The 11 majors and independents that produce about 14% of the natural gas for the Lower 48 are reporting a 1.7% sequential decline over the first quarter and a 5.8% decline over a year ago, according to research by Lehman Brothers’ analyst Thomas R. Driscoll. The analyst, who surveys a total of 45 producers that overall account for 70% of U.S. production, has revised a previous forecast of flat production for the quarter, and now predicts either a small increase or decrease, in the range of +0.4% to 0.4%, from the first quarter of this year.

Those producers that have already released second quarter results have reported gas volumes of 5,597 MMcf/d, down 1.7% from the first quarter and almost 6% from a year earlier, Driscoll said, and missed Lehman’s estimates by 1%. In a “high-end case,” in which production actually will be up slightly, Driscoll said the remaining 34 companies in the survey will have to meet the analyst’s production estimates to go up slightly. In a “low-end case,” if the 34 miss Lehman’s estimates by an average of 1%, there will be a small decline over the first quarter of 2002, and a 5.4% decline year-over-year.

“We are forecasting that full-year 2002 natural gas production volumes will fall 4.5-5.25% from 2001 levels,” said Driscoll. “This follows an estimated production increase of 0.7% in 2001 and a decline of 2.05% and 1.3% in 1999 and 2000.”

According to Lehman’s, Houston-based Spinnaker Exploration will have the largest second quarter production increase, up 27% from the first quarter of this year, but year-over-year, the company will be down about 9%. Also posting positive production results in the second quarter include Vintage Petroleum, 9%; XTO Energy and Pogo Producing, 8%; BP, 7%; and Ocean Energy, Forest Oil and Chesapeake, 5%. Those reporting declines for the quarter include Denver-based Tom Brown, 12%, USX Marathon 11%; Swift Energy, 9%; Burlington, 8%; and Murphy Oil and Nuevo Energy, 7%.

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