Michael Fitzsimmons Seeking Alpha – March 3, 2014
Today, I will take a look at the 2013 reserve replacement ratios (“RRR”) for major shale oil producers ConocoPhillips (COP), Continental Resources (CLR), EOG Resources (EOG), and Whiting Petroleum (WLL). While all these companies produced very good to outstanding results, the most interesting reserves report came out of Whiting Petroleum and the component of reserves coming from the company’s Niobrara operations in Colorado.
The RRR is defined as the amount of proved reserves added to a company’s proven reserve base in a given year relative to the amount of oil and gas produced during the year. Long-term, a company’s reserve replacement ratio must be at least 100% for the company to stay in business. Otherwise, it will eventually run out of oil. Obviously, the higher the RRR, the more bullish the company’s future. Here is the 2013 RRR summary for these top shale oil producers: