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EIA: Lower 48 Gas Withdrawals Up 1.6% in March

Gross withdrawals of natural gas in the Lower 48 during the month of March increased by 1.6% compared to the preceding month, thanks in part to good weather in the Appalachian and Uinta basins, according to the U.S. Energy Information Administration (EIA).

In the EIA's latest Monthly Natural Gas Gross Production Report, the March over February production gain of 1.18 Bcf/d was led by increases in Oklahoma and Texas. The new total was 76.68 Bcf/d, the largest increase in more than a year

According to the EIA, the Other States category held onto its overall lead in gross gas withdrawals in March, at 29.79 Bcf/d, an increase of 0.4 Bcf/d (1.4%) from February. Texas was second with withdrawals totaling 22.86 Bcf/d (up 0.57 Bcf/d, a 2.6% increase), followed by Oklahoma at 6.14 Bcf/d (up 0.24 Bcf/d, a 4.1% increase) and Wyoming at 5.54 Bcf/d (up 0.04 Bcf/d, a 0.7% increase).

"Texas had the largest volumetric increase...primarily due to new wells being brought online and shut-in wells returning to production," the EIA said. "Other States also reported a many operators reported improved weather conditions and new wells in the Appalachian and Uinta Basins. Oklahoma production also saw an increase...due to the completed maintenance and improved weather conditions from the prior month."

EIA said there were fewer gross gas withdrawals made in Louisiana and the Federal Offshore areas in the Gulf of Mexico (GOM), at 5.49 Bcf/d (down 0.08 Bcf/d, a 1.4% decrease) and 3.24 Bcf/d (down 0.09 Bcf/d, a 2.7% decrease), respectively. The agency said the declines were "mainly due to maintenance issues and well shut-ins."

Shiyang Wang and Christopher Louney, analysts with Barclays Capital Inc., said the EIA's latest figures suggest most regions of the country have been making progress recovering from freeze-offs this winter.

"As freeze-offs continued to affect production in March due to extremely colder-than-normal temperatures, we expect a continued recovery in production in April," Wang and Louney said in a note Monday. "Drilling activities in April should also have picked up compared with the slack experienced during the winter season due to the adverse weather environment.

"Pipeline flow data year-to-date indicate that production growth has accelerated in May. We expect production growth to accelerate throughout the rest of the year."

But the analysts cautioned there could be discrepancies between production estimates by pipeline companies and the EIA. They said pipeline flow estimates indicated production increased by 1.23 Bcf/d between February and March.

"Pipeline data indicate that production is just 268 MMcf/d higher than November 2013 levels before wide spread well freeze-offs, while the EIA data indicate that production reached more than 700 MMcf/d above November levels in March this year," Wang and Louney said. "Given that pipeline data have poor visibility into intrastate pipeline flows, production estimates could have significant freeze-off related discrepancies versus the EIA's survey-based reports during the winter months."

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