BG Group Plc (BG/), the U.K.’s third- largest oil and gas producer, cut is forecast for U.S. shale-gas output in 2015 by 58 percent because of lower fuel prices.
BG expects to produce the equivalent of 80,000 barrels a day of gas from U.S. shale fields in 2015, down from an earlier forecast of 190,000 barrels, said Chief Executive Officer Frank Chapman. The company has trimmed its output forecast in the period to “a bit more” than 1 million barrels, down from the previous forecast of 1.2 million barrels a day.
“We agree actually with the market view that the prices in the longer term will sit somewhere in the $4 to $6” per million British thermal units range, Chapman told reporters today. “Our view is they will be in a lower part of that.”
U.S. gas futures fell about 39 percent in the last year to $2.48 today on increased production and milder winter weather. BG, based in Reading, England is examining plans to export liquefied natural gas from the U.S. to Europe or Asia, where prices are as high as $17 per million British thermal units.
The driller will cut the number of rigs it has operating at U.S. gas-shale fields to 8 from 35, it said today in an annual strategy briefing. Gas producers, such Royal Dutch Shell Plc and BP Plc, have cut back on shale gas drilling since last year after a boom in production made the U.S. the largest producer of the fuel in the world.
BG forecast that about 45 million tons of LNG can be exported annually from the U.S. in 2020, or about 10 percent of the country’s current demand, Chapman said. The company is working on plans to ship the fuel from Sabine Pass and Lake Charles terminals in Louisiana, and from British Columbia in Canada.
To contact the reporter on this story: Eduard Gismatullin in London at firstname.lastname@example.org
To contact the editor responsible for this story: Will Kennedy at email@example.com