EQT Corporation, currently the largest U.S. natural gas producer, said on Monday it would strategically curtail output in March in response to low benchmark natural gas prices in America.
EQT is curtailing approximately 1 billion cubic feet per day (Bcf/d) of gross production beginning in late February and through the month of March. These curtailments are expected to total approximately 30 to 40 Bcf of net production during the first quarter.
The production cut is "in response to the current low natural gas price environment resulting from warm winter weather and consequent elevated storage inventories," the corporation said, adding it would "reassess market conditions" at the end of this month.
U.S. natural gas prices jumped by 6% on the news, with the Henry Hub front-month price surging by 5.94% to $1.944 per million British thermal units (MMBtu) early on Monday.
Record 2023 natural gas production and one of the warmest winters for decades sunk the U.S. benchmark gas price to the lowest in decades. At the end of February, the price slid to around $1.55 per million MMBtu-the lowest level since 1995, except for the Covid-induced crash in energy prices in 2020.
Amid the current glut and low prices, some of the top gas producers have already announced they would reduce output this year.
Antero Resources released one drilling rig in December 2023 and released one completion crew in February 2024 as a result of the low gas prices.
Comstock Resources, for its part, plans to reduce the number of operating drilling rigs it is running from seven to five.
EQT Corporation lowered earlier this year its production range guidance "as a response to the price environment we're in and wanting to make sure there is flexibility," CFO Jeremy Knop told the Q4 earnings call in February.
"The market is asking for not only production curtailments, but also activity reductions," Knop said.
Chesapeake Energy, poised to become the top U.S. gas producer after the planned merger with Southwestern Energy, will be reducing its production in 2024, too.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More