Led by increases of 9% (0.37 Bcf/d) in the Federal Offshore Gulf of Mexico and 1.9% (0.37 Bcf/d) in other states, natural gas production in the Lower 48 states increased 1.4% (0.96 Bcf/d) in October compared with the previous month, according to the Energy Information Administration (EIA).

“These increases are partially explained by wells coming back online that were previously shut-in due to Tropical Storm Lee and drilling activity in the Marcellus Shale play,” according to EIA’s Monthly Natural Gas Production Report.

Tropical Storm Lee forced temporary shut-ins and the evacuation of production platforms and mobile drilling rigs in the GOM in early September (see Daily GPI, Sept. 9, 2011). In November EIA reported a 13.5% drop (minus 0.65 Bcf/d) in the GOM offshore, which was largely a result of that tropical storm (see Daily GPI, Nov. 30, 2011).

Offshore production, which has also suffered from the moratorium on drilling that followed the blowout of BP plc’s Macondo well (see Daily GPI, Oct. 13, 2010), remains well below year-ago levels. Gross production from the Federal Offshore Gulf of Mexico was 4.49 Bcf/d in October, a nearly 25% decline from 5.95 Bcf/d in the year-ago period, according to EIA.

Overall, U.S. production climbed 1.3% (1.05 Bcf/d) in October from September to 80.10 Bcf/d and was up 6.4% (4.85 Bcf/d) from the year-ago period, according to EIA.

Wyoming posted a gain of 2.9% (0.19 Bcf/d); Alaska climbed 1.0% (0.09 Bcf/d); Texas was up 0.5% (0.12 Bcf/d); and Oklahoma remained unchanged at 5.37%. At the same time, Louisiana experienced a 0.7% decline (minus 0.06 Bcf/d) and New Mexico posted a decline of 0.8% (0.03 Bcf/d).

The mantra for natural gas markets remains unchanged — “too…much…gas” — analysts at Tudor, Pickering, Holt & Co. said Friday. The decline posted in Louisiana may be a “false positive,” they said, because there are enough rigs operating in the Haynesville Shale to fuel supply growth. “But, assuming Haynesville was flat, the implied annualized decline rate for conventional [Louisiana] production is minus 30% y/y (vs. minus 15% expected).”

Gross production of gas is not the same as marketed production, which is calculated by subtracting gas used for repressuring, quantities vented and flared and non-hydrocarbon gases removed in treating or processing operations from gross production.

EIA on Thursday reported a withdrawal from storage of 81 Bcf for the week ended Dec. 23, a somewhat smaller decline in natural gas inventories than what traders were expecting (see Daily GPI, Dec. 30, 2011). The figures showed a draw in the East Region of 53 Bcf; the West Region pulled 19 Bcf, and the Producing Region withdrew 9 Bcf. As of Dec. 23, working gas in storage stood at 3,548 Bcf, according to EIA estimates. Stocks are now 297 Bcf higher than last year at this time and 428 Bcf above the five-year average of 3,120 Bcf.

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