Major producers are in a “free-fall” when it comes to U.S. natural gas, with production tumbling by about 400 MMcf/d or 4.4 Bcf each quarter, said the head of Dallas-based Pioneer Natural Resources.

“Independents for a couple quarters have been able to arrest the majors’ decline, but [with the] second quarter announcements, it’s back to about a break-even,” said Scott Sheffield, president and CEO of the independent oil and gas producer, at the Rocky Mountain Natural Gas Strategy Conference & Investment Forum earlier this month.

As far as onshore drilling intensity, “the quarter-by-quarter pickup…has been mostly by independents,” he told producers, geologists and pipeline executives at the Colorado Oil & Gas Association-sponsored conference. “The majors just in the last two quarters are starting to put a little bit more gas rigs to work.”

The Rocky Mountains and deepwater Gulf of Mexico continue to be the premier gas supply areas in the nation, Sheffield said. But “deepwater is really not going to add that much [gas in longer term]…because most of the future discoveries are primarily oil,” he noted.

“So the Rockies [are] really the last game in town” when it comes to gas growth in the Lower 48 region, according to Sheffield, whose company is in the process of acquiring gas-rich Evergreen Resources of Denver, CO. The transaction is expected to close the last week of September, he said.

Noting that he has been in the energy sector for 30 years, he said “this is the first time I’ve seen so much excess cash flow in the industry.” There are “billions of dollars sitting on the balance sheet of majors today…because we’re short in general in the world and in North America of places to spend those dollars,” Sheffield noted.

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