The 50 companies highlighted here account for approximately 85% of total US oil reserves and approximately 64% of total US gas reserves as of Jan. 1, 2010.

Our US E&P benchmark study findings reveal that the oil and gas industry was not immune to the global economic struggles of 2009.

Study overview

Our US exploration and production (E&P) benchmark study is a compilation and analysis of certain oil and gas reserve disclosure information reported by 50 publicly traded companies in their annual reports filed with the United States (US) Securities and Exchange Commission (SEC). Results are for the five-year period from 2005 through 2009.

The companies

The 50 companies highlighted  account for approximately 85% of total US oil reserves and approximately 64% of total US gas reserves, based on January 1, 2010 estimates published by the Oil & Gas Journal. Thus, the results of these companies are generally representative of the US E&P industry as a whole. However, it should be noted that results for these 50 companies and for the E&P industry as a whole may be significantly different in other regions of the world.

The companies are classified into three peer groups:

• integrated companies (integrateds) - have refining and marketing activities in addition to exploration and production
• independents -  involved in exploration and production activities only
• large independents - classified as “large” if their 2009 worldwide ending reserves exceeded 1 billion barrels of oil equivalent

Study performance measures

The performance measures presented are based on the companies’ oil and gas reserve disclosure information. Ernst & Young’s methodology for calculating the performance measures is defined below:

• Proved reserve acquisition costs are calculated as (proved property acquisition costs and identified related asset retirement obligation costs), divided by proved reserves purchased.
• Finding and development costs are calculated as (unproved property acquisition costs, exploration costs, development costs and identified related asset retirement obligation costs), divided by (extensions and discoveries, revisions and improved recovery of proved reserves). The calculation excludes the effect of proved reserves purchased.
• Reserve replacement costs are calculated as total costs incurred divided by (extensions and discoveries, revisions, improved recovery and purchases of proved reserves).
• Production replacement rate (all sources) is calculated as (extensions and discoveries, improved recovery, revisions, purchases and sales of proved reserves), divided by production.
• Production replacement rate (excluding purchases and sales) is calculated as (extensions and discoveries, improved recovery and revisions of proved reserves), divided by production.
• Production costs are calculated as production costs, including production taxes, transportation costs and production-related general and administrative expenses, divided by production.

Many individual companies calculate and report their own performance measures. They may use distinct methods that produce results different from those shown in this report.

Side note

The data was obtained from IHS Herold, Inc. and, in some cases, the individual companies’ published annual reports filed with the US SEC. Restatements or other adjustments made to costs incurred or revenues and results of operations data in subsequent years have not been incorporated herein.

Restatements or other adjustments made to oil and gas reserve data are included in the “Other” component of the reserve tables, but these amounts are not included in the performance measure calculations. Totals presented may not add due to rounding. All amounts are reported in US dollars.

The following units of measure are used in this report for gas reserves: Mcf (thousand cubic feet); Bcf (billion cubic feet) and Tcf (trillion cubic feet.) Certain amounts in this report are presented on a per barrels of oil equivalent (BOE) basis. Natural gas volumes are converted to barrels at a ratio of 6 Mcf to one barrel of oil. Natural gas prices are quoted on a MMBTU (million British Thermal Unit) basis.