Oil and Natural Gas Reserve Prices- Addendum to CEEPR WP 03-016, Including Results for 2003 and Revisions to 2001

Introduction. A working paper entitled “Oil and Natural Gas Reserve Prices 1982-2002: Implications for Depletion and Investment Cost” was published in October 2003 (cited hereafter as Adelman & Watkins [2003]). Since then we have obtained data for 2003 and estimated oil and natural gas reserve prices for that year. We have also revised our previous estimates of reserve prices for 2001. This addendum paper reports on the nature and significance of the results for 2003 and the revisions to 2001. We have also extended the analysis by adding two new features. First is the expression of reserve prices in real terms – previously we had only reported nominal prices. Second, we have estimated levelized or constant field prices that appear to underlie reserve prices, for each year. We refer to these as planning prices. Previously we had only published estimated growth rates in field prices from levels prevailing for a given year, congruent with our estimates of reserve prices. Section 1 of this Addendum paper highlights the 2003 results. Section 2 discusses the revisions for year 2001. Section 3 outlines the nature of the analytical extensions, presents the results, and discusses what they show. Concluding remarks are in Section 4. Adelman & Watkins [2003] included an extensive set of tables in Appendices. The revisions to all these tables to include 2003 and revised 2001 data are attached here as Appendices. This paper is to be read in conjunction with, not as a substitute for, Adelman & Watkins [2003]: analysis and description in the 2003 paper is not repeated here.