Occidental Petroleum Corp. (Oxy) said Wednesday that its year-end 2009 worldwide proved reserves jumped to 3.23 billion boe from 2.98 billion boe at the end of 2008.
Last year the Los Angeles-based producer’s proved reserve additions from all sources totaled 483 million boe, compared with production of 235 million boe, for a production replacement ratio of 206%.
CEO Ray R. Irani said last year’s output was replaced “largely through improved recovery and extensions and discoveries. Over the last three years, we replaced 160% of our production.”
Oxy also cut its finding and development (F&D) costs dramatically in 2009, said Irani. “Our finding and development costs in 2009 were $7.90/boe. For the last three-year period, our finding and development costs averaged about $15.10/boe.”
At year-end 2009 73% of Oxy’s proved reserves were oil and 27% were natural gas. Of the total proved reserves, about 64% were in the United States, with the rest in overseas locations. Around 23% of the proved reserves were proved undeveloped; 77% were proved developed.
Of the total reserve changes, improved recovery, which reflects Oxy’s enhanced oil recovery activities, represented 173 million boe of proved reserves additions, mainly in California, the Permian Basin and In Oman. Extensions and discoveries added another 92 million boe of reserves, mainly in the Kern County, CA, discovery area, with smaller additions internationally. Oxy also added 160 million boe through purchases of proved reserves, which mostly consisted of domestic acquisitions in California and New Mexico.
Revisions of previous estimates provided a net 58 million boe additions to reserves, said Oxy. Domestic positive oil price-related revisions were more than offset by negative gas price-related revisions, and other changes in the United States and Argentina, the producer said..
Costs incurred for exploration and development activities, and acquisitions were $3.8 billion.
Oxy produced 645 MMcf of natural gas in the United States in 4Q2009, up from 596 MMcf in 4Q2008. Domestic gas operations were ongoing in California, the Permian Basin and in the Midcontinent.
Oxy’s realized price for worldwide crude oil was $69.39/bbl in 4Q2009 versus $53.52/bbl in the year-ago period. Domestic realized gas prices dropped to $4.37/Mcf in the final period of 2009 from $4.67/Mcf in 4Q2008.
Analysts with Tudor, Pickering, Holt & Co. called Oxy’s reserves additions in 2009 “world class” and noted that low domestic gas prices dropped Oxy’s gas reserves total by 22%, or 114 million boe. Otherwise, “reserves would grow plus-12% year/year if not for low U.S. gas prices.”
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