Second-quarter natural gas production fell only slightly — 0.7% — from the first quarter of 2002, according to a survey by Raymond James Energy, but the consulting firm is nevertheless predicting full-year results will be in line with its previous prediction of a minus 5-6%.

Raymond James had been expecting a sequential drop-off of about 1.5% in the second quarter, but said results may have been skewed by the fact that Shell’s deepwater production increased during the quarter by roughly 200 MMcf/d when maintenance was completed on its Brutus and Auger platforms. That production had been subtracted in the first quarter, when maintenance was begun, contributing to that quarter’s 3% drop in production from the last quarter of 2001.

“Maintenance performed on large facilities and/or new project start-ups may skew individual quarters, however, we continue to believe the industry will sustain quarterly declines in the range of 1.5% until drilling activity levels increase substantially,” Raymond James said. The drop in year-over-year second quarter results was 5.1%. The results came from a tally of 33 of the largest natural gas producers in the United States, representing about 49% of production. The company said its total of 2Q production was 25.9 Bcf/d.

The consulting firm’s results came in close to those announced last week by Lehman Brothers, which reported 2Q production down sequentially from the previous quarter by 0.2% and down by 5.3% from the second quarter 2001. Lehman, which says its survey covers 44 producers with 70% of U.S. production, put second-quarter production at 26.8 Bcf/d (see Daily GPI, Aug. 12).

The Raymond James report in its “Stat of the Week,” said “the gas rig count remains at depressed levels and far short of the number required to increase production. As a result it is very likely that we may see a decline more in line with the trend line from the last five quarters….Even if activity levels were to resume the feverish pitch seen in early 2001, it would take at least 6-12 months for the incremental production to begin reducing the current rapid decline rate.”

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.