The 2004 results compare with 1.759 billion BOE a year earlier.
For the year 2004, Unocal added 150 million BOE to its reserves through discoveries and extensions, net purchases and sales, and performance, price and other revisions. The company produced 155 million BOE in 2004.
The company replaced 96 percent of its 2004 production through discoveries and extensions, net purchases and sales, and revisions. Excluding net purchases and sales, Unocal replaced 105 percent of its 2004 production. The calculation of both ratios is explained below.
The company added 199 million BOE from discoveries and extensions. Unocal also made 39 million BOE in negative price revisions attributable to changes in crude oil prices for reserves held under production-sharing contracts (PSCs). Other price revisions accounted for a 14 million BOE increase in the company's North American reserves. Purchases and sales amounted to a net reduction of 12 million BOE. All other revisions totaled a negative 12 million BOE.
"Our primary focus in 2004 was development and moving contracts forward on previous discoveries," said Charles R. Williamson, Unocal chairman and chief executive officer. "We recorded major bookings in Bangladesh and the Caspian Sea as contracts were signed and development projects were approved. In addition, we added reserves from discoveries in Thailand, the Permian Basin and Canada."
The discoveries and extensions were primarily from the sanctioning of the Bibiyana development in Bangladesh and the Phase III development by the Azerbaijan International Operating Company (AIOC) in the Caspian Sea, and additional reserves of the company's Unocal Thailand, Pure Resources and Northrock operations.
Worldwide, Unocal's finding, development and acquisition (FD&A) cost ratio, as explained below, was $11.09 per BOE.
In 2004, the company promoted approximately 135 million BOE from proved undeveloped to the proved developed category.
Under foreign PSC arrangements in Indonesia, Myanmar, Azerbaijan (AIOC), Bangladesh, and the Democratic Republic of the Congo, net entitlement reserves to the contractor (Unocal) increase as oil and/or gas prices decline and decrease when they rise. Benchmark crude oil prices rose from $32.55 per barrel at year-end 2003 to $43.46 per barrel at the end of 2004. The price increase resulted in approximately 39 million BOE negative revisions in Unocal's reserves under PSCs because fewer equivalent barrels are required to reimburse the company for its costs. The higher prices resulted in 14 million BOE of positive revisions in non-PSC countries because the company's estimates of commercially recoverable resources increased under those economic conditions.
Unocal preliminary estimated proved reserves of crude oil and natural gas (MMBOE) As of December 31, 2003 1,759 Discoveries and extensions 199 Revisions -- PSC price-related (39) -- Other price-related 14 -- All other revisions (12) Purchases & sales (net) (12) Total 2004 changes 150 Production (155) As of December 31, 2004 1,754
Explanation of Ratios
Certain ratios described in this news release were calculated based on information included in the table immediately above and in the table referred to under "Reserve details." The reserve replacement ratio of 96% was calculated by dividing the sum of changes (revisions of estimates, improved recovery, discoveries & extensions and net purchases and sales) to estimated proved oil and gas reserves during 2004 by Unocal's 2004 production of 155 million BOE. The reserve replacement ratio of 105% was calculated by dividing the sum of changes to reserves as noted above, other than from purchases and sales of reserves volumes, by the 2004 production. The FD&A cost ratio was calculated by dividing the sum of the components of property acquisition, exploration (finding) and development costs by the total BOE of proved reserves added (discoveries and extensions plus improved recovery, revisions and purchases). 14. TGS Imaging Expands Research and Development Program TGS Imaging, the processing and imaging arm of TGS-NOPEC Geophysical Company is expanding its research and development efforts in data processing and software development. Leading this effort will be the company's new Vice President of R&D, Young Kim, Ph.D.
Dr. Kim, a twenty-four year veteran of geophysical research, will work closely with TGS' clients in developing advanced processing solutions. His leadership and experience will increase the capabilities of the TGS Imaging research group, credited with the original introduction of wave equation and tomography processing techniques.
Young Kim comes to TGS Imaging from ExxonMobil Exploration where he was a technical advisor on special projects for subsurface depth imaging. Previously Dr. Kim was the Research Supervisor for the Seismic Processing Research Section at ExxonMobil Upstream Research. Dr. Kim holds three patents related to seismic processing technology and has contributed to more than 20 published articles.
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