Natural gas production in the Northeast is expected to be lower year-on-year based on the overall producer guidance forecasts from the large publicly traded Northeast producers such as EQT, CNX Resources, Chesapeake Energy, Antero Resources, Range Resources, Southwestern Energy, Coterra Energy, Gulfport Energy, National Fuel Gas, and private producer Ascent Resources. EQT expects their natural gas production to be flat in 2023 compared to 2022. They do expect some sequential growth in the 2nd quarter 2023 compared to the 1st quarter 2023 with more turn-in-line wells. EQT plans to reduce drilling later in 2023. EQT is also seeing higher cost producers cutting back in the Northeast. CNX Resources is forecasting their production to be down year-on-year in 2023 by 3.4%. The main reason for the lower production forecast is due to a failed wellbore at one of their fields causing major delays in well completions. They expect their production to be back to where it was in 2022 by middle of 2023.
Chesapeake Energy is expecting their 2023 Northeast production to be down 1.2% compared to 2022. They plan on dropping 1 rig and 1 frac crew in the Northeast for 2023. The company is reducing activity in the Northeast and in the Haynesville due to much lower natural gas prices. Chesapeake remains bullish on natural gas prices in the long run, which is to be expected from a dominantly natural gas producer.
Antero Resources is estimating their natural gas production to be down 2.8% year-on-year in 2023. They expect natural gas demand to increase materially in 2024 and beyond with the advent of new LNG export projects. They see all-in breakeven prices between $2.32 and $3.02 per MMbtu in the Appalachian and $3.06 and $3.77 per MMBtu in the Haynesville. Range Resources is forecasting their natural gas production to be up 1% in 2023. They plan on keeping their frac crews at 2 and their rig count at 3 for 2023, which would be unchanged to 2022 levels.
Southwestern Energy expects their Northeast production to be down 3.3% in 2023 compared to 2022. They expect to reduce 1 rig in the Northeast, while keeping their frac crews the same in 2023 compared to 2022. They don’t plan on building any DUC inventories for 2023. Coterra Energy is estimating their Northeast natural gas production to be lower by 1.1% in 2023. Coterra expects to keep their rigs and frac crews the same in 2023 compared to 2022. Coterra is shifting more of their capital to the Permian basin where oil prices are relatively more attractive (for now). They are still bullish long term on natural gas prices.Gulfport Energy is one of the few Northeast natural gas producers expecting to see a significant increase in their 2023 production compared to 2022. Their natural gas production in the Utica is expected to be higher year-on-year by 3.8% in 2023. Gulfport is playing catch-up on their production in 2023 because their production in 2022 was lower by 3.1% compared to 2021.
National Fuel Gas is another notable exception in the Northeast. Their natural gas production in the Northeast is forecasted to be higher by 7.8% in 2023 due to continued well outperformance and more wells turned-in-line than expected. National Fuel Gas also stated that they have now seen the peak in service costs and that they are beginning to fall. Private producer, Ascent Resources, expects their 2023 natural gas production to be lower by 3% in 2023. Their rig counts and frac crews are expected to be unchanged in 2023 compared to 2022.
Summary
Overall, the total of the Northeast natural gas producers adds up to about a 0.8% year-on-year drop in production in 2023 compared to 2022. Prices are now below all-in costs ($2.32-$3.02 per MMBtu) during the summer months for 2023 and producers are beginning to take notice.
