ConocoPhillips reported 2007 preliminary net proved reserve additions of 1.338 billion barrels of oil equivalent (BOE), including equity affiliates. The company's reserve replacement ratio was 159 percent, based on 842 million BOE of production. The amounts above exclude 16 million BOE of 2007 Venezuelan production and 1.089 billion BOE of reserves associated with the expropriation of the company's Venezuelan oil projects. The reserve replacement ratio including the impact of the expropriation was 29 percent. ConocoPhillips' total proved reserves at year-end 2007 were 10.6 billion BOE.
ConocoPhillips' organic reserve replacement ratio, which excludes sales, acquisitions, and the Venezuela impacts noted above, was 122 percent. Sales of reserves during the year were related to producing assets sold as part of the company's asset rationalization program. Acquisitions were mainly Canadian oil sands reserves associated with the upstream EnCana business venture.
Year-end proved reserves exclude 0.2 billion barrels associated with the company's Canadian Syncrude operations. U.S. Securities and Exchange Commission (SEC) regulations define the company's Syncrude operations as mining related; therefore, these operations are not reported as part of the company's oil and gas proved reserves.
Total reserve additions, including revisions, improved recovery, purchases, and extensions and discoveries, were 1.433 billion BOE. Costs incurred, as defined by Statement of Financial Accounting Standards No. 69 (SFAS No. 69), are expected to be $16.292 billion. The company's five-year average reserve replacement was 176 percent and its estimated five-year average finding and development cost per BOE was $10.11.
"In 2007, we advanced several key projects that positively impacted the company's reserves, including projects in the U.S. Lower 48, Alaska, Qatar and the Asia Pacific region," said John Lowe, executive vice president of Exploration and Production. "In addition, reserves improved as a result of our business venture with EnCana and our equity ownership in LUKOIL. We remain committed to sustaining our production and proved reserve base over the long-term, and we will strive to do so at a competitive finding and development cost."
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