Commodities Buzz: Higher Natural Gas Prices In 2021 Will Likely Lead To More Proved Natural Gas Reserves Says EIA

27 Jan 2022 , 12:24 PM

The Energy Information Administration or EIA noted in a latest update that because of lower natural gas prices in the first year of the COVID-19 pandemic, U.S. operators reported that proved natural gas reserves in 2020 declined by 4% to 473.3 trillion cubic feet (Tcf). 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 the future from known reservoirs under existing economic and operating conditions. The decline in natural gas reserves in 2020 was largely attributable to lower natural gas prices. The average annual price of natural gas at Henry Hub fell from $2.56 per million British thermal units (MMBtu) in 2019 to $2.03/MMBtu in 2020. In 2020, low prices caused many operators to revise their proved reserves estimates downward and scale back development plans for new wells. Higher natural gas prices in 2021 will likely lead to more proved natural gas reserves in 2021.

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