The U.S. natural gas rig count peaked more than a year ago in August 2010 and continues to drift slowly lower, but the country’s still swimming in gas and there’s no drought in sight, Raymond James & Associates Inc. said last week.

The energy team, led by J. Marshall Adkins, said the “squirreliness” of last winter — wellhead freeze-offs, slowdowns in activity and pipeline delays — appeared to muddy the underlying U.S. gas supply growth curve. However, analysts still are placing bets that domestic supplies will jump by 4-5 Bcf/d in 2012 based on public exploration and production (E&P) company data that they compiled for 3Q2011.

“We believe that there are a number of underlying supply trends that the ‘supply rollover pundits’ are simply not factoring into their models now that the gas rig count has finally begun to move lower,” Adkins and his colleagues wrote. “The biggest one is the fact that there are a bunch of horizontal oil wells being drilled today that are producing way more associated gas (most more than five times more productive) than the average vertical gas well drilled just five years ago. Remember, we are not even counting these as gas wells!”

The forecast is part of Raymond James’ regular quarterly survey of public E&P data. For more than a decade the energy team has tracked reported gas output from U.S. producers, which comprises about half of total domestic output, as a “fact check” on Energy Information Administration (EIA) 914 data.

The 3Q2011 survey confirmed that publicly traded producers have resumed an “upward growth trend,” indicating a sequential gas supply increase of 2.3%, or 0.75 Bcf/d, from 2Q2011.

Based on the September data by itself — the third quarter ended Sept. 30 — data points to “a significant upswing in gas supply” ahead of the EIA-914 September report, which is expected within a few weeks.

Assuming that private producer growth trends mirror their larger peers, which Raymond James said always has been the case, the upcoming EIA figures should reflect a “significant bounce back in U.S. gas supply after several months of flat-lining.”

Based on the analysts’ calculations, September output could be up 1 Bcf/d from August.

The sharp climb in output isn’t the first time that pipeline constraints and/or weather had muddied a few months’ worth of underlying supply growth, said the analysts. And it won’t be the last.

Specifically, the Raymond James gas storage model indicated that the domestic gas equation went from 1.5 Bcf/d “looser” (more gas in the system) in August to about 2.5 Bcf/d plus looser in September year/year.

“The continued gas production growth is also supported by industry pipeline flow models. Ultimately, we continue to believe that the underlying growth trend for U.S. supply remains intact — even with the slow bleed in overall active gas rigs and the washout in offshore gas supply.”

Most important, the new data appears to indicate that domestic gas output will jump by more than 4 Bcf/d — 6% or higher — in 2012.

The analysts acknowledge that U.S. gas supply growth will moderate eventually but “we continue to believe that industry can still grow gas production with less than 700 active natural gas rigs” versus around 900 active today.

Raymond James’ public company data suggests that the September EIA-914 data will be “unfortunate” for gas prices. The U.S. gas market likely will be 2-4 Bcf/d oversupplied this winter, “which means gas prices will find it very difficult to break above $4/Mcf.”

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