EIA sees gas output from key fields falling

OREANDA-NEWS. September 17, 2015. Gross natural gas production from the top US oil and gas fields by volume declined slightly in August and should drop further this month as new output fails to offset declines from aging wells.

Total production from those seven fields — which include the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian basin and Utica — dropped to 45.17 Bcf/d (1.3bn m?/d), down by 0.4pc from July, according to the US Energy Information Administration's (EIA) monthly Drilling Productivity Report.

The report focuses on the most prolific US fields and includes production of associated gas from oil wells. The fields included in the report accounted for 95pc of domestic oil and natural gas output growth between 2011 and 2013, the EIA said.

Only production from the Utica shale, a rapidly growing gas field in Ohio, rose in August, climbing by 1.3pc from the prior month and by 79pc from a year earlier. Production from Marcellus shale, the biggest US gas field by volume, declined marginally to 16.4 Bcf/d but was up year-over-year by 12pc. Some producers in the Marcellus region, which includes Pennsylvania and the surrounding states, have choked back production because of low prices resulting from a lack of pipeline infrastructure.

The data highlight staunch US production even as oil and gas drilling has fallen on a collapse in energy prices. US benchmark crude prices have rebounded from six-year lows but have remained below \\$50/bl, well beneath the levels to stoke additional oil field development. Spot prices at the Henry Hub are trading near \\$2.70/mmBtu, down by about 30pc from a year earlier.

Oil and gas producers have reined in drilling, pushing the US rig count to 13-year lows. But efficiency gains and falling service costs have prevented a nose dive in production.

The largest decline in August gas output was in south Texas' Eagle Ford shale, where production dropped by 1.6pc from July to 7.04 Bcf/d. The Eagle Ford is the second-largest US gas field.

Output from all seven fields is projected to fall by another 0.4pc in September, the EIA said.