U.S. Oil Production Flat Over Past Four Years

Oil production in the US by most major producers has been flat for the past 4 years at 1.2 billion barrels a day, according to a benchmark study from Ernst & Young. However, gas production rose 7% last year, boosting ending reserves a similar percentage to 138.6 trillion cubic feet. The replacement rate for gas rose to 190% compared with 100% for oil.

E&Y’s benchmark study is based on analysis of SEC filings of 40 companies representing 74% of US oil reserves and 68% of gas reserves.

Other findings of the study:

• Exploration costs more than doubled from 2003 to 2007, and rose 15% in 2007 alone to $11.71 per barrel of oil equivalent.
• Revenues from oil and gas exploration acitivities rose 12% in 2007, though net income from operations rose only 4% due to higher production costs and other factors.
• The amount the 40 companies plowed back into exploration rose to 93% during 2005-2007, compared with 83% for the entire five-year period.

The full preview report, Global E&P benchmark study, which inlcudes details on each company, is available free of charge (registration required).

Comments

[Greg Pinelli:]

1.2 billion barrels..as in B..a day!! And we're complaining? Where are we hiding the stuff? I would hope you're not charging for the report..in fact, I'm thinking of sending you a bill just for reading the summary!
PS......Does anyone at Alpha ever proof read anything???...Excuse me...my bad.

2008 Jul 07 10:49 PM

[Robert Sczech:]

The US produces roughly 5 to 6 million barrels of oil per day. It takes at least 6 month for the US to produce 1 billion barrels.

The claim that oil production was constant during the past 4 years is most likely also wrong. Since 1971, the US production declined at the average rate of 2% per year.

2008 Jul 08 10:41 AM

[Brian Pursley:]

In order for the majors to increase production it would be necessary to spend money on exploration and production rather than on dividends and share repurchases. So far that hasn't happened.

2008 Jul 11 10:04 AM

[Brian Pursley:]

As far as the US is concerned, if we want to increase production we're going to first need to legalize drilling.

2008 Jul 11 10:06 AM