Washington, 20 October w009 

At the end of 2008, domestic natural gas proved reserves reached their highest level since the U.S. Energy Information Administration ( EIA)  began reporting them in 1977, according to "Summary: U.S. Crude Oil,  Natural Gas, and Natural Gas Liquids Reserves, 2008", released today by EIA.  Discoveries of 29.5 trillion cubic feet (Tcf) of gas during 2008, an increase of 3 percent, represent the sixth consecutive yearly increase. 

Reserves from shale reservoirs grew dramatically, up 51 percent over  2007 and now accounting for 13 percent of total proved reserves of  dry natural gas.  “This year’s report underscores for a second year  the technological shift in domestic exploration and production from  conventional reserves to unconventional shales” said EIA Administrator Richard Newell.  “Given the drop in the price of natural gas during 2008, growth in proved reserves is remarkable.”

U.S. crude oil proved reserves declined 10 percent (down by 2,196  million barrels) in 2008, despite a third year of increased  discoveries, mainly in the Gulf of Mexico, west Texas and in the  Bakken formation in North Dakota.  The overall drop in oil reserves reflects use of low end-of-year prices to assess reserves under  existing financial accounting standards.

Proved reserves are those a company believes with reasonable  certainty can be produced with current technology at current  prices.  Accounting rules in place for 2008 required companies to  calculate proved reserves based on end-of-year oil prices. The  price of oil on December 31, 2008 was $44.60 per barrel, compared  to $99.64 per barrel on the same date a year earlier.  New  accounting standards adopted by the Securities and Exchange Commission will now require companies to use an annual average  price and will help mitigate a similar situation in the future.

Low prices also affected proved reserves of dry natural gas, but  this effect was less severe than for oil, and discoveries were  large enough to more than offset both the negative net revisions  and the year’s production.

Summary: U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2008 is available at:

www.eia.doe.gov/oil_gas/fwd/cr.html