Hess 2014 Annual Report Download - page 106

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(d) Natural gas liquids net proved developed reserves were 65 million barrels, 61 million barrels and 76 million barrels at December 31, 2014, 2013 and 2012,
respectively, and 56 million barrels at January 1, 2012. Natural gas liquids net proved developed reserves in the United States were 85%, 83% and 82% at
December 31, 2014, 2013 and 2012, respectively. Natural gas liquids net proved developed reserves in Norway were 15%, 15% and 10% at December 31, 2014,
2013 and 2012, respectively.
(e) Natural gas liquids net proved undeveloped reserves were 80 million barrels, 75 million barrels and 60 million barrels at December 31, 2014, 2013 and 2012,
respectively, and 57 million barrels at January 1, 2012. Natural gas liquids net proved undeveloped reserves in the United States were 79%, 83% and 72% at
December 31, 2014, 2013 and 2012, respectively. Natural gas liquids net proved undeveloped reserves in Norway were 21%, 15% and 25% at December 31, 2014,
2013 and 2012, respectively.
(f) Natural gas production includes volumes used for fuel.
(g) Proved reserves in Norway were as follows:
Crude Oil, Condensate &
Natural Gas Liquids Natural Gas
2014 2013 2012 2014 2013 2012
(Millions of barrels) (Millions of mcf)
A
t January 1 ........................................................................................
.
256 284 293 198
219 388
R
evisions of previous estimates ..........................................................
.
(22) (21) — (33 ) (16) 1
E
xtensions, discoveries and other additions ......................................
.
32 — — 24 — —
Sales of minerals in place ...................................................................
.
— — (5) — — (165)
P
roduction ..........................................................................................
.
(10) (7) (4) (9 ) (5) (5)
A
t Decembe
r
31 ..................................................................................
.
256 256 284 180 198 219
N
et Proved Developed Reserves at Decembe
r
31 (d) ............................. 95 107 102 67 87 73
N
et Proved Undeveloped Reserves at Decembe
r
31 (e) ....................
.
161 149 182 113 111 146
(h) Natural gas reserves in Africa were 155 million mcf in 2014, 160 million mcf in 2013 and 142 million mcf in 2012.
Proved reserves are calculated using the average price during the twelve month period before December 31 determined as an
unweighted arithmetic average of the first-day-of-the-month price for each month within the year, unless prices are defined by
contractual agreements, excluding escalations based on future conditions. Crude oil prices remained at significantly higher levels
during the first ten months of 2014 and declined during the last two months of the year. As a result, the average crude oil price used to
calculate proved reserves at December 31, 2014 is significantly higher than the year-end 2014 crude oil price. The year-end 2015
reserve estimates will be based on the same unweighted arithmetic average formula using first-day-of-the-month prices for 2015 and
will reflect the current low crude oil price environment from the beginning of the year. If current strip crude oil prices hold through
2015, proved reserves at December 31, 2015 could be significantly lower than proved reserves at December 31, 2014. It is difficult to
estimate the magnitude of any potential net negative change in proved reserves that may result from lower crude oil prices as of
December 31, 2015, due to a number of factors that are currently unknown, including 2015 crude oil prices, any revisions in proved
reserves based on 2015 reservoir performance, the levels to which industry costs will decline in response to lower prices, and
management’s plans as of December 31, 2015 for developing proved undeveloped reserves through the year 2020 which will be the
five-year window for recognizing proved undeveloped reserves as of December 31, 2015.
In 2014, proved reserve additions in the United States were 115 million barrels of crude oil, 22 million barrels of natural gas
liquids and 184 million mcf of natural gas primarily from the Bakken oil shale play in North Dakota, Utica shale in Ohio and the Gulf
of Mexico. New wells completed in 2014 added proved reserves of 16 million barrels of crude oil, 5 million barrels of natural gas
liquids and 58 million mcf of natural gas. Other additions and revisions to proved reserves primarily relate to proved undeveloped
reserves which are discussed in further detail below.
In 2013, proved reserve additions in the United States were 179 million barrels of crude oil, 32 million barrels of natural gas
liquids and 131 million mcf of natural gas primarily from the Bakken oil shale play in North Dakota. New wells completed in 2013
added proved reserves of 19 million barrels of crude oil, 3 million barrels of natural gas liquids and 40 million mcf of natural gas. The
remaining proved reserve additions are due to new well locations, primarily relating to new wells to be drilled in the Bakken oil shale
play through 2018.
Proved Undeveloped Reserves
The December 31, 2014 oil and gas reserve estimates disclosed above include 508 million barrels of liquid hydrocarbons and
962 million mcf of natural gas, or an aggregate of 669 million barrels of oil equivalent (boe), classified as proved undeveloped
reserves. Total proved undeveloped reserves increased by 23 million boe compared with year-end 2013. Extensions, discoveries and
other additions (additions) and Revisions of previous estimates (revisions) to proved undeveloped reserves amounted to a net increase
of 157 million boe. Transfers to proved developed reserves were 110 million boe and dispositions of assets in Thailand and Indonesia
reduced proved undeveloped reserves by 24 million boe.