If you've spent time looking at oil and gas companies, you know that one of the key ways to judge the members of the segment is to examine their reserve replacement, both in a single year and over time.
For that reason, it's important to take a passing gander at ExxonMobil's
About half the equivalent barrels that the company added were in the form of natural gas, with nearly 1 billion barrels of oil equivalent coming from gas projects in Papua New Guinea and Australia. The latter was primarily made up of the huge Gorgon project, which lies off the country's west coast, where Exxon is working with Chevron
Indeed, given my own belief that a key to the world's energy future lies in natural gas, it's uplifting to see Exxon's continued development of projects in that form of hydrocarbon. Looking at the specific balance between oil and gas additions during the year, Exxon replaced 92% of its liquids reserves and 192% of its gas reserves.
But if you look back over the past decade, the company has added back 99% of its liquids output and 131% of its gas production. Further, its gas reserves will jump when it completes its acquisition of unconventional producer XTO
And while I'm hesitant to confuse you with the arcane methods of calculating reserves, the method preferred by the SEC is based on the average of energy prices for the year. Under that method, ExxonMobil replaced 1.5 billion barrels, or about the same amount as its production.
One of the key lessons from the company's year involves the increasing difficulty of finding meaningful amounts of oil. Exxon looked for black gold during 2009 in such garden spots as Brazil's Santos Basin -- where it worked primarily with Hess
The lesson here? Exxon chalked up a successful year in one of the most significant oil and gas metrics. It remains my overall favorite member of the Big Oil contingent.
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