March US natural gas production down nearly 2% from February

Natural gas production in the lower 48 US averaged 72.2 billion cubic feet per day (bcf/d) in March—down just over 1 bcf/d compared to the February average, according to Platts Analytics. On a month-over-month basis, March natural gas production was down nearly 2% from February.

The US Energy Information Administration (EIA) will publish its domestic production estimates for February on or around April 29, 2016.     

"Following a US gas production record-setting month of February, production volumes in March dwindled," said Sami Yahya, analyst with Platts Analytics. "Most major basins contributed to the production decline in some way. However, the two main culprits were the Northeast and Texas, where production drops in each were roughly 0.5 bcf/d month on month."

Yahya pointed to the flooding in Texas that hindered its natural gas production in March. The impact from flooding was significant, lasting several weeks. The main basins affected were the Haynesville, East Texas, and Texas Gulf Coast onshore.

"The influence of this severe weather was considerable and it's important to note that the impact from flooding typically lasts much longer than the impact of freeze-offs," Yahya said. "When wells are shut in due to a flooding, the process of turning them back on is not an easy one because of all the physical inspections that are required. But even before the inspections occur, company crews must battle the inaccessible and blocked roads to regain access to the wells, all of which tend to elongate the shut in time. Additionally, since flooding could cover large areas in a field, it could potentially carry toxins to surrounding areas, which then must also be checked before a well may be restored to production."

The decline seen in March within the Northeast was the product of multiple factors, including maintenance, lower prices, and relatively warm temperatures, noted Yahya.

Northeast production averaged 22.2 bcf/d in March, down about 530 MMcf/d from the previous month.

"Maintenance activities on REX in early March suppressed production volumes, that coupled with warmer than normal temperatures. Thus, demand did not prove high enough to prompt higher production volumes. Additionally, the recent downtrend in Henry and Dom South prices added to the growing pains of Northeast production. Dominion South prices averaged below $1.00/MMbtu for March, with a low of $0.83/MMbtu on March 9," explained Yahya.

Platts Analytics data analysis suggests 2016 US natural gas production will average approximately 70.9 bcf/d, with some growth geared toward the end of the year. This will mark a year-over-year decline of just more than 1%.

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