Proved reserves of U.S. crude oil and lease condensate declined by 19% during 2020

Because of lower oil prices in the first year of the COVID-19 pandemic, U.S. operators reported a 19% reduction in proved reserves of crude oil and lease condensate in 2020, according to our Proved Reserves of Crude Oil and Natural Gas in the United States, Year-End 2020 report. Proved reserves totaled 38.2 billion barrels for the year.

Proved reserves are operator estimates of the volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

The decline in crude oil and lease condensate reserves in 2020 was largely due to lower crude oil prices: the average annual price of West Texas Intermediate crude oil fell from $57 per barrel (b) in 2019 to $39/b in 2020. Lower crude oil prices caused many operators to revise their estimates of proved reserves downward and scale back development plans for new wells. Higher crude oil prices in 2021 will likely lead to more reserves in 2021.

Operators in Texas typically report the most proved reserves of crude oil and lease condensate and did so in 2020, but they also experienced the largest drop in proved reserves in 2020. Production and downward revisions lowered the state’s annual total of proved crude oil and lease condensate reserves by 16%, from 19.8 billion barrels in 2019 to 16.7 billion barrels in 2020. Proved crude oil and lease condensate reserves also fell in North Dakota by 2.2 billion barrels and in the Federal Offshore Gulf of Mexico by 0.8 billion barrels.

Principal contributor: Steve Grape