AN ASSESSMENT OF THE

UNDISCOVERED HYDROCARBON

POTENTIAL OF THE

NATION'S

OUTER CONTINENTAL SHELF
TABLE OF CONTENTS

FOREWORD

ABBREVIATIONS USED

ACKNOWLEDGMENTS

INTRODUCTION

COMMODITIES ASSESSED

LIST OF TERMS

METHODOLOGY

Assessing Undiscovered Conventionally Recoverable Resources

Assessing Undiscovered Economically Recoverable Resources

LIMITATIONS OF RESOURCE ASSESSMENT

AREAS ASSESSED

Alaska OCS

Atlantic OCS

Gulf of Mexico OCS

Pacific OCS

ASSESSMENT RESULTS

RESERVES AND RESERVES APPRECIATION

TOTAL OCS POTENTIAL

COMPARISON WITH PREVIOUS ASSESSMENTS

REFERENCES

APPENDIX—ASSESSED RESOURCES FOR REGIONS AND PROVINCES

FIGURES

 1. MMS Assessment Process

 2. Four OCS Regions of the United States
 3. Assessed Provinces of the Alaska OCS

 4. Assessed Provinces of the Atlantic OCS

 5. Assessed Provinces of the Gulf of Mexico OCS

 6. Assessed Provinces of the Pacific OCS

 7. Undiscovered Conventionally Recoverable Oil Resources—Low and High Resource

Case

 8. Undiscovered Conventionally Recoverable Oil Resources—Mean Resource Case

 9. Undiscovered Conventionally Recoverable Natural Gas Resources—Low and High

Resource Case

10. Undiscovered Conventionally Recoverable Natural Gas Resources—Mean Resource

Case

11. Total OCS Oil

12. Total OCS Natural Gas

13. Alaska OCS Resources and Reserves

14. Atlantic OCS Resources

15. Gulf of Mexico OCS Resources and Reserves

16. Pacific OCS Resources and Reserves

17. Changes in Mean Estimates of OCS Undiscovered Conventionally Recoverable

Resources from the 1987 to 1995 Assessment

TABLES

 1. Estimates of Undiscovered Conventionally Recoverable Resources for the OCS

 2. Estimates of Mean Undiscovered Economically Recoverable Resources for the OCS 

 3. Estimates of OCS Oil and Natural Gas Reserves and Production as of January 1, 1995

 4. Total OCS Oil and Natural Gas Conventionally Recoverable Resources and Reserves

Potential
FOREWORD

The results presented in this report represent an estimation of the undiscovered hydrocarbon

resource potential of the Outer Continental Shelf of the U.S. It is important to keep in mind

that this assessment estimates the natural gas and oil resources that have yet to be discovered

and thus are not currently available for production or consumption. The estimates represent

potential resources for future development, depending on the economic assumptions and

geologic interpretations. The estimation is based on numerous assumptions, and available

data at the time of assessment. The new methodology, utilized for this assessment, represents

an advancement over previous assessments. The present methodology incorporates many of

the recommendations forwarded by the National Academy of Sciences, Association of

American State Geologists, and others. The Minerals Management Service appreciates and

acknowledges the contributions of these professional groups. However, we understand that

alternative interpretations can be made of the same data and, consequently, differing estimates

of the resources can be obtained. Thus, any interpretation of these results must be carefully

considered in light of assumptions and judgments made. Care must also be used in comparing

results of this assessment with the previous assessments of the same areas. Any changes in

“risk” factors, whether it is economic or geologic, and modelling assumptions may result in

significantly different resource estimates.
ABBREVIATIONS USED

AASG Association of American State Geologists

API American Petroleum Institute

Bbbl Billion Barrels

BOE Barrels of Oil Equivalent

DIST Distribution of Possible Field Sizes

EIA/DOE Energy Information Administration, U.S. Department of Energy

GRASP Geologic Resource Assessment Program

Mcf Thousand Cubic Feet

MMS Minerals Management Service

NAS National Academy of Sciences

OCS Outer Continental Shelf

PETRIMES Petroleum Exploration and Resource Evaluation System

PRESTO Probabilistic Resource Estimates, Offshore

Tcf Trillion Cubic Feet

USGS U.S. Geological Survey
ACKNOWLEDGMENTS

A work of this nature originates from numerous sources. The geologic assessments resulted

from a Bureauwide effort by geoscience professionals in the Minerals Management Service

Resource Evaluation Program both at headquarters and in the Alaska, Gulf of

Mexico/Atlantic, and Pacific regional offices.

Dr. Richard M. Procter (R.M. Procter Enterprises, LTD, Calgary, Alberta, Canada) and 

Dr. David A White (consultant on prospect and play assessment, Austin, Texas) are

acknowledged for the adaptation and implementation of the methodology used in this

assessment.
INTRODUCTION

This report presents the results of a multiyear effort by the Department of the Interior's

Minerals Management Service (MMS) to assess the undiscovered crude oil and natural gas

resources of the Nation's Outer Continental Shelf (OCS) areas. The OCS comprises the

submerged offshore lands of the United States. This study was performed concurrently with

an effort by the U.S. Geological Survey (USGS) to assess the undiscovered oil and natural gas

resources of the onshore areas of the United States and the adjacent waters within the

boundaries of the coastal States. The results presented herein reflect information and data

available to the MMS as of January 1, 1995.

The current assessment estimates the undiscovered conventionally recoverable oil and natural

gas resources located outside of known oil and gas fields on the OCS. The assessment

considers recent geophysical, geological, technological, and economic information and uses a

play analysis approach of resource appraisal.

Since its formation in 1982, the MMS has completed three systematic assessments of Federal

OCS undiscovered oil and natural gas resources. The results of the first such assessment and

the methodologies used to develop these estimates were published in 1985 (Cooke, 1985). 

