Natural gas production fell 3% in April

Natural gas production in the lower-48 states has declined for the second consecutive month and was down 3% in April from the same month in 2016, according to IHS Markit. In April, average production was 70.2 billion cubic feet per day.

Production in Texas and the Gulf of Mexico declined, with Texas experiencing the lowest level of production in nearly 10 years. In April, Texas production fell 0.1 billion cubic feet per day, averaging 16 billion cubic feet per day. In the Gulf of Mexico, production was an average of about 3 billion cubic feet per day in April.

“Producers in the Gulf have recently shifted focus to deeper offshore drilling targeted at oil plays with lower associated gas production,” said Jack Weixel, vice president for analysts at PointLogic Energy.

In the Northeast, production has risen to 23 billion cubic feet per day, comprising of about 33% of total production in the lower-48 states. In the Southeast, production has been flat.

“We see prices rising for natural gas, but the market is still sluggish in responding with new production. So the same dismal level of production persists for months on end,” Weixel said. “The treadmill has gotten steeper to replace existing production, which is in decline, particularly in shale producing areas. So the rig count is going up, but production is still catching up.”

Henry Hub Natural Gas Futures on the New York Mercantile Exchange was $3.35 per million Btu, down 7 cents or 2.07% midafternoon Monday (May 15).