“Headline” U.S. natural gas production continues to move higher, but signs of decline are emerging in some onshore plays, according to Barclays Capital energy analysts.

Analysts Biliana Pehlivanova and Shiyang Wang wanted to understand the “magnitude” of the decline in dry gas output beyond the big growth areas. Four regions stood out because of headlined growth: associated gas produced from oil wells in Texas and North Dakota, as well as dry gas output in the Marcellus and Fayetteville shales. Those growth figures then were compared with aggregate output in the Lower 48.

“We estimate that gas production in the Marcellus, Fayetteville and gas from oil wells in Texas and North Dakota added 3,150 MMcf/d through September in 2012,” they wrote. “We find that outside of these four regions, Lower 48 dry gas production dropped 2,850 MMcf/d in the first nine months of 2012, in line with gas-directed drilling trends.

“We reiterate our expectation for aggregate U.S. Lower 48 production to tip into declines in the second half of 2013. Revisions to historical production data caused our year/year (y/y) production growth estimate to inch slightly higher. We expect 2013 dry gas production to average 64.95 Bcf/d, up 180 MMcf/d versus 2012.”

Overall, the four areas analyzed “contributed 3,200 MMcf/d of y/y production growth in 2011 and 4,800 MMcf/d y/y through September in 2012. Given overall dry gas output, this implies that excluding these areas, ‘other’ Lower 48 production grew by 1,200 MMcf/d y/y in 2011, but declined by 1,100 MMcf/d y/y in the first nine months of 2012.” Those “other” contributors were the Haynesville and Barnett shales, as well as dry gas from the Eagle Ford Shale.

The trajectory of “other” Lower 48 gas output “mirrors drilling trends,” said the Barclays team. “By September 2012, ‘other’ Lower 48 production was down 2,900 MMcf/d from January 2012. Since tipping into declines at the end of 2011, ‘other’…output has dropped, on average, 375 MMcf/d each month.”

If the declines continue on their current track, the “other” dry gas output would fall by more than 3,900 MMcf/d this year, Barclays projected. “In this scenario, a repeat of last year’s strong growth of Marcellus and associated gas in Texas and North Dakota, coupled with a modest drop in Fayetteville production, would result in aggregate…output growing about 400 MMcf/d y/y on average in 2013.”

The analysts said they thought that as of September, which was the final month for which examined data was available, the “other” production in the Lower 48 hadn’t been reflected the full effect of the 2012 pullback in gas-directed drilling. Last year the gas rig count averaged 639 from January through June, and it was at 442 at the end of September.

“While some production areas have been in a decline throughout 2012, others are only now tipping into sequential losses. If gas-directed drilling remains at current levels throughout 2013, on average, drilling activity would be down 20% y/y. Without a meaningful rebound of gas-directed drilling outside of the Marcellus and Fayetteville shale plays, we believe the declines in ‘other’ Lower 48 are poised to persist and accelerate.”

In his U.S. Capital Advisors 2013 Playbook, Cameron Horwitz said the firm’s “favorite basic-specific themes” this year are the Permian Basin, as well as the Utica and Eagle Fords. Possible “tailwinds” include a “benign cost environment” for oilfield services, which would lead to less upside risk to capital expenditure (capex) budgets. In addition, “E&Ps are doing more with less, which should lead to improving capital productivity.”

However, headwinds also face domestic producers, in part because of a “lack of new plays” and no “next big thing” to drive resource estimates higher. In addition, abundant natural gas liquids (NGL) likely will lead to “widespread ethane rejection,” which could hit a threshold because of “pipeline specs, potentially leading to rich gas shut-ins,” Horwitz said.

Look for several things to pop for U.S. producers in 2013, he said. Among them are core Eagle Ford resource upgrades, the Midland Wolfcamp play “moving north,” core Utica well performance, downspacing/secondary recovery, core asset sales/joint ventures (JV), pad drilling and free cash flow generation. Those things not likely to make big headlines this year include NGL prices, fringe asset sales/JVs, Eagle Ford wet gas, exploratory Bakken Shale step-outs and noncore Utica reserves.