For the second assessment, the MMS and USGS agreed to conduct a joint reassessment of the

United States—both onshore and offshore—to provide the Department of the Interior (DOI),

Congress, and other public and private organizations with estimates reflecting consistent

timeframes. The results of this first National Assessment were published in 1989 (DOI,

1989). The MMS then released more detailed results about the OCS in a separate report

(Cooke and Dellagiarino, 1990). Finally, MMS published revised OCS estimates in 1991 to

reflect revisions for five OCS areas based upon new information and additional geologic

mapping activities (Cooke, 1991). These revised estimates were developed to support the

analyses for the 1992-1997 OCS leasing program.

Following the first MMS assessment, a National Academy of Sciences (NAS) panel reviewed

MMS's resource assessment and resource estimation methodologies and recommended certain

changes for future assessments. Similarly, the NAS panel reviewed the MMS procedures

used in the second assessment. Panels from the Association of American State Geologists

(AASG), the American Petroleum Institute (API), and the Energy Information Administration

of the U.S. Department of Energy (EIA/DOE) also reviewed the second assessment and

published recommendations.

To implement these technical recommendations and better address the needs of MMS

planners and decisionmakers, the MMS initiated a search for a better methodology in 1991. 

The objective was to establish a method for assessing resources that maintains the strong

points of earlier methodologies, uses the fullest extent of available geological and geophysical

data provided by industry and generated by the MMS, and yet allows for flexibility in the

application of the geologist’s interpretation.
The available methods of estimating oil and natural gas resources for an area are many and

differ significantly. However, these methods can be broadly grouped into two categories: (1)

analytical discovery process models and (2) subjective methods. Analytical discovery process

models are based on or derived primarily from Arps and Roberts (1958) and from Barouch

and Kaufman (1978) methods reviewed by Herbert (1982). These models require information

on the number and size of fields or pools discovered in a region. Consequently, discovery

process models provide reliable results only in mature areas with a significant number of

discoveries. The subjective methods, which vary widely in precision and meticulousness,

range from purely geologic analogy and Delphi methods to more rigorous play analysis

(White and Gehman, 1979) and probability methods. They rely less on historical records of

exploration efforts and discovery records but rely more on descriptive geologic characteristics

of a province, basin, or play. The quantities of undiscovered oil and natural gas are then

estimated by quantifying reservoir variables and estimating the number of pools expected to

be discovered. In this method, a thorough analysis of the subjective probabilities (risks) of

occurrence of variables responsible for the formation, migration, trapping, and preservation of

hydrocarbons at a play, basin, or province level is critical. 

The Petroleum Exploration and Resource Evaluation System (PETRIMES), a probabilistic

play analysis (subjective method) model, currently used by the Geological Survey of Canada

(Lee and Wang, 1984), was chosen by MMS to be the basic platform for the present

assessment of the undiscovered conventionally recoverable resources. Most of the resource

assessment models currently used by industry and other government agencies provide

estimated resources in aggregated numbers representing total resources as a distribution. 

However, to support MMS planning and decisionmaking related to OCS exploration and

development, a knowledge of the potential number and size of undiscovered pools is essential

(Lee and Wang, 1984). Unlike most models reviewed by MMS (including the Probabilistic

Resource Estimates, Offshore—PRESTO—model used by MMS in previous assessments),

PETRIMES attributes include the assessment and reporting of the: 

number of pools that remain to be discovered;

size range of the undiscovered pools;

reservoir characteristics of the undiscovered pools;

pool size distributions that relate to geologic model; and

resource data in a manner suitable for economic analyses.

The iterative application of the PETRIMES was viewed as a highly desirable feature because

it provided interim feedback to allow the assessors to confirm the geologic concepts

envisioned, and, in areas with discovered pools, it allowed for the explicit incorporation of

observed play characteristics. The PETRIMES, however, was designed to assess a single

commodity play, such as an oil play or a natural gas play. Because OCS plays are, in many

cases, mixed plays containing both oil and natural gas pools and because a separate estimation

of both liquid (condensates and oil) and natural gas (associated natural gas and nonassociated

natural gas) phases is required for an accurate economic evaluation, the MMS modified

PETRIMES for OCS resource estimation. The modified version is called the Geologic

Resource Assessment Program (GRASP). 
Likewise, MMS modified the PRESTO model, used in previous MMS assessments, to accept

the GRASP outputs for the number and sizes of pools to determine the economically

recoverable resources at the geologic basin level and higher. As an improvement to

estimating resources for one or two specific price paths, as done in previous MMS

assessments, the current assessment estimates economically recoverable resources over a

range of specific fixed prices. These results are then reported as a continuous price-supply

curve depicting the resultant price-resource relationships for geologic basins, provinces, or

other areas being studied. (See the appendix for price-supply curves for each OCS

region/subregion and province.)

This report therefore presents the assessment results and general economic information for

each of the Nation's four OCS regions: Alaska, Atlantic, Gulf of Mexico, and Pacific. More

detailed information about the geology, assessment methodology, economics, and results on a

play level will be published in separate regional assessment reports.

COMMODITIES ASSESSED

The assessed commodities for the OCS include crude oil and natural gas present in

conventional reservoirs; unconventional resources (such as clathrates) were not assessed. In

this assessment, natural gas present as natural gas caps associated with oil reservoirs,

dissolved natural gas present in solution in crude oil, and nonassociated natural gas are

reported as natural gas. Condensate, which is the liquid drawn from produced free natural

gas, is combined with crude oil in reporting the results of this assessment.

Reserves were not estimated specifically as a part of this assessment. The MMS, however,

assesses and publishes reserves estimates annually for fields of the Gulf of Mexico OCS and

the Pacific OCS. The reserves estimates in this assessment are obtained from those reports. 

The amount of oil and natural gas likely to be added to known fields (reserves appreciation)

has also been estimated and reported where supportable in this assessment.

