At the end of 2017, Exxon Mobil Corp. (NYSE: XOM) claimed 21.2 billion barrels of oil equivalent proved reserves, an increase of 6% above the 20 billion barrels the company reported at the end of 2016. As a percentage of production, new proved reserves replaced 183% of 2017 production. Liquids represent 57% of the company’s proved reserves, up from 53% at the end of 2016.
While the total reverses a multiyear trend and is good news for the company, Exxon could use a bit more help on the pricing end. Proved reserves, by definition, are calculated as the number of barrels that can reasonably be expected to be produced at current economics. The bulk of the year-over-year increase came in North America, where about 900 million barrels were added to the proved reserves total due to the extension of projected economic end-of-field-life.
Exxon added 9.8 billion barrels of oil-equivalent to its resource base in 2017, the largest addition since the company acquired XTO Energy in 2010. The resource base includes proved reserves plus other discovered resources that are expected to be ultimately recovered. The company’s resource base at the end of 2017 was approximately 97 billion barrels.
At the end of 2013, when crude prices were near $100 a barrel, Exxon reported proved reserves totaling 25.2 billion barrels and a total resource base of about 91 billion barrels. At the end of 2014, with crude priced at about $53 a barrel, total proved reserves came in at 25.3 billion barrels and the company’s total resource base rose to more than 92 billion barrels.
By the end of 2015, with crude trading around $37 a barrel, total reserves had slipped to 24.8 billion barrels and the total resource base had dropped back to around 91 billion barrels. At the end of 2016, the total resource base remained at around 91 billion barrels.
CEO Darren Woods said:
Our exploration success and strategic acquisitions made during a period of low commodity prices are adding high-quality resources that are among the lowest cost of supply in the industry. ExxonMobil’s portfolio of development opportunities positions us to grow shareholder value as we bring on new supplies of oil and natural gas to meet growing demand.
The company said it added more than 800 million barrels of proved reserves from its Abu Dhabi operations and about 800 million barrels in the Permian Basin of Texas and New Mexico. Discoveries offshore of Guyana added 3.2 billion barrels, and Exxon has a 25% stake in a natural gas field offshore of Mozambique that is estimated to contain 85 trillion gross cubic feet of natural gas in place.
Exxon shares traded up about 0.2% Thursday, at $77.12 in a 52-week range of $76.05 to $89.30. The stock’s 12-month consensus price target is $87.71.