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Higher prices and continued shale resource development helped push U.S. crude oil and natural gas proved reserves to new record highs in 2017, the Energy Information Administration (EIA) said in a report on Thursday.
Proved reserves of U.S. crude oil jumped by 19.5 percent in 2017 from the end of 2016, reaching 39.2 billion barrels and beating the previous record of 39.0 billion barrels set in 1970.
Crude oil reserves reached an all-time in 2017, as higher prices typically raise reserve estimates because exploration and production companies believe that more of their resource bases can be produced. Last year, the average WTI Crude spot price rose by 20 percent compared to 2016, exceeding $60 a barrel for the first time since June 2015 and helping to drive increases in reserves, the EIA noted.
In its report for 2016, EIA said that the development in the Permian led to Texas showing the largest net increase in proved reserves of crude oil and lease condensate of all U.S. states, although the total U.S. crude oil reserves at end-2016 were virtually the same as at end-2015.
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In 2017, higher prices drove proved crude oil reserves to records, and Texas again had the biggest net increase in reserves. Texas added 3.1 billion barrels of proved reserves, followed by New Mexico which added 1.0 billion barrels of reserves. Thanks to the development in the Permian and higher oil prices, Texas and New Mexico led the reserves additions, especially in the stacked oil-bearing formations of the Spraberry Trend and the Wolfcamp/Bone Spring shale play.
Proved natural gas reserves across the U.S. jumped by 36.1 percent to 464.3 trillion cubic feet (Tcf) in 2017, beating the previous record of 388.8 Tcf from 2014, also thanks to Henry Hub natural gas prices rising by 21 percent last year.
Pennsylvania and Texas were the number-one and number-two states in terms of largest net increases in reserves, respectively, due to higher prices and development in the Appalachian and Permian basins and the Haynesville/Bossier shale play in eastern Texas and northern Louisiana, the EIA said.
The share of shale gas reserves of all U.S. natural gas reserves rose to 66 percent in 2017 from 62 percent in 2016.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.