Estimates of undiscovered resources are presented in two categories:

undiscovered conventionally recoverable resources

undiscovered economically recoverable resources

Undiscovered conventionally recoverable resources refer to quantities of hydrocarbon

resources expected to be present, as of the date of assessment, in undiscovered pools within a

play, using technology and exploration and development efficiency available or reasonably

foreseeable at the time of the assessment. No explicit consideration for economic viability

was implied in the estimation of the undiscovered conventionally recoverable resources.

Undiscovered economically recoverable resources are the portion of undiscovered

conventionally recoverable resources that can be explored, developed, and commercially

produced at given cost and price considerations using present or reasonably foreseeable
technology. The estimates of economically recoverable resources are presented as continuous

curves of resource values corresponding to changing oil/natural gas prices.

LIST OF TERMS

The following is a description of terms used in this report.

Field: An accumulation of hydrocarbons. A field represents an area consisting of a single

pool or a group of pools related to the same geological structure/stratigraphic feature.

Hydrocarbon Potential: Quantity of undiscovered hydrocarbons inferred to be present in a

play basin, province, or area.

Marginal Probability of Hydrocarbons: An expression, usually a decimal fraction, of the

likelihood that an oil/natural gas accumulation may be present in a prospect, play, basin,

province, or area.

Play: A group of pools that share a common history of hydrocarbon generation, migration,

reservoir development, and entrapment. A play is classified based on availability of data,

stages of hydrocarbon detection and discovery, and degree of confidence in the play concept

as established (significant data and discoveries), frontier (limited data and detection), or

conceptual (minimal data).

Pool: A discovered or undiscovered accumulation of hydrocarbons, typically within a single

stratigraphic interval.

Price-Supply Curves: A plot showing volumes of undiscovered economically recoverable

resources at various oil or natural gas prices. As price increases, the amount of economically

recoverable resources increases, thus approaching the undiscovered conventionally

recoverable resources.

Prospect: A geologic feature having the potential for trapping and accumulating

hydrocarbons. (A potential undiscovered pool/field.)

Proved Reserves: Reserves that can be estimated with reasonable expectation to be

recoverable with existing technology under current economic conditions, such as prices and

costs prevailing at the time of the estimate.

Reserves: Hydrocarbon resources that have already been discovered and may be commercially

recoverable under reasonably foreseeable economic scenarios.

Reserves Appreciation: A term synonymous with reserves growth and inferred

reserves/indicated reserves. Reserves appreciation refers to the expected increase in estimates
of proved reserves as a consequence of extension of known pools or discovery of new pools

within existing fields or through the application of improved recovery techniques.

Resource Endowment: Resources that include undiscovered conventionally recoverable

resources, remaining reserves, cumulative production, and reserves appreciation.

Undiscovered Conventionally Recoverable Resources: The portion of the hydrocarbon

potential that is producible, using present or reasonably foreseeable technology, without any

consideration of economic feasibility.

Undiscovered Economically Recoverable Resources: The portion of the undiscovered

conventionally recoverable resources that is economically recoverable under imposed

economic scenarios.

Unproved Reserves: Reserves based upon geologic or engineering information similar to that

used in estimates of proved reserves, but technical, contractual, economic, or regulatory

uncertainties preclude them being classified as proved.

METHODOLOGY

This assessment began with the geologic analyses of the OCS areas using the extensive library

of public and proprietary data available to MMS assessors. These data include seismic data

and interpretations, well log data and interpretations, petrophysical and geochemical data,

geologic maps and cross sections, and resources available to MMS through its Federal

regulatory responsibilities for OCS resource management. In cases where data were not

available or sparse, geologically analogous areas were studied and the geologic properties of

those areas were used. These analyses resulted in the identification of specific geologic plays,

which form the basis of this assessment.

For the purpose of the current assessment, the geologic plays are classified into three groups

based on the level of exploration and discovery history:

Established Plays

Frontier Plays

Conceptual Plays

Assessing Undiscovered Conventionally Recoverable Resources

The general methodology of assessing oil and natural gas resources for the three types of plays

using GRASP is similar. A simplified diagram of the assessment process is presented in

figure 1. The basic steps are listed below.

1. Compile play data.
2. Generate prospect (pool) size distribution from probabilistic distribution of reservoir

parameters.

3. Generate a number of pools distribution.

4. Determine individual oil, natural gas, and mixed pool sizes by rank.

5. Establish individual pool size rank conditional to discovery data.

6. Generate play potential resources distribution.

In recognition of the differences in the extent of data and information available among the

OCS areas (attributable mostly to the degree of past exploration and development activities),

some variances in the use of GRASP modules and procedures were incorporated. The frontier

and conceptual plays, where available data are sparse and good analogs not identified, are

analyzed through the subjective probability method used by GRASP. In this method,

individual distributions of input variables are subjectively prepared and, through GRASP,

ranked pool size distributions are generated. Most plays in the Alaska OCS and some in the

Pacific OCS were analyzed this way. In the case of frontier plays where the assessors feel

confident that an analog exists, such as in the Atlantic OCS, the analysts can generate a pool

size distribution from the statistical parameters of the appropriately scaled ranked pool size

distribution of the analog plays and can estimate the play resources using GRASP.

For established plays, such as in the Gulf of Mexico and in southern California where

significant amounts of pool data are available from discovered fields, a pool size distribution

curve for a play can be generated from the distribution of discovered pools.

