NatGas Plays Like M-U & Haynesville Getting Slammed by Assoc. Gas

For years, we have watched natural gas production in oil-focused plays like the Permian (in Texas and New Mexico) steadily rise. It was an annoyance, a curiosity, mostly an afterthought because production in the Marcellus/Utica, where we concentrate our attention, was also rising and quite dominant. But the M-U hit a plateau in December 2019 and in January 2020 began a long-term trend of staying about even (see EIA Dec ’19 Drilling Report: M-U Production Drops 1st Time in Yrs). Some months, gas production in the M-U goes higher, some months lower, but over the past few years, it has remained in the 35-36 Bcf/d (billion cubic feet per day) range. The problem (for the M-U and other gas plays) is that the Permian continues to add gas production month after month and year after year. It's a competitive threat.

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