EIA DPR: Big Increase Coming for June U.S. NatGas Production
Once again the number crunchers at the U.S. Energy Information Administration overestimated natural gas production in the Marcellus/Utica in the agency’s monthly Drilling Productivity Report (DPR), but not by much. Yesterday the EIA issued its latest DPR, for May, with estimates of how much production we will see in the seven largest shale plays in the U.S. for both May and the upcoming month of June. Last month for April’s report, the EIA predicted the M-U would produce 35.64 billion cubic feet per day (Bcf/d) of natural gas in May (see EIA DPR: Big Revision DOWN for April Natural Gas Production). Yesterday’s report revises the May number down to 35.48 Bcf/d. Fairly close. What about June? And what about Haynesville and Permian production?
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We don’t normally recommend books to read–especially those we haven’t read yet ourselves. Today we’re making an exception. Last week we received an email about a new book published on Amazon by Chris Bentley, the former President and CEO of Bellatorum Resources, an investment management firm that formerly specialized in Texas oil and gas royalties and mineral rights. Bentley recently published a book called 
Every “game” comes to an end when play must stop and a winner, and a loser, are declared. If you watch basketball you know that the final couple of minutes can last what seems like a lifetime. One team, up by 2 or 3 points, gains possession of the ball and they are in the lead. What do they do? Play keep-away. Run the clock down so the opponent can’t score to tie or pull ahead. What does the opponent do? Try to foul the person with the ball, or call for a time-out, in order to stop the clock and (hopefully) when the ball is thrown in and play resumes, regain possession and score. In a sense, that’s what is happening with the 94% complete Mountain Valley Pipeline (MVP) project, a 303-mile pipeline from West Virginia to southern Virginia. Right now anti-American Big Green groups have possession of the ball (having co-opted leftist judges) and they are ahead by one point, hoping to end the game by running out the clock. Will they succeed?
Despite screaming and howling at the moon by leftist Big Green groups, including the Sierra Club and Public Citizen, the Federal Energy Regulatory Commission (FERC) last week issued orders allowing two huge new LNG export facilities extra time to complete building those projects. On May 6, FERC issued a 31-month time extension to Cheniere Energy to build its third train (“Stage 3”) project at the existing Corpus Christi Liquefaction facility. FERC issued a three-year time extension to Energy Transfer’s Lake Charles LNG project. Both facilities have the potential to be fed, in part, by Marcellus/Utica molecules.
For how many years now have we had to suffer through insufferable “reporting” that tells us the day of Big Oil is over. That woke investors have turned their backs on oil and gas companies and that no new investment in O&G will happen ever again. Now that oil and natgas prices are through the roof and oil and gas companies are turning in record profits with gobs of free cash flow, buying back shares and issuing dividends–guess what has happened? Wall Street investors have turned their backs on high-flying, woke Big Tech companies and instead are investing where the money is–in oil and gas. We love it!
The Enverus rig count, as of Wednesday, stood at 806, up by three from the week before. We are only 32 rigs away from the pre-pandemic high of 838 rigs. Last week the Marcellus operated 45 rigs (up by one), while the Utica operated 11 rigs (same as the week before), for a total of 56 active rigs in the M-U. Our chief rival, the Louisiana and Texas Haynesville, operated 71 rigs last week, picking up two rigs from the week before.
The Natural Gas Supply Association’s (NGSA) 2022 Summer Outlook projects “upward pressure” on the natural gas market compared to last summer because of robust industrial demand, lower storage inventories, and the ripple effect on energy commodities caused by Europe’s energy crisis as it struggles for independence from Russian oil and gas. The NGSA Summer Outlook predicts a summer-over-summer increase of 3.6 billion cubic feet per day (Bcf/d) in average daily production (supply). NGSA says the supply increase (4% higher than last summer) is actually 1 Bcf/d more than demand for natgas will grow this summer. Oops.