Discoveries

Marginal wells may not receive the attention of the big oil and gas discoveries, but they are critical to the U.S. energy supply, providing 17% of the domestic oil and 9% of the natural gas produced onshore, according to a report by the Interstate Oil and Gas Compact Commission (IOGCC). Without marginal wells, the IOGCC estimated the United States would have to increase imports by nearly 7%.

World energy demand will continue to grow, but new oil and natural gas discoveries ramping up across the globe will likely lead to stabilized prices and perhaps even a dip in the long term, the CEO of BP plc said Tuesday.

Petro-Canada, Kerr-McGee, Canadian Superior, EOG Resources, Total, Norsk Hydro and BHP Billiton were among the successful bidders in Trinidad and Tabago’s recent offshore acreage sale, which eventually could lead to new gas supply for the Atlantic LNG project, the largest liquefied natural gas (LNG) exporter to the United States.

Range Resources said its proved reserves rose 18% to 685 Bcfe last year, including 486 Bcf of gas and 33 million barrels of oil and gas liquids. Discoveries and extensions added 69 Bcfe, about 90 Bcfe were acquired and upward revisions added 7 Bcfe, bringing the total increase for the year to 166 Bcfe. The increase was offset by 58 Bcfe of production and the sale of 1 Bcfe of reserves. The pretax present value of the company’s proved reserves at year-end, based on constant prices and costs and discounted at 10% rose to $1.4 billion, representing a 45% increase during the year. The valuation was based on year-end Nymex prices of $6.19/MMBtu and $32.52/bbl, compared to $4.75/MMBtu and $31.17/bbl a year earlier. The company replaced 286% of production in 2003, including 130% from drilling and revisions and 156% from acquisitions. Excluding the impact of price increases, reserve replacement would have been 271%. Total anticipated finding costs in 2003 averaged $1.26/Mcfe.

Two announcements last week indicate that Gulf of Mexico (GOM) discoveries have not ended, nor have producers put their deepwater work on the back burner.

Deepwater discoveries by the majors in the Gulf of Mexico haveattracted a lot of attention, but quietly, smaller North Americanindependents have staked their claims in the shallower waters ofthe Gulf. Better technology, an infrastructure already in place,less cost and a consumer thirst for natural gas have made theshallow waters of the Gulf an enticing niche for independentswanting to make their mark.

Deepwater discoveries by the majors in the Gulf of Mexico have attracted a lot of attention, but quietly, smaller North American independents have staked their claims in the shallower waters of the Gulf. Better technology, an infrastructure already in place, less cost and a consumer thirst for natural gas have made the shallow waters of the Gulf an enticing niche for independents wanting to make their mark.

Development is accelerating on Canada’s newest natural gasfrontier, as a third production project steps forward to tapdiscoveries in the southern Northwest Territories.

Development is accelerating on Canada’s newest gas frontier as athird production project steps forward to tap discoveries in thesouthern Northwest Territories.