With an increased number of companies reporting, Lehman Brothers has revised its estimates of natural gas production in the United States for the first quarter, showing a 0.7% increase sequentially from 4Q 2002 and a 2.2% decline from the first quarter a year ago. The estimates are based on 58% of the 49 companies in Lehman’s survey reporting gas volumes. Thirteen more companies are slated to report by the end of the week.

Lehman’s estimated total Canadian production decreased 2.1% sequentially and fell 2.5% from Q102. The company’s analysis predicts full year 2003 natural gas production volumes are expected to fall 1-3% in the U.S. and 2-4% in Canada. “We believe that a 1-4% [North American] gas volume decline and low storage levels in 2003 will keep upward pressure on prices.”

Overall, U.S. oil and gas production rose roughly 1.7% sequentially between the two most recent quarters and decreased 2.1% from year ago levels. The overall production figures are based on 78% of oil and gas companies reporting. The first quarter sequential comparison is versus a Q4 level that suffered roughly a 1.4% U.S. production loss due to hurricane related production shut-ins in the Gulf of Mexico.

Lehman’s preliminary forecast on May 1 with fewer companies reporting forecast that North American natural gas production would increase roughly 1.3% versus Q402 (see Daily GPI, May 2).

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