29
Apr

Natural Gas Supply Slide Show – February 2009 Data

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EIA released their natural gas monthly for the month of February 2009 this afternoon. In a nutshell, the aggregate number hides the beginning the fall in the biggest production segment, Texas, and its still early to see the decline in rig activity in the gas numbers. Bulls who want falling numbers now and who "won't believe it until they see it" will find little to jump up and down about with the release of this data.

Highlights & Key Takeaways

  • Headline Number Looks Bad: Lower 48 marketed gas production grew from 58.66 Bcfgpd in January to 59.37 Bcfgpd in February. 
    • For Lower 48 gas production, February represents a high in terms of natural gas production

    • This is up 0.2 Bcfgpd from February 2008

  •  Gulf Of Mexico Volumes Led Gains: up 0.2 Bcfgpd from January
    • Part of this is a function of the last of the volumes returning from Ike and Gustav. According to the MMS, recovery of gas production volumes should be comlete by May; in February about 13% of pre storm production was still offline although not all of this produciton will return.
    • Another portion is increased asociated gas production from the deepwater as new large oil developments were ramping up.
    • Gulf volumes were still running 1.65 Bcfgpd short of year ago levels in February.

  • Texas showed a third month of declines and is off 0.8 Bcfgpd from its November peak.

 

  • The drop in rig activity would largely not yet be reflected in the production data as most areas were slower to come off than Texas:
    • US Average Gas Rigs (which includes Texas):
      • 3Q08: 1,571
      • 4Q08: 1,479 (down 6% from prior quarter)
      • 1Q09: 1,053 (down 29% from prior quarter)
      • 2Q09 average to date: 775 (down 26% from prior quarter)
      • Current: 742
    • Texas Average Total Rigs:
      • 3Q08: 925
      • 4Q08: 879 (down 5% from prior quarter)
      • 1Q09: 578 (down 34% from prior quarter)
      • 2Q09 average to date  389 (down 33% from prior quarter)
      • Current:: 374

 

  • Drilled but not completed gas wells is thought to be around 600 at present. This phenomenon of drilling and waiting for completion prices to tumble began in earnest in the 4th quarter (this time around) and has accelerated in recent weeks to become more a widely speculated about topic. I see this as having two impacts. The first will be a quicker decline in production that the rig counts would suggest, even taking into acount the increased number of higher rate wells being completed in the newer shales and later, a smoothing of the decline rate as these wells are turned to sales.

 

 

3 Responses to “Natural Gas Supply Slide Show – February 2009 Data”

  1. 1
    Wyoming Says:

    Europe’s Cushing

    http://www.bloomberg.com/apps/news?pid=20601109&sid=ae.YS7TBN0jY&refer=home

  2. 2
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Thursday – Natural Gas Preview + Oil Review + Lots of Earnings Says:

    […] Natural Gas Supply Slide Show – February 2009 Data […]

  3. 3
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Wrap – Week Ended 5/3/09 Says:

    […] Natural Gas Supply Slide Show – February 2009 Data […]

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