Wednesday, February 02, 2011
The recent “torrid pace of growth” of natural gas production will slow as storage and pipeline capacity limits are tested, leading to a 5% cap on production growth in 2011, according to a report released Wednesday by Bentek Energy.
Bentek stated market conditions, upcoming operational issues and low prices will send producers a signal to put on the brakes and adjust drilling plans.
A number of factors could also help slow the pace of growth, including the winding down of drilling to hold production and a decline in drilling cost-carries from jointventure deals, the report stated.
Bentek said the expiring held-by-production obligations will allow operators to shift rigs away from peripheral leases and concentrate activity in the sweet spots, such as rich gas plays, in order to increase margins in a low-price environment.
While rig counts may fall, production should remain relatively flat or even grow in some key basins as producers focus on these sweet spots and work through an inventory of non-completed wells, Bentek said
Please go to www.platts.com to read the rest of this report.