A survey of 50 of the largest U.S. exploration and production (E&P) companies indicates natural gas output rose 0.8 Bcf/d, or 2.5%, in 1Q2010 from the previous three months, which points to stronger output through most of the year, SunTrust Robinson Humphrey/the Gerdes Group (STRH) said Wednesday.

Analysts John Gerdes, Cameron Horwitz and Ryan Oatman reviewed data from 50 U.S.-based independents, which constitute about 70% of the “trend in domestic gas production after grossing up for royalty/working interests.”

The higher gas production between late 2009 into early 2010 implies “a 1.4 Bcf/d sequential increase in U.S. output assuming private company capital spending/production is comparable to the surveyed firms,” said the trio.

“Importantly, we anticipate less growth from private E&Ps owing to less substantive capitalization/market access. Accordingly, we project a lower 1.3 Bcf/d (2.3%) quarter/quarter (q/q) rise in 1Q2010 U.S. natural gas production.”

Surveyed companies’ U.S. gas rig count in 1Q2010 rose 20% q/q to an average of 882.

Gerdes and his colleagues noted “exceptional q/q growth” from Anadarko Petroleum Corp. and Encana Corp., which drove surveyed output higher. However, “October ’09 production shut-ins/outages distorted q/q comparisons.”

Year/year (y/y) gas production now is forecast to peak in October at 2.8 Bcf/d, or 5% higher than a year earlier, said the analysts.

The STRH survey follows one on Monday by Raymond James & Associates Inc., which said the Department of Energy and consensus Wall Street estimates for 2010 gas supply growth were “not just wrong but way wrong” (see Daily GPI, May 18).

“Current consensus expectations for domestic gas supply growth this summer call for less than 1 Bcf/d of y/y growth,” said the Raymond James team. “In contrast, we now believe that y/y gas supply growth will be closer to 4 Bcf/d this summer.” By connecting the dots, they wrote, the “massive supply trends become pretty obvious.”

Pointing to the most recent Energy Information Administration (EIA)-914 trends from September 2009 through February, the Raymond James analysts noted that “gas supply has grown about 0.5 Bcf/d each month since the September bottom. If we extrapolate this same 0.5 Bcf/d growth trend though the summer, the y/y EIA-914 gas supply figures would reach a whopping 6 Bcf/d by September.”

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