The unconventional gas boom continues, despite lower commodity prices, and it has contributed significantly to gas reserve growth, according to the latest U.S. exploration and production (E&P) benchmark study by Ernst & Young (E&Y).

End-of-year gas reserves were 156.6 Tcf in 2009, representing 4% growth from 2008 and 40% growth over 2005. Gas production rose 6% in 2009 to 11.9 Tcf and has shown 38% growth since 2005.

The study, which examined the public reports of the top 50 E&P companies’ U.S. operations, also found that the oil and gas industry was not immune to the weak global economy of 2009. While the industry realized a 7% increase in combined oil and gas production, revenues were down 36% and after-tax profit was down 97%. At the same time, costs, which had risen to unprecedented heights over the previous five years, finally relented.

“From this study, we see many companies working very hard through difficult economic circumstances and making necessary spending cuts to return value for shareholders,” said Marcela Donadio, E&Y Americas oil and gas leader. “Aside from major changes in energy regulations, we see the realignment of costs as a very positive indication of opportunity for increased exploration and production activity in the coming years.”

The 50 companies in the study account for approximately 85% of total U.S. oil reserves and approximately 64% of gas reserves. For 2005 trough 2009, E&Y examined E&P trends for integrateds, independents and large independents. Revenues from E&P decreased 36% from $190.2 billion in 2008 to $122.3 billion in 2009. This decline was driven by lower commodity prices as combined oil and gas production increased 7% in 2009.

Production costs, which had reached unprecedented highs by mid-2008, declined 22% in 2009 to $36 billion. This is the first decrease the industry has seen in the five-year period studied. Production costs were $46 billion in 2008.

Upstream spending was cut nearly in half in 2009. Total expenditures, including proved and unproved property acquisitions, fell 47% to $73.4 billion in 2009 from $139.8 billion in 2008.

Seven companies increased their combined exploration and development spending in 2009: Comstock Resources, Concho Resources, EQT, ExxonMobil, Petrohawk Energy, Plains Exploration & Production and Royal Dutch Shell.

There were 50 companies examined in the study using data from annual reports.

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