The estimates of undiscovered oil and natural gas resources attributed to basins, provinces,

regions, or other areas are derived by statistically aggregating the play level potential resource

distributions of the plays of that area.
Create Input Distributions

for Reservoir Parameters Distribution

Create Ranked

Pool Size

Distribution

MATCH Existing Discoveries

with Ranked Pool Size

Distribution

Calculate Conventionally

Recoverable Resources

Calculate

Calculate Costs

Calculate Economically

Producible Resources at

Various Oil & Gas Prices

GRASP PRESTO

Production/Pool

Create No. of Pools

Figure 1. MMS Assessment Process

Assessing Undiscovered Economically Recoverable Resources

The ranked pool size distributions (generated by GRASP) and geologic risk factors are the

basic geologic inputs into the PRESTO model. The costs of exploration, development, and

transportation, as well as tariffs based upon logical exploration, development, production, and

transportation scenarios, were estimated for each OCS region, province, basin, or other

operational subarea where activities, costs, or other circumstances warrant. Estimates of

economically recoverable resources are then derived for a specific price by (1) subjecting the

plays’ pool size distribution to multiple computer iterations simulating the drilling of the

hydrocarbon prospects associated with the plays; (2) determining which pools and sizes are

simulated to be discovered on each iteration; and (3) determining a discounted-cash-flow

analysis for the plays’ discovered resources using specified economic parameters. The

resources that would exceed the economic hurdles are then totaled and become one data point

on the price-supply curve. The process is repeated for numerous prices, and a continuous

distribution curve is then generated. (For a more detailed description of the PRESTO model’s

functions, refer to Cooke and Dellagiarino, 1990.)

The Gulf of Mexico, the Atlantic, and certain portions of the Pacific OCS Regions contain

stacked plays (i.e., plays overlie other plays at different depths). In determining the economic
viability of such plays, assessors needed to consider the concurrent exploration, development,

and production of possible pools in these plays. Otherwise, the estimates would be overly

conservative. The specific procedures used to evaluate the stacked plays will be presented in

the regional assessment reports.

The current estimates of undiscovered economically recoverable OCS oil and natural gas

resources were developed using the following criteria:

Flat prices (no real price changes)

12-percent discount rate (after tax rate-of-return)

12.5-percent or 16.7-percent royalty rate

35-percent tax rate

3-percent inflation rate

Cost of exploration, development, and transportation, and tariffs with their associated

development scheduling scenarios for each OCS region and portions of regions when

conditions warrant

Natural gas prices related to oil prices at 66 percent of the oil-energy equivalent

LIMITATIONS OF RESOURCE ASSESSMENT 

The NAS review panel, which studied the 1987 MMS assessment, succinctly expressed the

limitations that every resource assessment must recognize. The limitations, summarized

below, also apply to the present assessment (National Research Council, 1991).

Estimates of undiscovered oil and natural gas resources are just ESTIMATES.

Estimates should be viewed as a snapshot at a point in time based on existing data,

information, and methodology.

Although play analysis is universally regarded as the best way to assess petroleum

resources, other factors contribute to the uncertainty of the estimation, including 

(1) the subjective judgment of the analysts and (2) the fact that assessors must make

assumptions in estimating the probability of occurrence and magnitude of numerous

geologic factors essential for the accumulation of oil and natural gas. 

An assessment is as good as the basic data used. Needed data may be unavailable or

may not exist, change constantly, or may be subject to the interpretative skills of the

assessors.

Changing technology, which is difficult to quantify, greatly impacts the resource

assessment.

Actual drilling operations are necessary to confirm the presence of oil or natural gas.

Specific quantities of oil or natural gas are known only after pools have been produced

and depleted.
Atlantic

OCS

Gulf of Mexico

OCS

Pacific

OCS

Alaska OCS

 Figure 2. Four OCS Regions of the United States

AREAS ASSESSED

For this assessment, the Nation's OCS is divided into four regions: Alaska, Atlantic, Gulf of

Mexico, and Pacific OCS (fig. 2). These regions were subdivided by the regional assessment

teams into assessment provinces, defined on geologic affinities, and these provinces were

further subdivided into basins or geographic areas. 

Alaska OCS

The Alaska OCS Region includes the Arctic, Bering Shelf, and Pacific Margin subregions of

the Alaska Federal offshore, a vast area encompassing 17 assessment provinces. Assessment

provinces that offer potential for undiscovered conventionally recoverable oil and natural gas

resources are confined to the 11 provinces comprising the continental shelves surrounding

Alaska (fig. 3). The Arctic subregion includes the Beaufort Shelf, Chukchi Shelf, and Hope

Basin assessment provinces. Most of the conventionally recoverable resource potential lies

within the Chukchi Shelf and Beaufort Shelf provinces. These lie adjacent to the onshore

Arctic Alaska oil and natural gas province. Daily production in this onshore province was

about 1.5 million barrels of oil in 1995, and original oil reserves (including cumulative

production and proved reserves) were estimated at 16.4 billion barrels. Aside from the onshore

Arctic Alaska province, the only other significant production is in State waters of Cook Inlet,
Arctic Subregion

Bering Shelf Subregion

Pacific Margin Subregion

North

Aleutian

Basin

ALASKA

Beaufort

Shelf

Chukchi

Shelf

Hope

Basin

Norton

Basin

St. Matthew

Hall

Narvarin

Basin

St. George

Basin

ShumaginKodiak Shelf

Gulf of

Alaska Shelf

Cook

-

Figure 3. Assessed Provinces of the Alaska OCS

near Anchorage on the Pacific Margin of Alaska. The Bering Shelf subregion includes Norton

Basin, Navarin Basin, St. Matthew-Hall Basin, St. George Basin, and North Aleutian Basin

assessment provinces. The Pacific Margin subregion includes Shumagin-Kodiak Shelf, Cook

Inlet, and Gulf of Alaska Shelf assessment provinces. Within these 11 offshore provinces

assessed, oil and natural gas resources were estimated for 74 exploration plays.

