Exxon Mobil Corporation (NYSE:XOM) announced today that it
replaced more than 100 percent of its production in 2007.
Additions to the Corporation´s worldwide proved oil and gas
reserves totaled 1.6 billion oil-equivalent barrels in 2007 or 101
percent of production. Reserves replacement totaled 132 percent
excluding the effects of the expropriation of Venezuelan assets and
property sales. These additions assume the pricing basis the
Corporation uses to make investment decisions consistent with
long-standing practice, rather than single-day, year-end pricing.
"With a 10-year average replacement ratio of 112 percent,
ExxonMobil has continued to replace annual production with new,
quality reserves additions," said Rex Tillerson, Exxon Mobil
Corporation´s chairman and chief executive officer. "This performance
is a reflection of our disciplined investment strategy, world-class
resource base and outstanding execution capabilities, which enable the
Corporation to continue to develop new production capacity to help
meet the world´s growing energy needs."
"The annual reporting of proved reserves is the product of our
long-standing, rigorous process that ensures consistency and
management accountability with respect to all reserves bookings."
Key 2007 proved reserve additions were made from new developments
and established operations in North America, the Middle East, Europe
and West Africa. These additions reflect developments with significant
funding commitments as well as revisions or extensions to existing
fields based on routine reservoir studies and field evaluations. The
Venezuelan expropriation and asset sales reduced proved reserves by
0.5 billion oil-equivalent barrels.
Effect of Single-Day, Year-End Pricing Calculation
ExxonMobil also states proved reserves utilizing December 31
liquids and natural gas prices. On this basis, the total proved
reserves additions in 2007 were 1.2 billion oil-equivalent barrels,
resulting in a reserves replacement ratio of 76 percent. Excluding the
effects of the Venezuelan expropriation and property sales, reserves
replacement was 107 percent, using the year-end pricing basis. The use
of prices from a single date is not relevant to investment decisions
made by the Corporation, and annual variations in reserves based on
such year-end prices are not of consequence in how the business is
actually managed.
Long-Term View
Given the long-term nature of the industry and the large size of
the discrete projects that provide a significant portion of the
Corporation´s reserves additions, it is appropriate to consider a time
horizon longer than a single year. Excluding the effects of using
single-day, year-end pricing, the Corporation´s ten-year average
reserves replacement is 112 percent, with liquids replacement at 104
percent, and gas at 124 percent.
The reserve additions made during this period comprise a diversity
of resource types and have broad geographical representation. With
22.7 billion barrels of proved oil and gas reserves at year-end 2007,
split about evenly between liquids and gas, ExxonMobil´s reserves life
at current production rates is more than 14 years. The portion of
proved reserves already developed is 62 percent.
Industry-Leading Resource Base
The Corporation´s total oil and gas resource base stands at 72
billion oil-equivalent barrels at year-end 2007.
During 2007, ExxonMobil added 2.0 billion oil-equivalent barrels
of total resources, which more than replaced production. Significant
resource additions were made from successful drilling programs in the
United States, West Africa and the Asia Pacific region.
Overall, the resource base was reduced by 1.8 billion
oil-equivalent barrels in 2007, primarily driven by the effects of the
Venezuelan expropriation of 1.6 billion oil-equivalent barrels.
The Corporation´s resource base of 72 billion oil-equivalent
barrels includes proved and probable reserves, plus other discovered
resources that are expected to be ultimately recovered.
CAUTIONARY NOTE: The terms "resources" and "resource base" include
quantities of discovered oil and gas that are not yet classified as
proved reserves but that are expected to be ultimately recovered in
the future. The term "reserves," as used in this release, includes
proved reserves from Syncrude oil sands operations in Canada which are
treated as mining operations in our SEC reports. The proved reserves
in this release are the combined total from both consolidated
subsidiaries and our interest in equity companies. The Corporation
operates its business with the same views of equity company reserves
as it has for reserves from consolidated subsidiaries.