The Daley Note: August 31, 2023
Gas flows have been sliding in pipeline samples from the Anadarko Basin, suggesting that slowing rig and completion activity could be taking a toll on production.
Anadarko Basin pipeline samples tracked by East Daley Analytics have averaged 3,726 MMcf/d to date in August, down nearly 6% M-o-M. Anadarko samples in August have trended to the lowest point of the year, down nearly 18% since the start of 2023 (see figure).
Pipeline scrapes are an imperfect measure of trends in the Midcontinent, accounting for about 55% of regional natural gas production. These surveys do not capture deliveries to intrastate systems in Oklahoma and Texas, and flows can shift with swings in local demand.
Nevertheless, other evidence points to declining supply. Anadarko rig counts have fallen in 2023 along with lower natural gas prices. Rig counts in the basin have averaged 42 so far in August, according to East Daley’s Energy Data Studio, down from an average of 69 rigs in January 2023.
Midstream operators are starting to report impacts from the slowdown. Producers are deferring completion work on new wells in hopes of waiting out low gas prices, according to EnLink Midstream (ENLC). On its 2Q23 call, executives said some operators on ENLC’s Central Oklahoma (COK) system have been building inventory of drilled but uncompleted wells (DUCs) in anticipation of more favorable prices this winter.
EDA’s current outlook is for Anadarko gas production to hold flat in the near term. We model gross gas production of ~8.8 Bcf/d in the basin through the end of 2023, according to Energy Data Studio. We expect Anadarko gas production to decline in 2024 as lower rig activity leads to fewer new well connects, down nearly 0.5 Bcf/d on average vs 2023 (see figure). The latest market updates point to some downside risk to the near-term outlook for the Anadarko. – James Taylor and Andrew Ware Tickers: ENLC.
Sign Up for the Crude Oil Edge
East Daley’s Crude Oil Edge provides bi-monthly updates on the US Crude Oil Market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on crude oil flows, production growth, and import and export characteristics. Sign up now for the Crude Oil Edge.
New Webinar: Crude Oil Market Update: 5 Reasons to be Bullish and 1 Not to Be
August 31, 2023 | 10:30 AM MT | Online Webinar
Join East Daley for a webinar exploring US Crude Oil market fundamentals. We provide reasons why expect a strong and healthy outlook for US crude. We will dissect global and domestic economic headwinds and what these mean for US midstream companies, as well as the effects of production growth in the US and infrastructure projects to support it. RSVP HERE
Energy Data Studio
East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.
Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.
Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact insight@eastdaley.com.
Review the Year Ahead in Dirty Little Secrets
The 2023 Dirty Little Secrets is Now Available! Is Midstream on the cusp of another infrastructure wave? Find out in our new annual report.
Dirty Little Secrets reviews the outlook for Midstream and commodity markets in 2023 and the years ahead. East Daley discusses the outlook for crude oil, natural gas and NGLs and the impacts to midstream assets in our 2023 Dirty Little Secrets annual market report. Click here for a copy of the 2023 Dirty Little Secrets report.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.