Atlantic OCS

Areas of potential discovery for the Atlantic OCS Region extend from the U.S.-Canada border

to the Blake Plateau (fig. 4). Mesozoic strata of Middle Jurassic through Lower Cretaceous

age are the only sediments that indicate any significant hydrocarbon potential. Mesozoic

Province sediments of Middle Cretaceous age and younger were not assessed because of

limited thickness and lack of reservoir quality sands, making these sediments poor

hydrocarbon targets. The Southeast Georgia Embayment was also not assessed, owing to the

thin, organically lean, and thermally immature sedimentary section. Also, there is an absence

of Jurassic source rock in the area. Potential traps are related to folded structures, faults

(normal and growth), and permeability pinchouts against nonporous shales, mudstones,

evaporites, and carbonates. Eleven plays were identified in the province, all of which are

frontier or conceptual, and, therefore, require reservoir and production data from analogs for

assessment analysis. The drilling of 49 wells in the province has resulted in a single

subeconomic discovery in Upper Jurassic-Lower Cretaceous sediments in the Baltimore

Canyon area. Of the 11 plays, 6 conceptual plays were not assessed due to poor petroleum

potential, but 2 frontier and 3 conceptual plays were assessed. The region has a greater

potential for natural gas discoveries than oil. 
FL

GA

NC

SC

VA

MD

DE

NJ

NY

CT

RI

MA

NH

ME

Georges Bank

Baltimore Canyon

Carolina Trough

Southeast Georgia

Embayment

Blake Plateau

Mesozoic Province

Atlantic Ocean

 Figure 4. Assessed Provinces of the Atlantic in OCS

Gulf of Mexico OCS

In the Gulf of Mexico OCS Region, the Texas and Louisiana shelf (fig. 5) and slope are

characterized by massive amounts of clastic materials (silts, clays, and sands) that were

deposited largely during the Cenozoic. In the eastern Gulf of Mexico, the continental margin

is dominated by a thick accumulation of carbonate rock and evaporite deposits of the

Mesozoic. These two distinct sedimentary environments provided the basis for the two

provinces of the Gulf of Mexico OCS Region, the Cenozoic Province and the Mesozoic

Province. Sixty-one individual plays within the Gulf of Mexico OCS have been defined and

described, with 57 of these having been formally assessed. Two conceptual Mesozoic plays

were not assessed due to low potential, and two Cenozoic established plays were not assessed

due to limited occurrence.

Initially, exploration in the region targeted oil, but recent discoveries have tended to be

predominately natural gas. This mixture of hydrocarbon types is reflected in the predicted

volumes of oil and natural gas. As of January 1, 1995, there were 876 proved fields—157

fields were classified as oil and 719 as natural gas. Included in this number are the 133 fields
TX

LA MS AL

FL

GA

Mexico

Gulf of Mexico

Figure 5. Assessed Provinces of the Gulf of Mexico OCS

that are depleted and abandoned. In addition, there are 77 unproved active fields (Melancon

et al., 1995). The Cenozoic Province covers an area from the U.S.-Mexico maritime boundary

to the Federal waters of offshore Florida. The 50 assessed plays of the province (48

established, 1 frontier, and 1 conceptual) have been defined by geologic age and depositional

environment (Lore and Batchelder, 1995). In the Cenozoic Province, 867 proved fields have

been discovered. The Mesozoic Province extends from the Mississippi, Alabama, and Florida

State-Federal boundaries to the vicinity of the U.S. international boundary with Cuba and the

Bahamas. Approximately 125 offshore wells have been drilled to test the Mesozoic plays in

the Gulf of Mexico since exploration began in the early 1960's. Of the nine plays of this

province, seven were assessed (two established, four frontier, and one conceptual). The others

were believed to have little potential for hydrocarbon accumulations. The province has a

greater potential for additional natural gas discoveries to the northwest and greater potential

for oil off of southwest Florida. 

Pacific OCS

The Pacific OCS Region includes the Federal offshore of the States of Washington, Oregon,

and California, encompassing six assessment provinces in an area of complex geology along a

tectonically active crustal margin (fig. 6). Cenozoic deposition, volcanism, folding, and

faulting have created environments favorable to the generation, accumulation, and entrapment
WA

OR

CA

Pacific

Northwest

Province

Central

California

Province

Pacific Ocean

Province

Outer Borderland

Province

Inner Borderland

Basin & Province

Santa Barbara - Ventura

Basin & Province

Los Angeles

 Figure 6. Assessed Provinces of the Pacific OCS

of hydrocarbons. The Pacific Northwest Province is composed of a thick sequence of shelf

sediments above an active convergent tectonic margin. Its geologic history for the last 20-30

million years is quite distinct from the remainder of the Pacific OCS Region, which has

during that time changed from a convergent to a transverse tectonic margin. The five

provinces composing the central and southern Pacific OCS Region include basins that vary in

water depth from shallow (less than 500 feet deep) to deep (greater than 3,000 feet deep). 

Many of these basins include thick sequences of siliceous shales, which are a prolific source

as well as reservoir for hydrocarbons. Included within this region are the Santa Barbara -

Ventura and Los Angeles Basins, which include some of the thickest sequences of Cenozoic

sediments and the greatest concentration of hydrocarbon deposits (on a per cubic-mile basis)

anywhere in the world. In the southern California OCS proven hydrocarbon accumulations

have been discovered in 38 fields. 

Within the six assessment provinces, 50 plays were defined. Of these, 46 were assessed, but 

insufficient information was available to assess the remaining 4 plays. However, the existing

information suggests they are not important contributors to the Pacific regional resource

endowment.
ASSESSMENT RESULTS

Estimates of the undiscovered conventionally recoverable oil and natural gas resources for the

OCS resulting from this MMS assessment are presented in table 1 for the four OCS regions

and total OCS. The estimates reflect the geologic data and information available to MMS as

of January 1, 1995.
Table 1. Estimates of Undiscovered Conventionally Recoverable Resources for the OCS 1

 [Tcf = trillion cubic feet; Bbbl = billion barrels; BOE = barrels of oil equivalent]

Natural Gas (Tcf) Oil (Bbbl) BOE (Bbbl)

Region/Subregion Low High Mean Low High Mean Low High Mean

Alaska 58 229.5 125.9 16.9 33.6 24.3 28.7 70.6 46.7

 Arctic 38.0 201.1 99.4 14.7 31.2 22.0 22.5 63.3 39.6

 Bering Shelf 7.0 38.6 18.8 0.4 1.8 0.9 1.6 8.6 4.3

 Pacific Margin 2.1 18.3 7.7 0.7 2.5 1.4 1.1 5.5 2.8

Atlantic 15.9 43.4 27.5 1.3 3.7 2.3 4.5 10.7 7.2

Gulf of Mexico 82.3 110.3 95.7 6.0 11.1 8.3 21.2 30.0 25.4

Pacific 15.2 23.2 18.9 9.0 12.6 10.7 11.8 16.6 14.1

Total OCS 186.3 369.2 268.0 37.1 55.3 45.6 72.9 117.0 93.4 2

 

Low and High values refer to those estimates which occur at the 95th and 5th percentiles, respectively, on a cumulative 1

distribution curve (see 

figure A-2): The "Mean" value is the arithmetric average of all values in the distribution.

