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26 DOMINION 2006 Annual Report
STRATEGIC REFOCUS ON CORE VALUES AND KEY BUSINESSES, CONTINUED
2
7
65
8
3
4
1
3
Proved Reserves (Bcfe)*
As of December 31, 2006: 6,530
Daily Production (Mmcfe/day)
Year-to-date December 31, 2006: 1,280
* Includes 164 Bcfe of proved reserves
owned by Dominion Transmission and
reported in Dominion Energy.
On November 1, 2006, Dominion
announced that it would pursue the sale
of its non-Appalachian gas and oil
properties. This map differentiates the
Appalachian properties from the
non-Appalachian properties at year-end
2006.
31 2 6 6 5
31 2 6 1
31 2 6 5 5
100 Bcfe
1
Proved Reserves (Bcfe): 1,006
Daily Production (Mmcfe/day): 10
2
Proved Reserves (Bcfe):26
Daily Production (Mmcfe/day): 60
3Gu
Proved Reserves (Bcfe): 428
Daily Production (Mmcfe/day): 131
4Gu x
Proved Reserves (Bcfe):96
Daily Production (Mmcfe/day): 503
5
Proved Reserves (Bcfe):80
Daily Production (Mmcfe/day): 126
6
Proved Reserves (Bcfe): 2,146
Daily Production (Mmcfe/day): 219
7ky u/
Proved Reserves (Bcfe): 658
Daily Production (Mmcfe/day): 113
8g
Proved Reserves (Bcfe): 2 8
Daily Production (Mmcfe/day): 21
and access to pipelines and processing plants, their
production benefits from low transportation costs and
higher-than-average market prices.
Our Appalachian reserves are estimated at year-end
2006 to have more than 1 trillion cubic feet of natural gas
equivalent and an average daily production of 107 million
cubic feet of natural gas equivalent. In other words, our
Appalachian Basin wells are expected to produce for quite
a long time, with production declining an average of only
5 percent a year. Some wells, like No.1, our oldest, have
been producing for 100 years. The average life of our
Appalachian proved reserves is nearly 26 years, compared
with the 7- year average life span of a typical well in the
Gulf of Mexico. Owning long-life reserves greatly reduces
the financial risk of exploring for new reserves to replace
depleted reservoirs.
APPALACHIAN NATURAL GAS ASSETS:
“OLD FAITHFUL”
Even if we sell the bulk of our E&P business, we intend
to keep our E&P assets in West Virginia, Pennsylvania,
Ohio, New York, Virginia and Kentucky because they are
the company’s own “Old Faithful.” Dominion’s
Appalachian natural gas and liquids production business
is expected to contribute less than 5 percent of
Dominion’s consolidated operating income after the sale
of our other oil and natural gas assets.
HIGHER MARKET PRICES, LOWER TRANSPORTATION COSTS
These 9,000 producing wells are close to the premium
natural gas-consuming markets in the Northeast. With
existing links to distribution systems and storage fields