U.S. Energy Information Administration said natural gas production in Permian Basin reached a record 21 billion cubic feet per day in 2022 – an increase of 14 percent over 2021 – and continues to increase in 2023. The latest EIA drilling productivity report says Permian is expected to produce 22.878 Bcfd in July– up 60 million cfd from 22.818 Bcfd in June. Oilprice.com said last week, “Almost all the natural gas produced in the Permian is a by-product of oil production. As oil production rises, so does natural gas production. However, the EIA said it expected production growth across the U.S. to slow over the coming months, which suggests natural gas output growth will slow too. Changes in the rig count also suggest that a slowdown in production growth is imminent.”
Goldman Sachs analysts told Reuters, “The recent sharp drop in the rig count is consistent with our expectation that producers will continue to respond to low gas prices by cutting investment.” And Primary Vision Network said its frac spread count fell by four in the week that ended June 2. It has fallen five consecutive weeks (by 38 crews) and is 23 less than the count of a year ago.