5 October 2005

The US Energy Information Administration (EIA) has published the “Advance Summary: US Crude Oil, Natural Gas, and Natural Gas Liquids Reserves 2004 Annual Report”, which concludes that US proved crude oil reserves continued to decline in 2004, but an increase was still recorded in proved natural gas reserves.

Crude oil proved reserves declined by 2% in 2004 owing mostly to a large 9% decrease in the Gulf of Mexico. Boosted by reserves additions in Wyoming, Montana, North Dakota, and Texas, the crude oil proved reserves of the onshore lower 48 States increased by 0.1%. However, three of the four largest crude oil reserves areas, the Gulf of Mexico, Alaska, and California, registered reserves declines. US new field discoveries were the lowest in 12 years—as a result operators only replaced 71% of crude oil production with reserves additions.

Proved reserves of dry natural gas increased by 2% in 2004, making it the sixth year in a row US gas reserves have increased. The US total went up even though Gulf of Mexico natural gas proved reserves dropped an unusually large 15% primarily due to low new discoveries. Nevertheless because onshore lower 48 States reserves additions were over 21 trillion cubic feet, total US reserves additions replaced 118% of 2004 dry gas production.

Natural gas liquids proved reserves grew by 6% in 2004, rebounding from their 2003 decline.

Source: EIA (2004 Annual Report)