U.S. proven reserves have fallen by about 20 percent as companies revise estimates in light of declining drilling and well completion rates.
According to data compiled by Bloomberg, 59 U.S. oil and gas firms eliminated about 9.2 billion barrels of proven reserves in 2015, or more than 20 percent of their total inventory.
The downward revision is the largest since 2009, Bloomberg said.
Energy firms calculate proven reserves using a Securities and Exchange Commission formula that takes commodity prices and the potential profitability of wells into account.
While 2014 reserve estimates were calculated using a per barrel price of about $95, 2015 estimates were pegged to a price of about $50 per barrel, Bloomberg said.
Despite the revisions, some of the eliminated reserves could be added back to estimates once oil prices recover.
SEC rules also dictate that firms have to drill undeveloped wells within five years of being added to a firm’s reserves estimate.
Well completion rates have fallen over the last two years as companies cut capital expenditures to cope with low oil prices.
Undeveloped wells accounted for nearly 40 percent of U.S. proven reserves in 2014, up by about 8 billion barrels from the previous year, according to Bloomberg.
According to the U.S. Energy Information Administration, U.S. crude oil and lease condensate proved reserves grew to 39.9 billion barrels in 2014, the highest level since 1972.
U.S. proven reserves of crude oil and lease condensate have increased for six consecutive years, the EIA said.
Proven reserves of U.S. total natural gas increased by 9.8 percent year-over-year to 388.8 trillion cubic feet in 2014, according to the agency.
According to a report from Deloitte, announced and actual upstream capital expenditure cuts have “gone below the minimum required levels to offset depletion, let alone meet any expected growth.”
While U.S. oil and gas drillers added rigs for the second week in a row last week, the total rig count is still nearly 50 percent lower than year ago levels.