Energy Prospectus

In the most recent news letter you state:

• Natural gas production in the
U.S. is falling. According to the
EIA’s Drilling Productivity Report,
gas production in the seven
major basins is now declining by
over 0.4 Bcf per day month-aftermonth.
We are on-track to start
next winter with ~4.0 Bcf per day
less gas production. That’s more
than 6% of our total supply.

My question is if the rate of production delcline is currently .4 BCFD/M - would that decline rate not be accelerating as last years wells rapidly decline? If so - would the total drop in production by next winter not be greater than 4.0 BCF/D?

Yes, the rate of decline may accelerate for onshore wells. I am not clear on how much gas is coming from offshore. I do know that natural gas from the Gulf of Mexico is way down from where it was ten years ago.

Take a look at the chart on page three of the newsletter. Also, there is a lot of good stuff about gas supply on the Range Resources website. Look through the slides from their most recent presentation, which you can find under the Investor tab.

Gulf of Mexico produced 3.5 Bcf per day in November. Total U.S. gas production in December was 78.3 Bcf per day.

Our total gas supply, when you include gas from Canada is now around 85 BCF per day. So, you can see that if production drops 4 Bcf per day and exports go up 2 Bcf per day it is a BIG DEAL.