Report: U.S oil and gas reserves reach 5-year high

HOUSTON, TEXAS (BNO NEWS) — U.S. oil reserves had an 11 percent growth in 2010, while the country’s gas reserves had a 12 percent growth during the same period, marking the highest combined growth in five years, according to a report released by Ernst & Young LLP on Tuesday.

The ‘2010 US E&P benchmark study’ included the 50 largest companies based on 2010 end-of-year oil and gas reserves estimates, showing that ending oil reserves for the companies reviewed were 17.8 billion barrels while ending gas reserves were 174.3 Tcf (trillion cubic feet of gas) as a result of strong shale development.

The report also showed that the oil production replacement rate from all sources – including extensions and discoveries, improved recovery, revisions, purchases and sales of proved reserves – was 234 percent in 2010, while all sources natural gas production replacement rate was 252 percent during the same year.

In addition, 2010 total upstream spending totaled to $177.9 billion, which was more than twice compared to 2009’s $72.8 billion, the study said. Upstream spending included acquisitions of proved and unproved properties, as well as exploration and development spending. ExxonMobil’s acquisition of XTO Energy accounted for 51 percent of proved property acquisition costs and 40 percent of unproved property acquisition costs last year.

Meanwhile, upstream revenues for the companies increased 19 percent from $121.1 billion in 2009 to $143.8 billion in 2010, largely pushed by higher oil and gas prices. Upstream revenues averaged $43.82 per barrel of oil equivalent (BOE) in 2010, up from $37.09 per BOE in 2009.

According to the report, production costs also rose 10 percent from $35.6 billion in 2009 to $39.1 billion in 2010, averaging $11.90 per BOE in 2010 compared to $10.91 per BOE in 2009. Lease operating expenses, meanwhile, increased 5 percent in 2010, while production taxes were up 27 percent.