Report: US natural gas production in June fell slightly from May

Natural gas production in the US Lower 48 averaged 72 billion cubic feet per day (Bcf/d) in June, down about 0.6 Bcf/d from the May average, according to Bentek Energy, an analytics and forecasting unit of Platts. On a month-over-month basis, June natural gas production was down less than 1% from May.

The US Energy Information Administration (EIA) will publish its domestic production estimates for April on or around July 31.      

“The month-on-month US production decline observed in June was largely attributed to continued maintenance events in the Northeast,” said Sami Yahya, Bentek energy analyst. “The combination of reduced drilling and completion costs, as well as considerable efficiency gains in the field, has helped producers across most regions better cope with the distressed commodity prices.”

According to Bentek's data analysis, the average cost of service companies is down about 20% since last year. Also down are drill times, which have declined, on average, by three to five days this year in multiple regions.

“This translates into the ability of producers to utilize less rigs but drill more wells,” Yahya said, pointing out that some producers have indicated that, in the past, they tended to drill and complete a cluster of wells within an area and then move on to the next cluster. But now, they say that they are more likely to drill all of the clusters first and come back only later to complete those wells – saving money by not bringing completion rigs back and forth.

“This can also be viewed as completion deferment,” Yahya noted. “It’s also worth noting that high-grading – or focusing on higher initial production rate areas – remains the primary trend in most areas.”

Bentek data analysis suggests 2015 US natural gas production will average approximately 72.8 Bcf/d (which has recently been reduced from 73 Bcf/d due to persistent maintenance and outages), with growth occurring throughout the year, driven almost exclusively by continued production gains in the Northeast.

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