Results from Natural Gas Producers Confirm Supply Growth

Each month the Energy Information Administration (EIA) releases its 914 data, which summarizes natural gas production growth in the United States.  The EIA data has continued to show strong production gains, particularly in Louisiana, even though the natural gas drilling rig count has declined substantially.  Some analysts have questioned the accuracy of the EIA 914 data, but 4Q2009 results from producers provide support for natural gas production growth.

“Fourth quarter 2009 earnings from many natural gas producers were higher than anticipated,” says Valerie Wood, President of Energy Solutions, Inc.  “Production levels have fallen by less than 1 percent from last year’s levels, even though the natural gas drilling rig has been cut in half.  Increased efficiencies, lower service costs, and new technologies have made the natural gas marketplace entirely different from the one that existed two years ago.”

Producers are continuing to announce production expansions and capital budget increases.  “This is just additional evidence that producers are willing to continue to drill in a lower-priced environment,” says Wood.  “In fact, two producers have taken steps to enter into long-term sales contracts, which are also an indication of plentiful natural gas supplies in the future, and plentiful supplies correlate to lower prices.”

Additional information on natural gas supply growth and natural gas price forecasts can be found in Energy Solutions’ most recent analysis, Natural Gas Pricing Outlook, a 40-page comprehensive analysis that provides in-depth insight into natural gas prices for 2010 and 2011. 

Learn more by visiting www.NaturalGasOutlook.com.

About Energy Solutions, Inc.

Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 50 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.