Sept. production levels fell 1.2%, signaling retreat from peak 2016 monthly averages
HOUSTON – US natural gas production levels in the lower 48 states declined by nearly 1.2 per cent in Sept. 2016 compared to Aug. 2016 levels, according to analysis from IHS Markit.
Sept. decline drops year-to-date production levels 1 per cent compared to the same period in 2015.
Overall, lower 48 U.S. dry gas production averaged 71.8 Bcf/d, IHS Markit said, which represents a 0.9 Bcf/d (1.2 per cent) decrease from production levels in Aug. 2016.
IHS Markit business unit PointLogic Energy tracks US production levels on a daily basis, across 92 producing areas in the lower 48 states.
According to the PointLogic Energy analysis, in addition to month-to-month comparisons, annual production figures also declined year-over-year, with Sept. 2016 production levels down by nearly 1.8 Bcf/d, or by 2.4 per cent compared to Sept. 2015 levels.
“The Northeast, Rockies and South Texas regions of the country saw the largest production drop-off month-on-month, down more than 0.7 Bcf/d combined,” said Jack Weixel, vice president for analytics at PointLogic Energy, part of IHS Markit.
IHS Markit said this production decline is directly attributable to sustained low prices for the commodity, which have persisted since the end of winter.
“Within the Northeast, dry portions of the Marcellus (Pennsylvania and West Virginia) saw declines as the producing area waits on downstream infrastructure buildout to support depressed regional wellhead prices. South Texas saw its fifth straight month of declines as producers continue to retreat and move rigs further west to the Permian,” said Weixel.
“Henry Hub has become one of the highest-priced locations in North America,” said Sam Andrus, senior director of North American natural gas analytics at IHS Markit.
Sept. data shows that the only producing areas that showed any modest gain month-on-month include the Anadarko in Oklahoma and Kansas, and small portions of the Mississippian basin, which is also in Oklahoma.
“Regional production, largely from associated gas, is down, while regional demand is up. A warmer-than-normal summer, combined with growing LNG and Mexico exports, forced net storage withdrawals in the South Central region this summer. The resumption of injections in September helped keep Henry Hub prices up and has driven significant gas-to-coal switching,” said Andrus.
PointLogic Energy derives real-time natural gas production data from publicly available interstate pipeline flow data in the lower 48 United States.