Low and High values are not additive to reach the "Total" values; only "Mean" values are additive. 2
Table 2. Estimates of Mean Undiscovered Economically Recoverable Resources for the

OCS (at $18 per barrel of oil and $2.11 per Mcf natural gas) 

[Mcf = thousand cubic feet; Tcf = trillion cubic feet; Bbbl = billion barrels]

Region/Subregion Natural Gas (Tcf) Oil (Bbbl)

Alaska 1.1 3.8

Arctic 0.2 3.4

Bering Shelf 0.9 Negligible

Pacific Margin Negligible 0.3

Atlantic 5.2 0.4

Gulf of Mexico 57.9 4.9

Pacific 8.3 5.3

Total OCS 72.5 14.4

Table 2 presents estimates of the mean undiscovered economically recoverable oil and natural

gas resources for the four OCS regions based upon the mean resource estimate at prices of $18

per barrel for oil and $2.11 per thousand cubic feet (Mcf ) of natural gas.

Estimates of these resources for the geologic provinces assessed within each OCS region as

well as a price-supply curve for each region and province are presented in the appendix. 

Results for individual plays and basins will be presented in regional reports to be released

separately. The regional reports will also include more detail on the provinces and regionlevel estimates.

Figure 7 presents the range of undiscovered conventionally recoverable oil resources for each

of the regions as well as the total OCS. Figure 8 presents the mean estimates of undiscovered

conventionally recoverable oil resources with indicators reflecting the relative portion of these

resources that would be considered economically recoverable at specific prices.

Figure 9 shows the range of undiscovered conventionally recoverable natural gas resources for

each of the regions as well as the total OCS. Figure 10 presents the mean estimates of 

undiscovered conventionally recoverable natural gas resources with indicators reflecting the

relative portion of these resources that would be considered economically recoverable at

specific prices. (Note: the natural gas prices used in fig. 10 and the oil prices used in fig. 8

are paired prices and the resultant "economically recoverable" quantities of oil and natural gas

are co-existent resources that is oil resource estimates at $18 per barrel and natural gas

resource estimates at $2.11 per Mcf are directly related.)
OCS Alaska Atlantic Gulf of Mexico Pacific

0

25

50

75

100

125

150

175

200

225

250

275

300

325

350

375

Trillion Cubic Feet (Tcf)

95% - Low Case

5% - High Case

OCS Alaska Atlantic Gulf of Mexico Pacific

0

5

10

15

20

25

30

35

40

45

50

55

60

Billion Barrels (Bbbl)

95% - Low Case

5% - High Case

Figure 9. Undiscovered Conventionally

Recoverable Natural Gas Resources -- Low and

High Resource Case

Figure 10. Undiscovered Conventionally

Recoverable Natural Gas Resources -- Mean

Resource Case

Figure 8. Undiscovered Conventionally

Recoverable Oil Resources -- Mean Resource Case

Figure 7. Undiscovered Conventionally

Recoverable Oil Resources -- Low and High

Resource Case
RESERVES AND RESERVES APPRECIATION

Estimates of the oil and natural gas reserves for the OCS are presented by region in table 3 for

three categories: (1) proved reserves, (2) unproved reserves, and (3) reserves appreciation. 

The cumulative production from existing and depleted fields is also presented.

The MMS estimates for proved oil and natural gas reserves for the OCS are revised annually

and are reported for individual fields in MMS publications, most recently Estimated Proved

Oil and Natural Gas Reserves, Gulf of Mexico, December 31, 1994 OCS Report MMS 95-

0050 (Melancon et al., 1995) and Estimated Oil and Natural Gas Reserves, Pacific Outer

Continental Shelf (as of December 31, 1994) OCS Report MMS 95-0062 (Sorenson et al.,

1995).

Estimates of unproved reserves are published annually for the Pacific OCS Region. However,

due to the changing status of field development in the Gulf of Mexico, unproved reserves (of

oil and natural gas) as of January 1, 1995, were estimated specifically as part of this

assessment. Similarly, although the Alaska OCS Region has no proved reserves, five

unproven fields were studied as part of this assessment, and estimates of unproved oil and

natural gas reserves are reported (table 3).

Reserves appreciation reflects an observed historical trend to increase estimates of proved

reserves for oil and natural gas fields as development of the fields proceeds and production

occurs. Several factors are generally cited as contributors to this appreciation (although

downward revisions are sometimes encountered), including discovery of previously

undetected pools, improved recovery techniques, technological advances, enhanced economic

returns, and similar factors—although observed and documented—that are difficult to

quantify. Nevertheless, reserves appreciation is increasingly recognized as an important

component of resource assessments, particularly for mature producing regions.

