U.S. natural gas production in 2Q2007 increased 1.9% sequentially from the first three months of the year, representing the first sequential gain since 3Q2006, and gas output gained 3.5% from the same period a year ago, according to a survey by SunTrust Robinson Humphrey/Gerdes Group (STRH) energy analysts.
The 40-company survey mirrors recent data by the Energy Information Administration. STRH's survey accounted for about two-thirds of the trend in domestic gas production after considering royalties and working interest. The survey also adjusted for acquisitions and divestitures to provide a more "accurate reflection" of organic growth.
"Historically, our U.S. natural gas production survey has consistently understated U.S. gas production, yet lower emphasis on Gulf of Mexico (GOM) production and a reemphasis of the majors on North American gas development has helped align the survey with actual production trends in recent periods," said the analysts.
This year, they anticipate U.S. gas output will grow by almost 1.5 Bcf/d, "which assumes an increase in onshore natural gas production of about 2 Bcf/d and a decline in GOM production of roughly 0.5 Bcf/d."
STRH's 2007 well productivity decline assumption currently reflects 2.5% versus a long-term average productivity decline of about 6%, "largely due to substantial growth of the Fort Worth Barnett Shale." The analysts said they are "comfortable" with their 1,475 average rig count assumption for 2007.
Of those producers surveyed, STRH said Ultra Petroleum Corp.'s year-over-year production was up 62% followed closely by Southwestern Energy Corp. at 61%. Bill Barrett Corp. gained 26%, EOG Resources Inc. was up 24%, and Williams was up 22% year-over-year.
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