Energy industry grows revenues, reserves, Ernst & Young study says

The U.S. oil and gas industry saw growth in many categories in 2011, Ernst & Young?s annual U.S. E&P benchmark study says.

The U.S. oil and gas industry saw growth in many categories in 2011, Ernst & Young?s annual U.S. E&P benchmark study says.

Oil reserves increased 9 percent to 20.3 billion barrels in 2011, much of which Ernst & Young attributes to extensions and discoveries of 2.4 billion barrels, the highest level in five years. Oil production also increased 3 percent to 1.4 billion barrels.

Natural gas reserves increased 4 percent to 178.2 trillion cubic feet, and gas production jumped 9 percent to 12.9 trillion cubic feet.

Combined exploration and development spending was up 38 percent to $106.1 billion, much of which went into identifying new resources and developing existing reserves, as total capital expenditures were down 16 percent. Of the companies surveyed, 96 percent increased their capital budgets for exploration and development spending in 2011.

Revenue increased 23 percent to $181.4 billion, driven by strong oil prices, and after-tax upstream profits were up 21 percent to $45.6 billion. U.S. production costs increased 27 percent.

"The year-over-year growth in U.S. reserves is impressive," Marcela Donadio, Americas oil & gas sector leader for Ernst & Young, said in a statement. "Increases in exploration and production budgets in light of new potential resources create a very positive outlook for future production potential."

Olivia Pulsinelli is the web producer for the Houston Business Journal's award-winning website.

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