U.S. producers expect gas output to rise later in 2024

| By Tom Young

Several U.S. upstream gas producers anticipate a rebalanced market will prompt increased output during the latter part of 2024, having cut domestic production in Q1 to manage lower prices.

Antero Resources, Chesapeake Energy, CNX Resources and EQT Corp. curtailed output while EOG Resources kept output flat, based on Evaluate Energy analysis of Q1 compared to Q4.

Source: Evaluate Energy Corporate F&O Data

Pre-hedge realized gas prices fell for all the firms in Q1 aside from CNX (which saw a small increase) and are significantly below prices for all five firms compared to Q1 last year.

Source: Evaluate Energy Corporate F&O Data

Since December 2023, U.S. natural gas supply has dropped from 106 bcf/d to approximately 98.8 bcf/d, according to the U.S. Energy Information Administration (EIA).

Antero Resources said recently it is running only two drilling rigs and one completion crew and expects to continue this level of activity for the coming quarter.

Chesapeake operates eight rigs and two completion crews and plans to drop an additional rig in the Marcellus around mid-year, it noted recently. The firm curtailed 200 mmcf/d of production during the quarter and expects to curtail 400 mmcf/d of production in the second quarter.

CNX Resources delayed completion activities on three Marcellus Shale pads and expects production to move lower again this quarter. The firm will continue to operate one drilling rig and a “partially utilized” completion crew this quarter.

EQT said it plans to continue to curtail 1 bcf/d of production until May and could extend curtailments based on market conditions.

EOG has moderated activity in the Dorado field in Texas and said it is delaying well completions to manage volumes through the summer.

Price uptick

Most firms expect the market to rebalance over the summer thanks to curtailments and growing power sector demand.

“We’ve seen strong demand on the power side during the last two summers and we expect that to obviously continue into this summer,” said EOG Resources CEO Ezra Jacob on the firm’s first quarter results. “So, strong summer demand coupled with reduced supply, not only from some operators curtailing, but…from the reduction in rig activity.”

Expected demand growth from the LNG sector provides additional hope for improved pricing in the fourth quarter.

“Once you get through that October period, you see the inflection of LNG demand really start to pick up [and] we think that market starts to change pretty swiftly,” said EQT CFO Jeremy Knop, speaking on the firm’s first quarter results.

EQT continues to make investments that will drive production volumes in 2025 and 2026, when prices are expected to improve. Chesapeake plans to “build the productive capacity needed to deliver for consumers when demand recovers,” according to CEO Nick Dell’Osso. The firm is sticking to its 2024 production guidance of 2.7 bcf/d and will allow curtailed volumes to start to flow back to the market in the second half of this year.

CNX expects to have continued lower capital expenditure for the remainder of the year as it pursues a more cautious strategy. “We will continue to monitor natural gas prices as we move into 2025 and will adjust capital activity levels to reflect the best possible capital allocation decision at that time,” said CNX CEO Nicholas Deluliis.

Source: Evaluate Energy Corporate F&O Data


EQT recently agreed to acquire Equitrans Midstream in an all-stock transaction. “This deal catapults EQT to the absolute low end of the North American natural gas cost curve, providing free cash flow durability in the low parts of the commodity cycle, while simultaneously unlocking unmatched price upside by mitigating defensive hedging needs,” said EQT CEO Toby Rice.

EOG and Antero Resources both said they remained focused on organic growth in the near-term, rather than any further M&A.

Chesapeake remains in merger talks with Southwestern, with the deal now deferred to the second half of the year.

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