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EIA: US natural gas production will establish new monthly record high in 2022

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Oilfield Technology,

In its December Short-Term Energy Outlook (STEO), the US EIA forecasts that US dry natural gas production will increase from 95.1 billion ft3/d in October 2021 to 97.5 billion ft3/d by December 2022, a new record high. The previous monthly record of 97.2 billion ft3/d was set in November 2019.

In early 2020, COVID-19-associated declines in demand resulted in a corresponding natural gas price decrease and reduced drilling. As a result, monthly natural gas production declined to a low of 87.3 billion ft3/d in May 2020. Dry natural gas production in the US has generally risen since then, with a brief exception in February 2021, when winter weather substantially reduced natural gas production in Texas.

The EIA's forecast for US natural gas production growth includes expected output from natural gas-directed drilling activity as well as natural gas production associated with crude oil production (associated gas). In both the Haynesville region (mainly in Texas and Louisiana) and the Appalachia Basin (mainly in Pennsylvania and West Virginia), increased drilling activity and greater output per well have led to more natural gas production in recent months, according to metrics compiled in our Drilling Productivity Report. Associated natural gas production has also increased as producers have completed wells that were previously drilled but uncompleted (DUC wells).

The number of natural gas-directed rigs – rigs drilled primarily in natural gas-bearing formations – decreased throughout 2019 and the first half of 2020, based on data from the Baker Hughes Company. By late August 2020, the natural gas-directed rig count had fallen to 68 rigs, the fewest in Baker Hughes’s data series, which dates back to 1987. The number of natural gas-directed rigs has since increased to 102 in mid-November 2021. Rig counts are considered a leading indicator of newly drilled wells, but increases in drilling efficiency (the number of new wells each rig can drill) and new-well production have complicated the relationship between rig counts and eventual production.

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