Q2 Survey Shows Lower 48 Production Up 1.8% Qtr/Qtr: Credit Suisse | BRYYY Message Board Posts


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Msg  56948 of 660930  at  8/9/2010 4:39:41 PM  by

sophocles


Q2 Survey Shows Lower 48 Production Up 1.8% Qtr/Qtr: Credit Suisse

 

Q2 Survey Shows Lower 48 Production Up

1.8% Qtr/Qtr

Q2 Survey Shows U.S. Lower 48 Production Up 1.8% Qtr/Qtr. With our

lower 48 organic natural gas survey essentially complete (~57% of preroyalty

lower 48 volumes), we find producers grew production 1.8% qtr/qtr

with volumes for the E&Ps rising 2.8% sequentially, while production for the

majors fell 0.6% (see Exhibit 1). This compares to the EIA-914 data which

shows lower 48 natural gas production up 1.7% in April and May vs. Q1’10.

Q2 production continued to climb higher as producers increased the natural

gas rig count 28% or 213 rigs from the beginning of the year to the end of

Q2 while horizontal drilling has risen as well, up 49% or 282 rigs (includes oil

and gas horizontal rigs).

Growth Likely to Continue for Remainder of 2010. Despite a recent

slowdown in rig count growth, we expect to see production continue to grow

throughout the remainder of the year as producers work through larger than

normal completion backlogs and bring more wells to sales. A common

theme throughout the Q2 calls was a growing backlog of wells in areas such

as the Haynesville and Eagle Ford that could take several months to work

through. Additionally, drilling activity appears to remain fairly strong given the

need to hold acreage and the addition of new onshore rigs currently being

built (we estimate ~85 rigs).



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