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Insight

Exploration Facts and Figures

Wed, 01/21/2015 - 13:38

EXTENSIONS AND DISCOVERIES

During 2014, PEMEX’s average drilling success rate was 33% for exploratory wells and 95% for development wells. Last year’s seismic data acquisition activities had an emphasis on 3D seismic data. The company acquired 6,150km2 of 3D seismic data, of which 5,036km2 or 81.9% was in deepwater areas of the Gulf of Mexico, and 3,258km2 of 2D seismic data. PEMEX’s exploration program focused on both onshore and offshore regions, including the deepwater areas of the Gulf of Mexico, and resulted in 85.2 million boe of proven reserves from new discoveries. In the Burgos basin, the drilling and completion of two exploratory wells led to the discovery of two shale gas fields. PEMEX plans to continue to drill additional wells in this basin in order to continue assessing the potential for shale oil and gas resources in this area. These discoveries, along with revisions, resulted in increases in proven reserves. During 2014, revisions and the completion of 25 wells in the Northeastern Marine region led to an increase of 459.5 million boe of proven reserves. In the Southwestern Marine region, revisions and the development of the Homol, Kuil, Onel, Xanab, and Xux fields through the drilling of 24 wells led to an increase of 383.7 million boe of proven reserves. In the Northern region’s Burgos, ATG, Poza Rica-Altamira, and Veracruz business units, the drilling of 327 development wells, as well as the discovery of two fields, led to the addition of 117 million boe of proven reserves. Finally, in the Southern region, the drilling of 135 development wells and revisions led to a decrease of 89.8 million boe of proven reserves as a result of water production issues at several fields. During 2014, PEMEX also successfully delineated four fields in the Gulf of Mexico, however, proven reserves have not been booked for these fields, as the necessary facilities for development are not yet in place.

RESERVES

Under the Mexican Constitution, all hydrocarbon reserves located in the subsoil of Mexico are owned by the Mexican nation and not by PEMEX. As of December 31, 2014, PEMEX Exploration and Production had been assigned rights through Round Zero that correspond to areas containing 95.1% of Mexico’s total proven reserves, collectively. PEMEX Exploration and Production has the right to extract, but not own, these reserves, and to sell the resulting production. Of PEMEX’s total proven reserves, 398 million boe have been temporarily assigned to the productive enterprise of the state for a two-year period.

Proven oil and natural gas reserves are represented by quantities of crude oil, natural gas, and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be economically producible from known reservoirs and under existing economic conditions, operating methods, and government regulations. PEMEX’s total proven developed and undeveloped reserves of crude oil, condensates, and liquefiable hydrocarbons recoverable from field processing plants decreased by 7.1% in 2014, going from 11.08 billion barrels at the end of 2013 to 10.29 billion barrels at the end of 2014. Its proven developed reserves of crude oil, condensates, and liquefiable hydrocarbons recoverable from processing plants decreased by 3%, dropping from 7.36 billion barrels at the end of 2013 to 7.14 billion barrels at the end of 2014. These decreases were principally due to the fact that PEMEX was assigned less than 100% of Mexico’s total proven reserves in in Round Zero, as well as a decrease in field development activities, as 265 fewer wells were completed in 2014 than in 2013. The amount of crude oil, condensate, and liquefiable hydrocarbon reserves added in 2014 was insufficient to offset the level of production in 2014, which amounted to 1.00 billion barrels of crude oil, condensates, and liquefiable hydrocarbons.

PEMEX’s total proven developed and undeveloped dry gas reserves decreased by 11.5% in 2014, from 12,273bcf at the end of 2013 to 10,859bcf at the end of 2014. Its proven developed dry gas reserves decreased by 9.7% in 2014, from 7,461bcf at the end of 2013 to 6,740bcf at the end of 2014. These decreases were principally due to the fact that PEMEX was assigned less than 100% of Mexico’s total proven reserves in Round Zero, as well as a decrease in field development activities. The amount of dry gas reserves added in 2014 was insufficient to offset the level of production in 2014, which amounted to 1,511bcf of dry gas. PEMEX’s proven undeveloped dry gas reserves decreased by 14.4% in 2014, from 4,811bcf at the end of 2013 to 4,119bcf at the end of 2014.

During 2014, 986.9 million boe were reclassified from proven undeveloped, probable, and possible reserves to proven developed reserves, with field development activities accounting for the reclassification of 891.1 million boe. The Ayatsil and Ayín offshore fields are the only fields containing material volumes of the proven reserves that have remained undeveloped for five years or more. The delay in the development of Ayatsil is due to the complexity of this project, which is PEMEX’s first offshore, extra-heavy crude oil project and will be included in the upcoming farm-outs. To date, three drilling platforms have been installed in Ayatsil and drilling activity is expected to begin in the near future. PEMEX also expects to continue developing the Ayín field during 2015.