Petroleum reserves

US Sets New Records for Proved Oil and Gas Reserves

Proved oil reserves totaled 43.8 billion bbl at yearend 2018 while proved gas reserves amounted to 504.5 Tcf, both topping records set in 2017, the US Energy Information Administration said.

Source: Getty Images.

The US in 2018 posted record highs in proved reserves for crude oil and natural gas, which were respectively up 12% and 9% year-over-year, according to a report from the US Energy Information Administration (EIA). The increases were driven by strong oil and gas prices, the agency said.

Proved oil reserves totaled 43.8 billion bbl at yearend, topping the previous year’s record, as US crude and lease condensate production surged 17% year-over-year. The annual average spot price for West Texas Intermediate crude at the Cushing, Oklahoma, storage hub increased 29% in 2018 to $65.66.

Producers in Texas added 2.3 billion bbl of crude and lease condensate proved reserves, the largest net increase of all states in 2018, thanks to higher prices and development in the Permian Basin. New Mexico also benefited from Permian drilling, which helped give the state an additional 750 million bbl in crude and lease condensate proved reserves. North Dakota ranked third among the states, adding 422 million bbl.

Louisiana, down 32 million bbl, took the largest net decline in crude and lease condensate proved reserves in 2018.

Proved gas reserves amounted to 504.5 Tcf at yearend 2018, also surpassing the previous record set in 2017, as US gas output rose 12% year-over-year. The annual average gas spot price at Henry Hub, Louisiana, increased by 12% year-over-year to $3.35/MMBtu.

As with previous years, the increase was primarily driven by shale, with proved gas reserves from shale plays accounting for 68% of total US proved gas reserves, up from 66% a year earlier.

Higher prices and increased development in the Permian’s Wolfcamp/Bone Spring shale play resulted in Texas also adding the most proved gas reserves, 22.9 Tcf, during the year. The next largest net gains were in Pennsylvania, 14.2 Tcf, thanks to development of the Marcellus shale play in the Appalachian Basin. The Wolfcamp/Bone Spring shale also helped boost New Mexico’s proved gas reserves by 4.2 Tcf.

Looking ahead to 2019, lower oil and gas prices and a precipitous decline in drilling are expected to result in a drop in US proved oil and gas reserves, EIA said.

Proved reserves are volumes of oil and gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.