Natural Gas Weekly
Marcellus Shale Should Be Key Component of U.S. Natural Gas Production Growth In 2012
15 December 2011 ¦ 12 pages
citigroupgeo.com
Marcellus To Be Key Component of 2012 U.S. Natural Gas Production Growth –
Although our E&P coverage group has continued to shift activity to oil & liquids rich
plays, the Marcellus shale remains a notable exception with production of ~3.0 Bcf/d
currently but projected to exit 2012 at roughly 4.6 Bcf/d, or ~7% of total U.S. onshore
natural gas production. On average, we project that total Marcellus production will
increase nearly 1.5 Bcf/d in 2012 versus this year and consequently account of around
two-thirds of our total projected, although perhaps conservative, increase in U.S.
natural production next year. In fact, every public energy company with operations in
the Marcellus expects to grow production from the play in 2012. Meanwhile, production
from our coverage group in the Haynesville shale is expected to be about flat, on
average, in 2012 versus this year even though we project a continued drop in the
horizontal rig count here. Interestingly, even the Marcellus horizontal natural gas rig
count has fallen by 10 over the past two months as the composite spot price fell below
$3.00/MMBtu in late November although this trend is not expected to persist. Overall,
apart from growth in natural gas volumes in liquids-rich plays and that associated with
oil production, we expect production growth in the Marcellus shale to sharply outpace
flat or perhaps any potential decline in Haynesville production in 2012. |
