Friday 10/27 9:00am CST
SynMax Head of Research Leslie Palti-Guzman will discuss global LNG markets including the impact of the ongoing Israel-Hamas war.
According to pipeline production estimates, natural gas production for the Lower 48 US during the month of October 2023 is coming in much higher than what was predicted by the long-term production forecast.
This is prior to the recent unplanned maintenance on the Permian Highway pipeline of around 0.4 Bcf/d, which will last until October 30th, and has caused a temporary drop in production in West Texas. Furthermore, recent limited storage injection capabilities on Dominion's storage fields in the Northeast will also temporarily cause Northeast production to drop.
The long-term production forecast, which is based on producer forecast guidance, and adjusted for private fracking activity relative to public fracking activity, had expected production to be around 101.8 Bcf/d for October 2023. Instead, natural gas production has actualized at around 103.1 Bcf/d, 1.3 Bcf/d higher than expected.
October is typically a maintenance month where pipelines take down capacity. So far, maintenance in October 2023 has been much lower than usual, causing production to be greater than expected. September 2023 production had averaged around 102 Bcf/d. One implication for when October production increases significantly from September is that the traditional seasonal November production increase does not occur since it already happened a month early in October.
The sub-regions where the long-term production forecast model had underestimated October 2023 production are Permian New Mexico, North Dakota, and Wyoming. These sub-regions are predominantly oil-based production and oil production has also been significantly higher than expected relative to our forecast.
Permian New Mexico production has averaged about 0.5 Bcf/d higher than expected in October 2023.
North Dakota production has averaged about 0.3 Bcf/d higher than expected in October 2023.
Wyoming production has averaged about 0.2 Bcf/d higher than expected in October 2023.
Hyperion Update
Rigs and frac crews in the Permian basin have rebounded significantly, as expected, ahead of higher natural gas prices for the upcoming winter heating season and higher WTI crude oil prices. The Permian basin includes West Texas and the southeastern portion of New Mexico.
Rigs and frac crews in the Permian hit their low point in September 2023 and have rebounded significantly as expected. The rebound should last into the rest of 2023 and 2024 as long as crude oil and natural gas prices hold at current levels and or rebound further from current levels.
