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EIA Sees Gas Production Off Slightly in April

Natural gas production in the Lower 48 declined fractionally in April, according to the Energy Information Administration (EIA), registering a 0.2% decline in gross wellhead withdrawals from March. It was the second month in a row to show a reduction.

Withdrawals in April totaled 63.37 Bcf/d, compared to a revised 63.49 Bcf/d in March. Wyoming, Texas and New Mexico recorded production drops, while the Gulf of Mexico (GOM) and Louisiana showed gains. Oklahoma production was flat at 5.10 Bcf/d.

Wyoming production was off 1.3% at 7.08 Bcf/d; Texas was off 1.1% at 21.77 Bcf/d; and New Mexico was off 0.7% at 4.06 Bcf/d. Production was up in the GOM by 1.2% at 6.78 Bcf/d and Louisiana was up 3% at 4.06 Bcf/d. All other states in the Lower 48 showed a 0.4% increase at 14.53 Bcf/d.

Gross withdrawals are converted to marketed natural gas production, which is reported on the EIA website in the Natural Gas Navigator, and in the Natural Gas Monthly and Annual reports. Marketed production is calculated by subtracting gas used for repressuring, quantities vented and flared, and nonhydrocarbon gases removed in treating or processing operations from gross withdrawals.

EIA noted the continued price decline and the fact that several natural gas plants shut down in Texas.

Across the country producers have been steadily reducing exploration and production (E&P) spending as prices continue to fall, and the natural gas rig count has dropped dramatically, but a supply reduction has been slow in coming. In the United States E&P spending now is projected to fall 38% from a year ago to $67.8 billion, according to a recent survey by Barclays Capital analysts (see NGI, June 29).

Nevertheless, gas in storage continues to be out in front of previous years. Analysts have discounted some of the spending cuts and the drop in the rig counts, pointing to new technology, including hydro-fracing in shale gas reservoirs and horizontal drilling which require fewer rigs to bring on more production. Also, as the industry has become adept at finding and producing shale gas its costs have declined. Equipment costs also have declined with the economic recession (see NGI, June 22).

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