EQT Straps on its Army Boots
Nearly a year into torturous natural gas prices and still no sign of a MacGyver option for gas producers to escape. The situation at hand has created a life-size Rubik’s Cube to manage the madness of oversupply. Record production of crude oil in the Permian—along with record production of gas as a byproduct of that crude—has led producers to exercise their least favorite option. Namely, cutting output. Now, the nation’s largest is joining that action full throttle in response to an administration twist and making a big noise in the process.
Reese Energy Consulting today is following the latest news from Pa.-based EQT, which has stomped the production brakes with a 10-pound army boot, taking 1 BCFD off the market through March. The company expects the cut in output will add up to 30-40 BCF in 1Q—18% of EQT’s total production in the Marcellus/Utica. EQT’s announcement might have raised eyebrows and lifted natural gas futures for the time being, but it’s just the latest move by other large gas producers who’ve taken scissors to production following the administration’s disastrous pause of new LNG permits.
The onerous decision, on top of guttered gas prices and record associated gas production, has created a constellation of concern that’s put producers like EQT on a self-preservation hotseat. Chesapeake Energy is slashing its output by a whopping 25%–this, amid its recent $7.4 acquisition of gas giant Southwestern Energy Company. Coterra Energy, Antero, and Comstock Resources have recently pulled a slice-and-dice trigger on production and budgets while waiting to see what lies ahead in a time of coping and hoping. Hello, Super Tuesday.