About the study
The US oil and gas reserves study is a compilation and analysis of certain oil and gas reserve disclosure information as reported by publicly traded companies in their annual reports filed with the United States Securities and Exchange Commission (SEC). This report presents the US exploration and production (E&P) results for the five-year period from 2012 through 2016 for the largest 50 companies based on 2016 end-of-year US oil and gas reserve estimates.
As commodity prices stabilized at lower levels, study companies decreased capex another 27% in 2016, but maintained robust plowback levels averaging 158%.
- Expenditures totaled US$85.7 billion, 27% lower than 2015 and 57% lower than 2014.
- Growth in proved and unproved property acquisition costs was more than offset by significant reductions in exploration- and development-related expenditures.
Revenues and results of operations
- Revenues were US$103 billion, down 21% from 2015 and 53% lower than 2014.
- Impairments were US$20 billion, an 83% reduction from 2015’s staggering US$121 billion.
- Net losses of US$34.5 billion were recognized, a substantial improvement from US$100.8 billion in net losses in 2015.
- Production was 2.3 billion barrels, a 3% decline from 2015.
- Downward reserve revisions were 0.9 billion barrels, substantially lower than the 4.2 billion barrels downward revisions in 2015.
- Production was 13.4 tcf, a 3% decline from 2015.
- Downward reserve revisions were 5.9 bcf, a substantial reduction from the 41.0 bcf downward revisions in 2015.
Capital expenditures reach five-year low
Though not as dramatically as in 2015, the study companies aggressively cut capital spending even further in 2016 due to the low oil price environment. Total capital expenditures were US$85.7 billion in 2016, representing a 27% decrease from 2015 versus the 42% cut from 2015 to 2014.
Although companies continued making significant cuts to exploration spending and development spending, with reductions of 35% and 52% respectively in 2016, the study companies saw a rebound in acquisition activity from 2015. Unproved property acquisitions surged 119% to US$23.2 billion and proved property acquisition costs similarly rose 100% to US$12.0 billion.
Lower revenues, but strong plowback
The study companies reported net losses of US$34.5 billion in 2016, an improvement from 2015 which saw net losses of $100.8 billion largely due to staggering impairments. Combined oil and gas production decreased by 3% in 2016 and, partnered with lower prices, caused revenues to decline 21% to US$103 billion in 2016.
The study companies posted a 158% plowback percentage in 2016, while the five-year average was 132%. The plowback percentage represents total capital expenditures as a percentage of netback (revenues less production costs). Among the study companies’ peer groups, independents posted the highest plowback percentage with a 2016 rate of 186%. The large independents had a rate of 149%, while the integrateds followed closely at 141%.
Oil and gas reserves lower
Oil reserves for the study companies declined a modest 2% in 2016 as extensions and discoveries more than offset production, while substantially lower downward revisions were recorded compared with 2015. Oil reserves were 24.4 billion barrels in 2015 compared with 23.9 billion barrels in 2016.
End-of-year gas reserves for the study companies shed a mere 1% in 2016 to 148 tcf, compared with a 21% drop in 2015 largely due to significant downward reserve revisions. In 2016, extensions and discoveries were relatively flat, at 18.8 tcf, and largely offset production and smaller downward reserve revisions.