U.S. Says Shale Gas Output Rose 24% in May From Year Earlier

Natural-gas production from shale formations rose in May on increased supplies from the Marcellus deposit even after prices fell to a 10-year low, Energy Department data show.

Total output from shale formations in the continental U.S. averaged 25.58 billion cubic feet a day in May, 24 percent higher than a year earlier and up 1.7 percent from April, according to slides that accompany a presentation the department will make to Congress Aug. 1. Shale production has gained 5.7 percent this year.

Production from shale deposits with oil and other liquids has gained as dry-gas output has declined in response to decade- low prices, the department said in its Short-Term Energy Outlook on July 10. Gas futures on the New York Mercantile Exchange dropped to $1.902 per million British thermal units April 19.

May output from the Marcellus shale in the eastern U.S. averaged 6.85 bcf a day, up 6.4 percent from the previous month and gained 28 percent during the first five months of the year. May 2011 production averaged 3.37 bcf daily.

Haynesville shale output in Louisiana and Texas averaged 6.92 bcf a day, down from 6.93 billion in April. Production from the region has declined 2.4 percent this year. Output averaged 6.43 billion cubic feet a day in May 2011.

Barnett Output

Output at the Barnett shale in Texas was 4.67 bcf daily, from 4.66 billion in April, department data show. Production dropped 1.7 percent versus May 2011.

The average for Eagle Ford shale gas output in southern Texas was 1.52 billion cubic feet a day in May, up from 1.51 billion the previous month. Production has gained 6.3 percent this year. Output averaged 820 million cubic feet a day a year ago.

Woodford shale output in Oklahoma averaged 1.14 billion cubic feet a day in May, up from 1.13 billion both in April and during May 2011. Fayetteville production in Arkansas declined 1.1 percent this year to 2.68 billion cubic feet a day. Output averaged 2.69 billion in April and 2.54 billion in May 2011.

Bakken gas output in North Dakota held steady at 190 million cubic feet a day in May versus the previous month. Production is up 19 percent from a year earlier. Gas from the Antrim shale in Michigan, Indiana and Ohio averaged 290 million cubic feet a day in May, unchanged versus April and May 2011.

Gas for August delivery on the New York Mercantile Exchange climbed 3.6 cents, or 1.2 percent, today to $3.117 per million Btus, the highest settlement price since Dec. 22. Gas is up 4.3 percent this year on increased demand from power generators that switched from costlier coal.

To contact the reporter on this story: Naureen S. Malik in New York at nmalik28@bloomberg.net;

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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