Natural Gas Intelligence
Marcellus Still Hasn't Gotten the Memo on Production Cuts

Friday, July 27, 2012

Despite dry gas production curtailments and rig lay-downs nationwide, Northeast production will grow by 1 Bcf/d from its current 8.3 Bcf/d by the end of the year as the Marcellus Shale "seems impervious to the unfavorable economics," Bentek Energy LLC said in its Forward Curve Quarterly.
The analytics firm said roughly half that growth is being driven by the dry gas region in Northeast Pennsylvania.

"The lack of infrastructure in the region has left an inventory of approximately 1,000 wells that are ready to fill the new pipeline expansions expected later this year (mostly in Q4)," Bentek said. "The remainder of the 1 Bcf is expected to come from the Southwest wet Marcellus, where the rig fleet has doubled since the beginning of 2012 as producers shift investment toward the liquids-rich regions of the Marcellus."
The additional supply will likely displace gas back into the Dawn, ON, and Ohio Valley markets, Bentek said, which will push down Southeast prices for winter 2012-2013.

Back in March, Bentek pointed out that the Marcellus was the standout in an overall environment of stalling production growth (see Shale Daily, March 15).

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