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U.S. Production Nearly Flat in February; Analysts Expect Rebound in March

A return to robust natural gas production growth from the Other States category -- home to several shale-rich states -- wasn't enough to keep the U.S. production total from decreasing to 85.02 Bcf/d in February, down 0.18 Bcf/d compared with 85.20 Bcf/d in January, according to the Energy Information Administration (EIA).

Total U.S. output, which was approximately 2.386 Tcf in February, had set records in both January (2.640 Tcf) and December (2.631 Tcf) (see Daily GPI, April 1).

The Other States category, which includes the Marcellus and Utica shales, had 29.38 Bcf/d in February, up 0.60 Bcf/d (2.1%) from the previous month, according to data compiled in EIA's Monthly Natural Gas Gross Production Report. That was the largest volumetric increase in the report and was due primarily to new wells coming online in the Marcellus and improved weather conditions, EIA said. The Other States category had declined in the previous report for only the third time since February 2013.

Production increases were also seen in the Federal Offshore Gulf of Mexico (3.32 Bcf/d, up 3.4% from 3.21 Bcf/d in January) and Wyoming (5.50 Bcf/d, up 0.4% from 5.48 Bcf/d in January). The increase in the Gulf of Mexico came as maintenance issues from the previous month were resolved and several operators reported small increases, EIA said.

The Lower 48 total reached 75.37 Bcf/d in January, nearly flat compared with 75.32 Bcf/d in January.

But there were only declines reported in the remaining categories. Alaska production in February was 9.65 Bcf/d, down 2.3% from 9.88 Bcf/d in January. In Texas, production slowed to 22.27 Bcf/d, a 2.2% decline compared with 22.76 Bcf/d in January, "due to operators reporting gas plant downtime and freezing weather," EIA said. Inclement weather was also behind Oklahoma's 5.86 Bcf/d, a 2.3% decline compared with 6.00 Bcf/d in January, the agency said.

Production in Louisiana in February was 5.56 Bcf/d, down 0.2% from 5.57 Bcf/d in January, and New Mexico was 3.48 Bcf/d.

EIA's report "suggests that with the exception of 'Other States,' little progress was made on recovering production from freeze-offs during February, said Barclays analysts Biliana Pehlivanova and Shiyang Wang in a note Wednesday. They expect natural gas production this year "to exhibit accelerated growth" compared with 2013 levels.

"While we expect the effect of freeze-offs to extend into March, the next production report should show significant recovery to production from February levels. Pipeline flow data indicate that during March, production recovered to the highs of last November."

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