Reporting oil companies’ valid pot in 2016 decrease for second uninterrupted year

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Annual reports of 68 publicly traded oil companies indicated that their sum valid liquids pot declined in 2016 for a second uninterrupted year. The decrease in valid pot was heavily strong in a few companies that reduced their estimated pot from Canadian oil sands projects. Downward revisions of existent resources, comparatively low extensions and discoveries, and comparatively high prolongation also contributed to a decrease in valid reserves.

Image credit: U.S. Energy Information Administration

The 68 oil companies enclosed in this research are listed on U.S. batch exchanges and hence are compulsory to news their valid pot annually to a U.S. Securities and Exchange Commission (SEC). Collectively, their tellurian wanton oil and other liquids prolongation averaged 24 million barrels per day (b/d) during 2016, or about 25% of a tellurian total.

Proved pot are a estimated quantities of oil that, with reasonable certainty, are recoverable underneath existent mercantile and handling conditions. These association estimates are formed on accessible geologic and engineering data, that change as record develops. Price changes and other mercantile factors can have a poignant outcome on a mercantile viability of oil projects, and some companies privately cited low wanton oil prices in 2016 as a reason to correct their valid pot bottom downward.

Image credit: U.S. Energy Information Administration

Extensions (more resources during existent fields) and discoveries (resources during new fields) paint newly found quantities of oil and totaled 4.9 billion barrels opposite a 68 companies in 2016. Following a wanton oil cost decrease commencement in mid-2014, companies significantly reduced collateral expenditures, generally in their scrutiny and growth budgets. Instead, they focused on extracting additional oil from pot grown in prior years.

Image credit: U.S. Energy Information Administration

Additions from extensions and discoveries and net purchases of pot from companies not enclosed in this research were equivalent by vast disastrous revisions to association assessments of existent reserves. Reserves also declined as these companies collectively extracted 8.9 billion barrels of liquids in 2016. The sum outcome of these changes and other factors was a net rebate of 8.2 billion barrels in valid reserves.

Image credit: U.S. Energy Information Administration

Later this year, EIA will emanate an annual news that focuses exclusively on valid pot located in a United States, including all U.S. producers, either or not they are publicly traded. The comparatively tiny change in a U.S. pot member of tellurian sum pot for a 68 companies whose reports were reviewed here suggests that EIA’s 2016 valid pot news for a United States will uncover usually medium changes from a 2015 report.

So distant in 2017, collateral expenditures sojourn reduce than for a same duration in 2016. Generally, incomparable companies with some-more prolongation are shortening expenditures, while comparatively smaller companies are augmenting their collateral expenditures.

Forty-five of a companies in this research constructed reduction than 250,000 b/d in a initial entertain of 2017, and 28 of those 45 increasing their collateral expenditures compared with a initial entertain of 2016. In aggregate, those 45 companies increasing their collateral expenditures by $2.6 billion. In contrast, 17 of a 22 companies producing some-more than 250,000 b/d in this research reduced collateral expenditures. Those 22 companies, in aggregate, lowered their collateral expenditures by $10.8 billion.

For additional oil association financial analysis, see EIA’s Financial Review 2016.

Source: EIA

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