News / Business
Natural Gas Production Outlooks Conflicting
Some producers are looking for significant production declines, while others continue to report a ramping up of drilling activity in 2010. Which is it?
In the fall of 2008, the natural gas drilling rig count hit 1,606. However, economic woes and falling natural gas prices have caused the rig count to be sliced in half. By mid-July, the natural gas drilling rig count reached a bottom of 665 and since then it has recovered to 734 as of November 6, 2009. One would have expected that production would have been sliced in half as well, but that hasn’t been the case. According to data from the Energy Information Administration (EIA), production declines have been minimal and production has actually risen in the state of Louisiana.
“Don’t get too excited just yet,” says Valerie Wood, President of Energy Solutions, Inc. “Production data lags drilling rig count data by 6-12 months. We expect production declines to become more evident in the first quarter of 2010. Unfortunately, trying to quantify what those declines may look like is virtually impossible because historical data is no longer helpful because of new horizontal drilling techniques and shale gas supplies.”
In its latest edition of The Advisor, Wood discusses the conflicting outlooks about production. “Producers that are projecting production declines predict that production levels will be down 5 Bcf/day by mid-2010 and that a bottom in production will occur in 2011. Conversely, others are ramping up drilling activity in 2010 and touting new discoveries in shale regions,” says Wood.
The Advisor is a newsletter specifically written for businesses as an educational tool and guide about the natural gas industry. It keeps companies alert and aware of ever-changing conditions and costs associated with natural gas to help them make intelligent gas purchasing decisions. The Advisor is written by Valerie Wood, President of Energy Solutions, Inc., a company that specializes in helping manufacturing companies and larger users of natural gas more effectively purchase their natural gas supplies. Request a complimentary copy of the November edition of The Advisor by sending an e-mail to request-nov-pr12@energysolutionsinc.com or call (608) 848-9589.
About Energy Solutions, Inc.
Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 25 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.
