Lower-48 State Gas Output Gain Most in 16 Months, EIA Says

U.S. natural gas production in the lower 48 states rose in February by the most in 16 months as new wells came online from shale deposits in the Northeast and North Dakota, a government report today showed.

Production in the lower 48 states rose 1.3 percent to 73.22 billion cubic feet a day from a revised 72.3 billion in January, the biggest month-over-month percentage gain since October 2011, the Energy Information Administration’s monthly EIA-914 report showed. Output, which increased for the first time in three months, was up 1.8 percent from a year earlier.

Total U.S. output, including Alaska, rose 0.8 percent to 82.88 billion cubic feet a day in February from a revised 82.2 billion the previous month, the most since November, according to the report from the Energy Department’s statistical arm. Production was up 1.1 percent from February 2012.

“New wells were brought online in the Marcellus and Bakken Shales,” which drove the biggest volume gains, the EIA said in the report. Output in Texas, the top producing state, gained with new Eagle Ford shale wells while New Mexico production increased with warmer weather, the government said.

Gas production in the contiguous states declined in January as frigid weather froze wells, the EIA said last month.

Surprising Report

The report of a gain in February output was a bit of a surprise as the industry “probably faced the most significant well freeze-offs since the winter of 2007,” said Teri Viswanath, director of commodities strategy at BNP Paribas SA in New York. “Given persistent cold weather, I had anticipated sequential declines through March.”

Supplies from the “other states” category, which includes the Marcellus shale deposit in the Northeast, jumped 2.1 percent to 24.87 billion cubic feet a day from a revised 24.35 billion in January. Production in February was a record in government data going back to 2005.

Texas output gained 1.4 percent to 22.12 billion cubic feet a day, the biggest monthly percentage increase since April 2012.

Oklahoma output rose 0.2 percent to 5.69 billion cubic feet a day while production in Wyoming increased 0.3 percent to 5.79 billion. It was the first gain for both states in three months.

Production in Louisiana slid 1 percent to 7.29 billion cubic feet a day in February, the lowest output since January 2011 following eight straight monthly declines. Daily output in the Gulf of Mexico fell 2 percent to 4 billion cubic feet a day, a five-month low.

Natural gas futures for June delivery fell 4.4 cents, or 1 percent, to $4.348 per million British thermal units at 1:58 p.m. on the New York Mercantile Exchange. Gas has climbed 30 percent this year.

The EIA-914 report covers gross withdrawals, which include gas used for repressuring, quantities vented and flared, and non-hydrocarbon gas removed in treating or processing operations.

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: Dan Stets at dstets@bloomberg.net.

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