Natural gas production in the United States fell to a near 16-month low in late May, according to an industry survey. The output decline came as producers slowed drilling activity and cut output at marginal wells amid collapsing commodity prices. US gas output dropped to 85.5 Bcfd on May 20, 9% lower than its record high of 94.3 Bcfd set in November last year, the survey showed.
The output fall was also in line with low crude prices and a decreasing number of active oil-directed drilling rigs. The US rig count declined by 12 to 357 last week, marking the eleventh consecutive week of decline. The US has lost nearly 485, or about 57% of active rigs since January.
Nearly half of the decline came from The Permian Basin. Other oil-focused fields such as the Eagle Ford, Bakken, Denver-Julesburg, and the SCOOP/STACK also saw a steep decline in their rig counts which fell by 155 since late January. On the other hand, major gas-focused fields, including the Marcellus, Utica, and Haynesville, only lost 25 rigs over the same period.
The steep decline in oil-focused fields’ rig counts resulted in falling associated gas output. The Permian Basin led the decline, with production averaging 10.6 Bcfd over the past two weeks, compared to 1.2 Bcfd average in March. Over the same period, associated gas output from SCOOP/STACK declined by 760 MMcfd, followed by the Bakken (-620 MMcfd) and the Denver-Julesburg (-370 MMcfd). Meanwhile, production from the Eagle Ford inched up slightly.
Gas production from the Haynesville increased by 600 MMcfd from its March average, leading the production gain among US dry gas fields. Over the same period, the Utica saw an output increase of 100 MMcfd, while output from the Marcellus fell.
