Oil and gas proved reserves hit a new high in 2018, the U.S. Energy Information Administration reported Dec. 13.
The EIA's annual report on domestic oil and gas reserves found that natural gas proved reserves were up by about 9% to 504.5 Tcf at the end of 2018 from a prior record level of 464.3 Tcf at the end of 2017.
In addition, U.S. natural gas production climbed 12%, or 3.7 Tcf, and natural gas imports declined 5%, or 144 Bcf, in 2018 from the prior year.
Proved reserves of crude oil in the U.S. increased about 12% to 43.8 billion barrels from 39.2 billion barrels at the end of 2017. The previous record for crude oil proved reserves occurred in 2017, the EIA said. The agency noted that the average spot price for a barrel of West Texas Intermediate crude oil at Cushing, Okla., increased 29% in 2018 to $65.66.
As for lease condensate, proved reserves increased 14% to 3.2 billion barrels at year-end 2018.
The biggest net gain in proved natural gas reserves was in Texas, primarily in the Wolfcamp/Bone Spring shale play in the Permian Basin. The second-biggest increase for natural gas proved reserves in 2018 was in Pennsylvania, of which the largest share came from the Marcellus Shale play of the Appalachian Basin.
The EIA noted that not every region saw an uptick in proved reserves. Three of the eight largest gas reserves states — Louisiana, Colorado and Ohio — reported a net decrease in proved reserves in 2018.
While the annual average spot price for natural gas at the Louisiana Henry Hub increased, up 12% to $3.35/MMBtu in 2018 from the end of 2017, the continued increase in natural gas production has put some downward pressure on natural gas prices overall in the U.S. The EIA noted that some "operators have curtailed some of their anticipated field development plans because of this price reduction."
Recently, Chevron Corp. announced plans to write down $10 billion to $11 billion in assets, primarily for the company's shale gas assets in Appalachia, and attributed some of that decision to expected low future commodity prices.
The EIA defines proved reserves as volumes of oil and natural gas that geological and engineering data "demonstrate with reasonable certainty" can be recovered in future years from known reservoirs assuming existing economic and operating conditions continue.