An estimate of reserves appreciation to the year 2020 was developed for the Gulf of Mexico

OCS fields as a part of this assessment, and the results are included in table 3. Because of the

relatively few fields and the lack of a long production history for Pacific OCS fields, reserves

appreciation could not be estimated. Also, due to different geologic, physiographic, and

economic conditions, the Gulf of Mexico estimates could not be applied to the Pacific OCS

Region. (The specific methodology and data used in estimating the Gulf of Mexico OCS

reserves appreciation will be discussed in the Gulf of Mexico regional assessment report.)
Table 3. Estimates of OCS Oil and Natural Gas Reserves and Production as of January

1, 1995

[Bbbl = billion barrels; Tcf = trillion cubic feet]

Reserve Category Alaska Atlantic Gulf of Mexico Pacific

Remaining Proved

Reserves: 

 Oil (Bbbl) 0.0 0.0 2.5 0.7

 Gas (Tcf) 0.0 0.0 29.3 1.6

Unproved Reserves:

 Oil (Bbbl) 0.4 0.0 0.9 0.6

 Gas (Tcf) 0.7 0.0 4.7 0.8

Reserves

Appreciation: 0.0 0.0 2.2 Not 

 Oil (Bbbl) 0.0 0.0 32.7 Estimated

 Gas (Tcf)

1994 Production:

 Oil (Bbbl) 0.0 0.0 0.31 0.06

 Gas (Tcf) 0.0 0.0 4.8 0.05

Cumulative

Production: 0.0 0.0 9.3 0.7

 Oil (Bbbl) 0.0 0.0 112.6 0.7

 Gas (Tcf)

TOTAL OCS POTENTIAL

The total oil and natural gas endowment for the Nation's OCS as of January 1,

1995—comprising estimates (mean) of undiscovered resources, remaining proved reserves,

unproved reserves, and reserves appreciation—is presented in table 4 and figures 11 and 12. 

Individual region endowments are presented in figures 13-16. Although summarized in tables

and charts, the estimates for each category should be viewed differently because of the

relative uncertainties pertaining to (1) the existence and the estimated quantities of

undiscovered conventionally recoverable oil and natural gas resources in the lightly explored

OCS areas and (2) the amounts that may eventually become economically viable under future

economic realities. The estimates of unproved reserves and reserves appreciation also have a

degree of uncertainty incorporated. Even proved reserves have some uncertainties associated

with the estimation process.
Technological advances in hydrocarbon exploration and development are sure to occur in the

future, yet the nature of advancement is extremely hard to predict and its impact difficult to

estimate. However, past experience indicates most technological breakthroughs occur during

high cost scenarios and impact the exploration and development by lowering the cost and

sometimes by improving the chance of success.

For the purpose of this assessment, recent technological advances in gathering, processing,

and interpreting seismic data contributed to the identification and mapping of geological plays

and development of geologic parameters used to model the plays. Similarly, recent

technological advances in offshore drilling and development operations were incorporated

through the assumptions associated with the costs of these activities. However, no attempt

was made to determine an empirical relationship between the future technological

advancements and the estimated undiscovered resources. It is believed, however, any

technological advances in the future will significantly affect the portion of the undiscovered

conventionally recoverable resources, which will then be viewed as the economically

recoverable resources. The estimates of undiscovered economically recoverable resources

may be higher if the finding risks are reduced.

Table 4. Total OCS Oil and Natural Gas Conventionally Recoverable Resources and

Reserves Potential 

[Bbbl = billion barrels; Tcf = trillion cubic feet]

Oil (Bbbl) Gas (Tcf)

Category Low High Mean Low High Mean

Undiscovered Conventionally

Recoverable Resources 37.1 55.3 45.6 186.3 369.2 268.0

Proved Reserves — — 3.2 — — 30.9

Unproved Reserves — — 1.9 — — 6.2

Reserves Appreciation — — 2.2 — — 32.7
Total Oil in Billion Barrels (Bbbl)

45.6

3.2 2.2 1.9

10

Total Gas in Trillion Cubic Feet (Tcf)

268

30.9

32.7 6

113.3

Figure 11. Total OCS Oil

Figure 12. Total OCS Natural Gas
Alaska Oil

Billion Barrels (Bbbl)

24.3

0.4

Undiscovered Conventionally Recoverable Mean Resources

Unproved Reserves

Alaska Natural Gas

Trillion Cubic Feet (Tcf)

125.9 0.7

Undiscovered Conventionally Recoverable Mean Resources

Unproved Reserves

Atlantic Oil

Billion Barrels (Bbbl)

2.3

Undiscovered Conventionally Recoverable Mean Resources

Atlantic Natural Gas

Trillion Cubic Feet (Tcf)

27.5

Undiscovered Conventionally Recoverable Mean Resources

Figure 13. Alaska OCS Resources and Reserves

Figure 14. Atlantic OCS Resources
Gulf of Mexico Oil

Billion Barrels (Bbbl)

8.3

2.5

2.2

0.9

9.3

Undiscovered Conventionally Recoverable Mean Resources

Proved Reserves

Appreciated Reserves

Unproved Reserves

Cumulative Production

Gulf of Mexico Natural Gas

Trillion Cubic Feet (Tcf)

95.7

29.3

32.7

4.7

112.6

Undiscovered Conventionally Recoverable Mean Resources

Proved Reserves

Appreciated Reserves

Unproved Reserves

Cumulative Production

Pacific Natural Gas

Trillion Cubic Feet (Tcf)

18.9

1.6

0.8

0.7

Undiscovered Conventionally Recoverable Mean Resources

Proved Reserves

Unproved Reserves

Cumulative Production

Pacific Oil

Billion Barrels (Bbbl)

10.7

0.7

0.6

0.7

Undiscovered Conventionally Recoverable Mean Resources

Proved Reserves

Unproved Reserves

Cumulative Production

Figure 15. Gulf of Mexico OCS Resources and Reserves

Figure 16. Pacific OCS Resources and Reserves
COMPARISON WITH PREVIOUS ASSESSMENTS

Conclusions drawn from direct comparisons of this assessment with previous assessments of

undiscovered oil and natural gas resources on the OCS may be misleading because of the

numerous changes in assessment methodology and models employed. 

