A peak at some of the producer year-end results that have comein suggests that average daily domestic gas production could bedown by as much as 4% 1998 to 1999, although one industry watcherthinks that number seems a little high. “That blows my mind. That’sa huge drop,” said Ron Denhardt, energy services vice president forWEFA Inc.

Of 18 producers that have reported earnings and results so far,production declines have been as great as 23% year-over-year atPioneer Natural Resources, and growth has been as great as 39% atOcean Energy. Ocean said overall production increases wereprimarily the result of its Seagull Energy acquisition, partiallyoffset by property sales during 1999.

Quarter-to-quarter data from 17 producers shows an average dailygas production decline of 5%. Denhardt said he has yet to look atyear-end data, but numbers for the first three quarters of 1998 and1999 lead him to believe production declines are more likely toaverage in the 3.3% neighborhood.

While production was off, overall reserve replacement, at leastat two big producers, was not. ExxonMobil yesterday said itreplaced 106% of its overall production last year. Unocal did evenbetter, replacing 159% of its net worldwide oil and gas production,the company said yesterday.

“Our overall reserve replacement performance is the best forUnocal since 1990,” said CEO Roger C. Beach. “We are successfullytransitioning to a growth and return-oriented E&P company witha focus on bringing additional production and reserves onto thebooks.”

Domestically, though, Unocal’s replacement figure differedsubstantially. Spirit Energy 76, the company’s Lower 48 E&Punit, replaced only 65% of 1999 production with new reserves.Spirit’s reserve performance was affected by low exploration andcapital expenditures in 1999 in response to weak oil prices, thecompany said. Last year’s reserves also do not include anyadditions for deep-water Gulf of Mexico discoveries.

ExxonMobil’s 106% figure excludes property sales. With salesincluded, reserve replacement was 105%. “This year’s strongperformance is the sixth year in a row that we’ve exceeded 100%replacement,” said Chairman Lee Raymond. “Over the last 20 years,we’ve added nearly 35 billion oil-equivalent barrels to provedreserves, more than replacing reserves produced.”

* Total for fourth quarter numbers excludes Phillips volumes.
** Arco’s gas production includes Vastar’s gas production
*** Excludes Alaska volumes

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