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Feds expect decline in shale gas production

A new federal government study released Wednesday predicted the nation’s shale gas production will begin to wane starting next month.

The U.S. Energy Information Administration’s monthly “Drilling Production Report” projected a nearly 1.5 percent production decrease at the country’s seven major sale regions.

This should not come as a shock to industry watchers. In April, the administration warned that the domestic drilling industry was facing significant headwinds as plummeting prices and oversupply have prompted companies to scale back spending, backtrack on production and lay off workers.

Wednesday’s report, stated natural gas-rich Marcellus shale production in Pennsylvania and West Virginia, is expected to decrease to 44.9 billion cubic feet daily from a high of 45.6 bcf/d in May.

The Marcellus basin, which is centered in the north central part of West Virginia, is expected to lose an estimated 60 million cubic feet per day during the projected periods, the report states.

Southern Ohio’s Utica basin is expected to see the smallest declines of about 3 million cubic feet a day.

The Eagle Ford basin is Texas is expected to experience the hardest hit during the decline, witnessing a 112 million cubic foot loss daily, the report predicts.

“Several external factors could affect the estimates, such as bad weather, shut-ins based on environmental or economic issues, variations in the quality and frequency of state production data, and infrastructure constraints,” the report reads.

The report also found net natural gas production from new wells drilled in the nation’s shale reserves is not enough to counter the expected decline from legacy wells. The EIA attributed that phenomenon to the decline in the number of drilling rigs deployed across the country.

“Given the substantial drop in rig counts since the fourth quarter of 2014 in each of the [shale] regions and growing declines in production from legacy wells, productivity increases are less able to completely offset lower rig counts and legacy-well declines,” EIA’s report found.

This article was written by DANIEL TYSON from The Register-Herald, Beckley, W.Va. and was legally licensed through the NewsCred publisher network.

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