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Remaining Previous HitOilNext Hit and Natural Previous HitGasNext Hit Resources of New Mexico

BROADHEAD, RONALD F., New Mexico Bureau of Geology and Mineral Resources, A Division of New Mexico Tech Socorro, NM 87801

    New Mexico has produced 5.2 billion bbls of crude Previous HitoilNext Hit and 56 trillion cubic ft3 of natural Previous HitgasNext Hit since production of these resources began in the 1920’s. During 2002, 67 million bbls Previous HitoilNext Hit and 1.6 trillion ft3 Previous HitgasNext Hit were produced in New Mexico. Available estimates of undiscovered resources indicate a minimum of 1.48 billion bbls Previous HitoilNext Hit and between 68 and 89 trillion ft3 Previous HitgasNext Hit remain to be produced in the state. That is between 32 and 45 years of production for natural Previous HitgasNext Hit and 22 years of production for crude Previous HitoilNext Hit at present rates of production. In the case of Previous HitoilNext Hit, especially, this is a minimum figure because of the limitations involved in estimating an unknown resource that can be neither seen nor measured directly.

    The Reserve Life Index (the ratio of proved reserves to annual production) has been relatively stable for the past two decades at approximately 12 years for natural Previous HitgasNext Hit and 10 years for Previous HitoilNext Hit. The stability of the Reserve Life Indices of Previous HitoilNext Hit and Previous HitgasNext Hit indicates that new, previously unproven resources are being discovered and brought into production at a rate that replaces production. In the case of Previous HitgasNext Hit, this is due chiefly to the discovery and development of coalbed methane whose contribution to annual New Mexico production has grown from 0% in 1987 to 38% in 1996 and still provides 30% of the state’s Previous HitgasNext Hit production today.

    Significant volumes of crude Previous HitoilNext Hit and natural Previous HitgasNext Hit remain to be produced in New Mexico. Most of the existing resource base is not in proved reserves in known Previous HitoilNext Hit and Previous HitgasNext Hit fields. Rather, it occurs as undiscovered resources that will only be found and produced through application of sophisticated exploration methodologies and concepts and, ultimately, drilling. Production of Previous HitoilNext Hit and Previous HitgasNext Hit will decline unless new reserves of Previous HitoilNext Hit and Previous HitgasNext Hit are discovered, developed, and produced.

    Previous HitOilNext Hit and Previous HitgasNext Hit prices will affect what will actually be discovered and produced. Lower rates of discovery and production are associated with periods of low prices and higher rates of discovery and production are associated with periods of high prices.