Why the EIA’s latest figures for crude oil reserves are important



Latest figures for crude oil reserves

In December 2014, the U.S. Energy Information Administration (or EIA) released its 2013 update report for US crude oil and natural gas proved reserves. In this part of the series, we’ll analyze the trends that are beginning to show up in oil and gas proved reserves.

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Crude oil proved reserves

According to the EIA, crude oil reserves in the US increased 52% from 2003 to 2013. From 2012, crude oil reserves increased 9% to 33.37 billion barrels by the end of 2013. Proved reserves are the amounts of hydrocarbon resources recoverable “under existing economic and operating conditions” with reasonable certainty.

Shales in North Dakota and Texas are gaining

North Dakota accounted for ~61% of the additional crude oil proved reserves. There was continuous drilling and development in the Williston Basin. The Williston Basin includes the Bakken and Three Forks shale plays. The region is located in North Dakota, Montana, and South Dakota.

Texas includes the Permian and the Eagle Ford. They’re the two most important tight oil plays. They accounted for the highest crude oil reserves. However, in terms of yearly growth, Texas was second. It was behind North Dakota. It accounted for an increase of 0.9 billion barrels in 2013. This includes crude oil and lease condensates’ proved reserves. Lease condensates are liquid hydrocarbons. They’re recovered when gases are separated from produced crude oil. Lease condensates are mostly pentanes and heavier hydrocarbons.

Crude oil production                                                                            

In 2013, crude oil and lease condensate production in the US increased 14%—compared to 2012. Production increased to ~2.7 billion barrels in 2013. This represents the country’s fifth consecutive annual production increase. Some of the oil upstream majors that operate in the Permian and Eagle Ford shales include Whiting Petroleum (WLL), Chevron Energy (CVX), Hess Corporation (HES), and Laredo Petroleum (LPI). Some of these companies are part of the Energy Select Sector SPDR ETF (XLE).

What about natural gas reserves in 2013? How much did they change over the years? We’ll discuss this in the next part of the series.


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