U.S. OIL & GAS RESERVES UP
In 2014, U.S. crude oil and lease condensate proved reserves increased to 39.9 billion barrels—an increase of 3.4 billion barrels (9.3%) from 2013. U.S. proved reserves of crude oil and lease condensate have risen for six consecutive years, and exceeded 39 billion barrels for the first time since 1972. Proved reserves of U.S. total natural gas increased 34.8 trillion cubic feet (Tcf) to 388.8 Tcf in 2014. This increase (9.8%) boosts the national total of proved natural gas reserves to a record-high level for the second consecutive year.
Sustained low prices for oil and natural gas are anticipated to reduce the reserves. Lower prices have curtailed drilling and made recovery economics more challenging. Although resource estimates are not necessarily reduced by lower prices, the calculation of proved reserves is sensitive to price.
U.S. proved reserves of crude oil and lease condensate increased for the sixth year in a row in 2014, and exceeded 39 billion barrels for the first time since 1972.
Texas added 2.1 billion barrels of crude oil and lease condensate proved reserves, mostly located within the Texas portion of the Permian Basin and the Eagle Ford Shale play.
North Dakota added 0.4 billion barrels of crude oil and lease condensate proved reserves mostly from the Bakken Shale play.
Natural gas highlights
U.S. proved natural gas reserves set a record (exceeding 388 trillion cubic feet) in 2014.
Proved reserves additions of natural gas were highest in Pennsylvania, where operators added a net 10.4 trillion cubic feet of natural gas proved reserves in Pennsylvania's portion of the Marcellus Shale play.
In 2014, West Virginia surpassed Wyoming and Colorado to become the fourth-largest state for natural gas proved reserves.
Proved natural gas reserves in Ohio more than doubled as a result of development of the Utica Shale play, and Idaho in 2014 reported proved natural gas reserves for the first time.
Proved reserves are estimated volumes of hydrocarbon resources that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions. Reserves estimates change from year to year as new discoveries are made, as existing fields are more thoroughly appraised, as existing reserves are produced, and as prices and technologies change.
In 2014, U.S. crude oil and lease condensate proved reserves increased to 39.9 billion barrels—an increase of 3.4 billion barrels (9.3%) from 2013 (Table 1). U.S. proved reserves of crude oil and lease condensate have risen for six consecutive years (Figure 1), and exceeded 39 billion barrels for the Figure 1. U.S. oil and natural gas proved reserves, 1973-2013 figure data first time since 1972. Proved reserves of U.S. total natural gas increased 34.8 trillion cubic feet (Tcf) to 388.8 Tcf in 2014 (Table 1). This increase (9.8%) boosts the national total of proved natural gas reserves to a record-high level for the second consecutive year.
Proved reserves of crude oil and lease condensate increased in two of the top five states for crude oil and lease condensate reserves in 2014 (Figure 2). Proved reserves of the top five U.S. oil reserve states, 2007-12 figure data In 2014, Texas
had the largest increase in proved reserves, 2,054 million barrels (60% of the nation's total net increase in 2014). This increase was driven by development of tight oil plays (e.g., Wolfcamp, Bone Spring) in the Permian Basin and the Eagle Ford Shale play. North Dakota had the second-largest increase, 362 million barrels, which came mostly from the Bakken tight oil play in the Williston Basin. New Mexico had the third-largest increase in crude oil and lease condensate proved reserves in 2014, as it benefitted from the same Permian Basin developments as Texas, if not to the same degree. Colorado had the fourth-largest increase in crude oil and lease condensate reserves in 2014, where both vertical and horizontal drilling were used to develop the Niobrara/Codell tight oil play in the Denver Basin.
Proved natural gas reserves increased in four of the top five U.S. gas reserves states (Texas, Pennsylvania, Oklahoma, and West Virginia) in 2014 (Figure 3).
Texas remains the largest natural gas reserves state, but the second-largest, Pennsylvania, had the largest net increase (10.4 Tcf) in 2014—largely the result of extensions to fields in the Marcellus Shale play. The reserves additions in Texas and Oklahoma were mostly from extensions in shale natural gas plays. West Virginia added enough Marcellus natural gas proved reserves to surpass Wyoming and Colorado to become the fourth-largest natural gas reserves state.
As U.S. oil reserves and production increased in 2014, imports of crude oil declined 5% from the 2013 level. Crude oil imports declined for the fourth consecutive year (Figure 4).
U.S. natural gas proved reserves and production increased in 2014, and natural gas imports declined by 6% (Figure 5), the seventh consecutive year of import declines.
Price outlook for 2015.
In July 2014, the price of WTI crude oil reached the highest recorded first-of-the-month price of the year ($106.06 per barrel). After that, the price declined, reaching $68.98 per barrel on December 1, 2014. The price continued to decline throughout 2015 and was $44.75 per barrel on October 1, 2015.
EIA forecasts in its Short-Term Energy Outlook that WTI oil prices should be approximately $46 per barrel by the end of 2015. Compared with the 12-month, first-of-the-month 2014 average of $94.56 per barrel, EIA expects that the 12-month, first-of-the-month 2015 average WTI spot oil price will decrease 47% to $50.36 per barrel. As a result, EIA anticipates net downward revisions in U.S. crude oil proved reserves in 2015.
The 12-month, first-of-the-month average natural gas spot price at the Henry Hub in Louisiana in 2014 was $4.55 per MMBtu. After January 2015, when the first-of-the-month average spot gas price at the Henry Hub was $3.01 per MMBtu, natural gas prices remained below $3.00 on average throughout 2015. Compared to $4.55 per MMBtu in 2014, the average 12-month, first-of-the-month spot natural gas price at the Henry Hub is expected to decrease 39% in 2015, to $2.76 per MMBtu. As a result, EIA anticipates net downward revisions in U.S. natural gas proved reserves in 2015.
Sustained and much lower prices for both crude oil and natural gas throughout 2015 have curtailed exploration activity, as evidenced by statistics published by the U.S. Bureau of Economic Analysis and EIA. Fewer new discoveries and extensions of existing fields, combined with the anticipated net downward revisions, are also expected to negatively affect both crude oil and natural gas proved reserves in 2015.
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