EIA Projections for November: Key US Shale Natural Gas Production
EIA Expects US Shale Production to Fall More in November
Key US shale natural gas production
The EIA (U.S. Energy Information Administration) released its Drilling Productivity Report on October 13, 2015. The EIA expects less natural gas production at four key US shales by November compared to September. It expects production to rise at three key shales during the same period.
Aggregate natural gas production at the key shales already fell in September compared to August. By November, aggregate natural gas production at the seven key shales is expected to fall 1.1% compared to production in September. The EIA estimates that natural gas production will fall by 0.40% in October compared to September.
The EIA also projected that crude oil production at the seven key shales will fall 3.2% from September to November. Read the previous part in this series to learn more about crude oil production.
Utica to surge, Eagle Ford to see sharp decrease
The Utica Shale is the fastest natural gas–producing shale in the United States. Its production is expected to accelerate in the next two months. Production there is expected to grow by 4% over the next two months, the highest rate among the key shales. The Utica Shale accounted for 7% of the key US shales in September. The EIA expects the Haynesville Shale, the third largest shale among the key US shales, to increase production by 0.9% by November.
At the Marcellus Shale, the biggest natural gas-producing shale in the United States, November production is expected to fall by 2.4% from the September level. The Eagle Ford Shale is the second-largest natural gas producer of the seven unconventional shales. It could see production fall 3.6%, the most significant fall in natural gas production among the shales. The Niobrara Shale is a relatively smaller shale. It could see a 2.4% fall in natural gas production by November.
How this will affect producers
Companies such as EQT (EQT) and Consol Energy (CNX) may slow down production. This will decrease Marcellus Shale production in the next two months. Reduced Eagle Ford Shale production could be led by producers such as Encana (ECA) and BP (BP). This would be negative for these Eagle Ford producers.
Reduced Niobrara natural gas production could be driven by producers such as Bonanza Creek Energy (BCEI). In contrast, companies like Chesapeake Energy (CHK) may drive greater Utica production. This will be beneficial for them.
EQT accounts for 0.1% of the SPDR S&P 500 ETF (SPY).
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