Previous MMS assessments of undiscovered oil and natural gas resources were performed to

address specific OCS policy and regulatory decisions facing MMS officials, and they

generally focused upon estimating economically recoverable resources. The results of these

assessments were published as a means of informing industry and the general public of the

basis of MMS analyses and decisions. The 1987 assessment was the first attempt by MMS to

address the undiscovered resource base (as defined in the subsequent publications), but the

assessment was based upon the prospect-oriented database and PRESTO model used by MMS

for its economics-oriented decisions. The MMS attempted to compensate for this problem by

creating field size distributions from mapped prospects to estimate resources associated with

small fields. This methodology was labeled DIST, referring to DISTributions of possible field

sizes. (See Cooke and Dellagiarino, 1990, for a complete discussion of DIST.) The MMS

methodologies used in the 1987 assessment were reviewed by NAS, AASG, API, and

EIA/DOE. These reviews surmised that estimates of undiscovered oil and natural gas

resources were conservative—attributable generally to the prospect-oriented databases and

modeling factors (particularly risking procedures) that contained ingrained economic

characterizations. Hence, many of the review recommendations addressed this perceived

problem.

The decision to use the geologic play as the basis for this assessment and the development of

the GRASP model by MMS were made in acknowledgment of the shortcomings of previous

assessments in reflecting the full extent of the recoverable oil and natural gas resources that

may exist on the OCS. In view of these changes, geologic inputs incorporated significantly

larger numbers of prospects and pools than previous assessments to reflect data coverage

gaps, stratigraphic traps, and other possible exclusions by previous MMS assessments. This

generally produced upward pressure on the magnitude of the estimates of overall

undiscovered oil and natural gas resources. These vastly different geologic inputs also

impacted the risking procedures used by MMS—the result being much higher probabilities for

occurrence of oil and natural gas within the geologic plays being assessed (this, too, produced

upward pressure on the overall estimates of much of the OCS). Finally, the MMS has

thoroughly reviewed most of the geologic provinces and basins on the OCS since the last

assessment including the acquisition of geological, geophysical, and engineering data and

information resulting from interim industry exploration and development activities. Extensive

new mapping and data analyses have also been incorporated, supporting more optimistic

analyses in some areas and more pessimistic analyses in others.

In summary, MMS incorporated numerous changes into this assessment to better reflect the

full extent of the recoverable oil and natural gas resources yet-to-be-discovered on the OCS

resulting in generally higher estimates (as expected) for most areas. However, MMS is not

able to quantify the relative portion of the change in estimates attributable to the modeling
Figure 17. Changes in Mean Estimates of OCS

Undiscovered Conventionally Recoverable Resources

from the 1987 and 1995 Assessment

changes or interim geologic data and information analyses associated with ongoing OCS

activities or geologic interpretation changes.

As stated, incorporation of the recommendations of NAS, AASG, API, and EIA/DOE

addressing the resource base portion of previous assessments tended to result in higher

estimates. However, MMS changes to address recommendations for estimating undiscovered

economically recoverable resources tended to produce lower proportions of the undiscovered

resource accumulations to be considered economically recoverable at stated prices. The

major changes in economic parameters that produced these downward pressures generally

were made to reflect economic parameters industry practices associated with exploring,

developing, and producing oil and natural gas in OCS areas. These major changes were (1)

including costs for exploration and delineation drilling versus previous exclusions of those

costs, (2) use of a 12-percent after-tax rate of return discount factor versus previous 6-8-10

percent range, and (3) use of constant oil and natural gas prices versus the previous practice of

starting prices with real price growth. Additionally, modeling changes associated with the

timing of future exploration, development, and production activities impacted economic

analyses, generally producing more conservative estimates. For this report, no attempt has

been made to quantify the incremental changes associated with each of these factors although

future technical publications on this topic are being considered.

With these changes in mind, a general

comparison of 1987 and 1995

assessment results is given in figure

17. It is apparent that the considerable

increase in the Alaska OCS Region's

undiscovered conventionally

recoverable oil and natural gas

resources was the primary factor in the

significant increase in overall OCS

conventionally recoverable estimates.

This increase, however, is mostly

attributable to the use of the GRASP

methodology, which allows for the

inclusion of unmapped prospects and

possible stratigraphic fields—which

NAS, AASG, and other reviewers had

professed that the previous MMS

assessments had excluded. Additional

seismic mapping activities in the

Alaska OCS Region's two most

promising provinces (the Arctic

subregion accounts for nearly 90

percent of the Region's undiscovered

conventionally recoverable resources)

and adjustments to the MMS
techniques for determining risk (also recommended by NAS and others) also contributed to

the higher estimates. Finally, it is important to know that the significant quantities of the

Alaska OCS Region's undiscovered conventionally recoverable natural gas resources are

thought to exist as associated and dissolved natural gas (i.e., natural gas that is found as a gas

cap in contact with or dissolved in oil accumulations). Hence, these natural gas resources are

attainable only if the oil accumulations occur within the projected geologic formations under

the conditions as modeled.

Pacific OCS Region and Atlantic OCS Region results also reflect the expected upward

revisions resulting from the inclusion of previously unmapped and possible stratigraphic

prospects and risking procedure changes. The Pacific OCS Region results were also

positively influenced by recent geologic information suggesting a more widespread

occurrence of the prolific Monterey horizon than previously assessed.

At first glance, the Gulf of Mexico OCS Region appears to have been assessed as slightly less

optimistic than previous assessments. However, two factors are important considerations to

counter this viewpoint:

1. Since the 1987 assessment, nearly 2 1/2 billion barrels of oil and 40 trillion cubic feet

(Tcf) of natural gas have been produced—only 1 billion barrels and 13 Tcf of which

were not replaced by resources in the undiscovered categories or from unproven

reserves. 

2. Similarly, nearly 1 billion barrels of oil and 4.7 Tcf of natural gas currently considered

as unproven reserves were most likely assessed as undiscovered resources in the

previous assessment.

Comparisons of the economically recoverable resources between the assessments may prove

even more misleading because the higher estimates for the undiscovered conventionally

recoverable resources would seem to lead to higher levels of economically recoverable

resources. However, the changes in economic parameters employed tended to counter these

effects. 
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