(Platts Gas Daily – June 11, 2013) Production seen flat or rising this year and next
Rig counts are hovering near 14-year lows. Wellhead prices are having a hard time holding above $4/MMBtu. And traditional gas drillers are increasingly shifting toward basins rich in oil and liquids.
Yet many analysts see overall dry gas production levels holding steady this year and next, perhaps even rising modestly, driven by a confluenceof factors both upstream and midstream, according to a Platts analysis.
Among those factors: the unexpectedly high volume of gas being produced in association with oil and natural gas liquids; the construction of pipeline takeaway and processing capacity in the Appalachian Basin, which is expected to free up stranded gas in the Marcellus and Utica shales; increased drilling efficiencies, which allow producers to drill the same number of wells with fewer rigs; and the leveling out of decline rates in several maturing basins.
That's not to say dry gas production isn't sliding in some of the country's major basins. It is, but analysts note that those declines are being offset by the booming Marcellus.
“Appalachian production volumes (Marcellus and Utica) have grown from 4 Bcf/d at the first of 2011 to 6 Bcf/d in late 2011 to more than 11 Bcf/d today,” said Rusty Braziel, president and principal energy markets consultant for RBN Energy. By contrast, the aggregate of all other Lower-48 producing regions has fallen by about 4 Bcf/d over the same period, Braziel said.
