# Presentation: 685169

## THE GULF OF MEXICO:RISING STAR OR OVER THE HILL?

**by**
**Richard Nehring**
**NRG Associates**
**The Natural Gas Frontier: 2015 and Beyond**
**Annual Energy Outlook 2001 Conference**
**March 27, 2001**

## IMPLICATIONS OF THE RISING STAR CASE

**1999-2015 Reserve Additions of 126 Tcf**
**	****•****	****71% of 1998 GOM EUR of 177.3 Tcf**
**1999-2015 Average Reserve Additions of 7.4**
**      ****Tcf/year**
**	****•****	****2011-2015 Average Reserve Additions of ****	****8.5 Tcf/year**
**	****•****	****Compare to 1983-1998 Average of 4.3 ****	****Tcf/year**

## THE BASIC METHODOLOGY OF THE RISING STAR CASE

**“****If you drill them (wells),**
** ****it (increased production) will come.”**

** ****a.k.a. “The Gas Field of Dreams” approach to gas supply forecasting**

## Fundamentals of Gulf of Mexico Gas Resources

**The U.S. Gulf of Mexico is a World Class Gas Province**
**	****•****	****177.3 Tcf known recovery as of the end of 1998**
**	****•****	****One/sixth of total U.S. known gas resources**
**	****•****	****Second only to the adjacent onshore Gulf**
**	****	****Coast Basin**
**	****•****	****Concentrated on OCS Shelf**
**	****	****•****	****OCS Shelf****	****	****-****	****146.1 Tcf**
**	****	****•****	****State Shelf****	****	****-****	****  22.7 Tcf**
**	****	****•****	****OCS Deepwater ****	****-****	****    8.5 Tcf**

## Fundamentals (2)

**Gulf of Mexico Gas Resources are Concentrated in Large Fields**

** **

**  ****The Gulf of Mexico thus Differs from most**
**  ****other World Class Petroleum Provinces**

## Fundamentals (3)

**Large and Giant Fields Are Discovered Early in the Exploration Process**
**Discoveries of Large Gas Fields in the Gulf of Mexico by Decade**

## Fundamentals (4)

**Less than half of all discoveries made by 1979, but 80% of all large discoveries**
**1980’s and 1990’s large discoveries are mostly deepwater (and mostly casinghead gas); large shelf discoveries were predominantly deep Norphlet and eastern Main Pass**

## How the Past Will Shape the Future: The Shelf

**Recent High Rates of Reserve Additions**
**	****•****	****31.0 Tcf from 1983 to 1990**
**	****•****	****27.2 Tcf from 1991 to 1998**
**New Field Discoveries are Diminishing**
**	****•****	****30% of reserve additions from 1983-****	****	****1990**
**	****•****	****16% of reserve additions from 1991-****	****	****1998**

## The Shelf (2)

**Both the Number and the Average Size of New Field Discoveries are Decreasing**
**Shelf Reserve Additions Maintained in 1990’s by Reworking Old Fields With 3-D Seismic**
**	****•****	****How Much More Is Possible?**
**	****•****	****What is the Potential Below 15,000 ft?**

## How the Past Will Shape the Future: Deepwater

**More Amounts of Petroleum Being**
**      ****Discovered**
**	****•****	****More than 165 Fields with 15 billion ****	****	****BOE**
**But Mostly Liquids (70%), Not Gas (only**
**      ****30%)**
**Liquids Becoming Increasingly**
**      ****Predominant in Past Five Years**
**Most of Deepwater Now Established as**
**	****  ****Oil-Prone**

## Projected GOM Gas Reserve Additions, 1999-2015 (Tcf)

**Implies continued high rates of annual reserve additions**
**	****•****	****4.2 Tcf/year in the low case**
**	****•****	****6.6 Tcf/year in the high case**
**These rates accelerate in the next 4 to 8 years, then decline as opportunities are depleted**

## Slide 13

## Conclusions

**Rising Star Through 2005**
**Over the Hill by 2007-2012**
**Timing of the Latter Unlikely to be Apparent Until 2005**
**Domestic Gas Supply Planners Cannot Rely on Gulf of Mexico For an Indefinite Future**