Key Takeaways Strong demand fundamentals combined with the sheer magnitude of the base supply decline are underappreciated by the market 1 U.S. Natural Gas Demand to Remain Strong in 2019+, Led by Exports - Total U.S. demand expected…
U.S. Gas Supply and Base Decline Significant U.S. base decline requires substantial new supply just to maintain flat production 100 Maintenance Production Level Current(1): Base Decline 85 Bcf/d 90 % Contribution to Current Supply…
U.S. Gas Supply and New Supply Wedge Material demand growth through 2023 requires even more new supply 100 Current(1): YE 2023E: 96 Bcf/d 85 Bcf/d Marketed Dry Gas Production Forecast 90 Base Decline 2% % Contribution to Supply…
U.S. Gas Supply Growth Forecast Almost all U.S. gas supply growth over the next 5 years is expected to come from the Appalachian and Permian Basins YE 2023E: 96 Bcf/d 100 Current: 2% 1.8 Bcf/d Marketed Dry Gas Production Forecast…
New Gas Supply Breakdown 47% of new gas supply needed in the 2019-2023 period is forecast to come from plays with breakeven gas prices that are higher than the long-term 2020-2023 strip 2.67/MMBtu New Supply Contribution by Basin…
Dry Gas Basin Breakeven Analysis Most of the dry gas plays in the U.S. have breakeven prices above the current 2020-2023 strip at 2.67/MMBtu - Dry gas producers will require higher realized prices than the current strip to incentivize…
Permian Gas Supply Growth While Permian associated gas is expected to be a key contributor to U.S. gas supply growth, the Permian is not expected to dominate the 85 Bcf/d U.S. dry gas supply market which faces a 27% base decline in…
Appalachian Gas Supply Growth Appalachian production including the Marcellus and Utica Shales, contributes 36% of U.S. natural gas supply today and is expected to grow to 38% by 2023, or 37 Bcf/d - 31 Bcf/d of current production is…
U.S. Natural Gas Demand Forecast Total U.S. natural gas demand is expected to grow by 12.6 Bcf/d, or 15% from 2018 2023 absorbing U.S. production growth 2018-2023 Growth % Other: 0% of demand(2) 0% 100 U.S. Dry Marketed LNG…
Exports Drive Demand Growth 11 Bcf/d expected increase in U.S. natural LNG projects under construction and gas exports from 2018-2023 exports to Mexico will drive U.S. demand U.S. Natural Gas Exports (Bcf/d) 20 THE U.S. IS A NET…
2019 is a Big Year for LNG Capacity Buildout Of the 9.3 Bcf/d LNG export capacity additions under construction, 4.0 Bcf/d (43%) are expected to come online in 2019 A number of 2nd wave LNG projects seeking FID in 2019 could add +3.0…
Strong Near-Term Natural Gas Fundamentals Current 2,197 Bcf storage level is 14% below 2019 end of withdrawal is currently trading 5-year average despite 7.8 Bcf/d year over at 1,330 Bcf which is 20% year production growth below the…
D&C Capital Reductions To-date, Appalachian peers have announced an average 19% reduction in their 2019 drilling and completion capital spending relative to 2018 levels, moderating supply growth expectations Appalachian Peer D&C…
Does Natural Gas Strip Reflect Current Fundamentals 2.72/MMBtu average Nymex gas strip price from Nymex natural gas prices averaged 2019-2023 not expected to stimulate 3.10/MMBtu in 2017 and 2018 enough drilling to meet the…
Summary Strong Demand Growth and Challenges to New Supply Are Underappreciated by the Market Exports Lead Strong U.S. Natural Gas Demand Growth Through 2023 LNG Exports Expected to Double in 2019 to 6.2 Bcf/d; Doubling again by…
Appendix
U.S. Coal to Gas Switching: Momentum Continues Since 2015, natural gas has been the more economic fuel source, a trend that is expected to continue The gap between natural gas and coal electricity generation is expected to widen over…
Near Term Natural Gas Fundamentals Power Burn Average monthly power burn has increased 3.2 Bcf/d from the prior year and is 17% above the five year average July had the highest monthly power burn on record at 39.3 Bcf/d, or 21% above…
Base Decline Calculations U.S. Overall Decline Rate Detail Time Average (Bcf/d) Year-Over-Year Decline Rate (%) Q4 2018 85.28 - Q4 2019 62.42 (27%) Q4 2020 51.38 (18%) Q4 2021 44.65 (13%) Q4 2022 39.95 (11%) Q4 2023 36.37 (9%)…
LNG Potential Second Wave Projects 2019 is a key year for final investment decisions on second wave LNG facilities that are targeting 2023-2024 start-up Potential Capacity LNG Facility Comments/Status/Timing (Bcf/d) Potential Q1…
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