The most common theory about how natural gas was created holds that it was formed from the underground decomposition of organic matter (dead plants and animals). During the decomposition process, much of the carbon and hydrogen in the organic matter was converted to methane, the major component of natural gas. Large volumes of methane were subsequently trapped in the subsurface of the earth where the right geological conditions occurred at the right times. Such a place is called a reservoir.
Proved reserves of natural gas are estimated quantities that analyses of geological and engineering data have demonstrated to be economically recoverable in future years from known reservoirs. The natural gas placed by man in underground storage is not included in proved reserves. It is not necessary that production, gathering, or transportation facilities actually be installed or operative for a reservoir to be considered proved. It is assumed that production will be initiated, if and when economically justified.
Please go to the U.S. Department of Energy and the Energy Information Administration natural gas websites for complete and detailed information.