshore Gulf of Mexico (GOM) numbers, which fell year-over-year partly because of last year’s hurricanes.

The 19-page EIA “Advance Summary: U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves” is an annual report based on reserves data from 1,394 operators and production data from 508 active gas processors.

According to the report, Texas and Colorado led the nation in reserves additions in 2005, notably from the Newark East Field of the Barnett Shale of Texas and the Ignacio-Blanco Field of Colorado.

Dry gas reserve discoveries last year totaled 23,200 Bcf, which was 45% higher than the 10-year average and 15% higher than in 2004. EIA credited the increase to more exploratory wells being drilled, which included new field extensions, new field discoveries and new reservoir discoveries in old fields.

Most of the gas discoveries last year followed extensions of existing fields, EIA reported. Field extensions added 21,050 Bcf, which was 16% higher than in 2004 and 74% higher than the 10-year average (12,101 Bcf). New field discoveries added 942 Bcf, 24% higher than in 2004, but 46% lower than the 10-year average (1,731 Bcf). Drilling in old fields accounted for 1,208 Bcf of new reservoir discoveries, up slightly from 2004, but 45% lower than the 10-year average of 2,198 Bcf.

Net revisions and adjustments to gas reserves totaled 4,586 Bcf, which was seven times higher than in 2004, but 7% less than the 10-year average of 4,908 Bcf. Net of sales and acquisitions, proved reserves totaled 2,544 Bcf.

Also, EIA reported coalbed methane (CBM) reserves increased 8% last year from a year earlier, and accounted for 10% of the total U.S. dry gas reserves. CBM production increased less than 1% from 2004, but it accounted for 9% of total U.S. production.

While reserves additions were up, total U.S. gas production declined 4% in 2005 from 2004, partly because of coastal and offshore damage related to last year’s hurricanes Katrina and Rita. The storms wreaked havoc along the Gulf Coast last August and September, destroying 113 offshore platforms and seriously damaging offshore pipelines and coastal oil and gas processing facilities.

“At its nadir, natural gas production in the Gulf of Mexico (which accounted for 20% of U.S. dry gas production in 2004), was cut by 80%,” EIA noted. GOM output, it said, has slowly returned and is expected to reach about 90% of pre-hurricane production this month. However, EIA noted that for “several years before Hurricane Katrina, gas production from the Gulf had been declining about 10% per year.”

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