"The natural gas production record achieved in February is largely attributed to the Northeast, which also is still helping offset the declines seen in other major U.S. basins," said Sami Yahya, Platts Bentek energy analyst. "A combination of adequate demand and lack of freeze-offs helped producers push their production volumes to new highs. Typically the month of February is impacted considerably every year with a bout of freeze-offs, but this year the cold temperatures did not linger long enough to cause meaningful impact."
Northeast gas production reached nearly 23.1 Bcf/d in February, rendering an average of 22.7 Bcf/d for the month. This average was about 0.8 Bcf/d greater than the January average and about 1.5 Bcf/d more than the December 2015 average. For basins outside the Northeast, the February average was nearly flat or slightly declining from the previous month.
"While the number of active rigs in the Northeast is currently at its lowest historically, the availability of inventory wells is helping producers keep their production numbers leveled," Yahya noted. "We track the number of drilled-but-uncompleted wells in the Northeast monthly. Based on the latest numbers, the number of inventory wells has been declining steadily since November of 2015, which is a signal the producers are dipping into their inventory more than ever."
Prior to November of 2015, the Northeast had about 2700 wells in backlog inventory, whereas in January of this year, the number is barely more than 2000 wells.
"The Utica is the only place in the Northeast where the inventory numbers are not taking a steep dive," said Yahya. "The big focus now within the Utica is the drier areas, where the initial production rates of new wells are incredibly high. This means you do not need to bring online as many wells to help keep production afloat."
Platts Bentek data analysis suggests 2016 U.S. natural gas production will average approximately 71.6 Bcf/d, with some growth geared toward the end of the year. This will mark a year-on-year decline of less than 1%.
The Bentek data analysis is based on an extensive sample of near real-time production receipt data from the U.S. lower 48 interstate pipeline system. Platts' Bentek production models are highly correlated with and provide an advance glimpse of federal government statistics from the U.S. EIA.
This Bentek Energy U.S. natural gas production data estimate will be published every month covering the previous month's output activity. Bentek's dry gas production estimates are not observed data and are based on pipeline receipt nominations and certain state production data.
Bentek Energy, which specializes in energy market analytics and is recognized as the industry leader in natural gas market fundamental analysis, was acquired by Platts in 2011. For more information about natural gas supply and demand fundamentals and Bentek Energy, visit www.bentekenergy.com. For more information about natural gas spot price trends, or Platts, a leading global energy, petrochemical and metals information provider, visit the website at www.platts.com.
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