EQT Rolls Back Curtailments of Natural Gas Production

SEATTLE (Oil Monster): EQT Corp. has ended the temporary curtailment of about one-third of its natural gas production amid better prices for natural gas and the return of a transmission line that had been out of commission in the spring.

Oil and gas analyst firm Enverus used pipeline transmission data to show that EQT's 1.4 billion cubic foot per day shut in of natural gas production announced in May returned by the first week of July. Enverus said EQT had brought back about 250 million cubic feet of natural gas production within a week of the curtailing but waited until early this month for most of the rest to return.

"For the (pipeline) meters in Pennsylvania, flows have returned to early May levels or higher," Amber McCullagh, senior vice president of Enverus, told the Business Times on Thursday. "There are flows on the Ohio meters that are still down a little bit versus early May levels."

Production in Ohio is down about 150 million cubic feet per day, a small amount, compared to what EQT (NYSE: EQT) had been sending via pipeline in early May. But that could also be related to natural declines in EQT's Ohio Utica portfolio, as the bulk of the company's drilling and completions have been in southwestern Pennsylvania.

EQT (NYSE: EQT) did not return a request for comment. It is likely to discuss a change in the curtailments as well as any other operational conditions during Monday's scheduled second-quarter earnings call with analysts. The curtailments will bring down EQT's total production of natural gas in the quarter; it told analysts May 7 that it was thinking about shifting some of its natural gas production to 2021 to take advantage of higher prices compared to 2020.

McCullagh said May is a period of soft demand and soft pricing in the natural gas industry. And Appalachia's access to other natural gas markets was also constrained by the May explosion of a 30-inch pipe connected to the Texas Eastern Pipeline that moves natural gas between Texas and New York. That pipeline was out of commission for a little while but since returned to partial capacity, but in May that kept Appalachian producers like EQT from using the pipeline to carry natural gas to market.

But EQT apparently didn't bring the volumes back right away, McCullagh said.

What's different now? The recent heat waves have led to better demand and better pricing for natural gas due to electrical demand from air conditioning units.

"It's been very hot across the country and including in the Northeast, so there's more market available for Appalachian gas in the region," she said.

One of the other Appalachian natural gas drillers that had announced a curtailment, Montage Resources Corp. (NYSE: MR), reversed the curtailments by June 1. It announced Wednesday that its second quarter production would be on the high end of its forecast of between 535 billion cubic feet and 555 billion cubic feet of natural gas a day.

CNX Resources Corp. (NYSE: CNX), which is based in Canonsburg, has shut in about 375 million cubic feet per day of production for the same reason, summer pricing versus expected winter pricing. It had expected to bring back some of its production by July and was going to adjust it even further by Nov. 1. CNX, based in Canonsburg, will be holding its quarterly earnings conference call next week.

Courtesy: www.article.wn.com