Yahoo Finance Does the EIA Expect US Natural Gas Production to Fall in June?
Estimates for Key Shales: Will Crude Oil Production Fall in June?
Key US shale natural gas production
The EIA (U.S. Energy Information Administration) released its Drilling Productivity Report on May 16, 2016. The EIA expects lower natural gas production at six key US shales by June 2016 compared to April 2016. It expects production to rise at only one key shale during the same period.
Total natural gas production at the key shales fell in April 2016 compared to March 2016. By June 2016, total natural gas production at the seven key shales is expected to fall by 2% compared to production in April 2016.
The EIA estimates that natural gas production will fall by 0.9% in May 2016 compared to April 2016.
Utica Shale to surge, Eagle Ford Shale to fall sharply
Among the key shales, only the Utica Shale is expected to see a rise in natural gas production in the next two months. Its production is expected to rise by a marginal 0.1% in June 2016. The Utica Shale accounted for ~8% of total US shale natural gas production in April 2016.
At the Marcellus Shale, the biggest natural gas–producing shale in the United States, production is expected to fall by ~0.6% from April 2016 to June 2016. The Eagle Ford Shale is the third-largest natural gas–producing shale among the seven key shales. It could see a ~6% production fall by June 2016, the most significant fall in natural gas production among the shales.
How this will affect oilfield services companies
Reduced natural gas production will negatively affect the revenues and incomes of oilfield equipment and services companies such as Baker Hughes (BHI), Weatherford International (WFT), Halliburton (HAL), and Precision Drilling (PDS). Baker Hughes accounts for 2.0% of the Energy Select Sector SPDR ETF (XLE).
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