With about 66% of its third quarter production survey completed, Lehman Brothers analysts said Friday that they believe North American natural gas production fell an estimated 2.3% sequentially from the second quarter and that full-year volumes are expected to fall nearly 2.5% in the United States and 3.2% in Canada over 2002.

Lehman’s survey covers 49 North American producers that account for about 70% of the continent’s production volumes. Analyst Thomas Driscoll said that the survey shows that production of its covered companies fell 2.8% sequentially and 3.9% year-over-year. Previously, the analyst had estimated a decline of the group to 2-2.5% sequentially and 3-3.5% from a year ago.

Quarterly U.S. gas production is estimated at 26.5 Bcf/d, and overall, the analyst expects U.S. supply to fall 5% in 2003. The major components of the estimated 5% supply decline include the following:

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