By OGJ editors
HOUSTON, Nov. 3 -- The shift of capital spending and drilling toward liquids-rich and away from dry gas basins because of the relatively high price of oil to gas will only have a slight negative effect (if any) on US gas production, according to Barclays Capital Inc.
It noted that a simple calculation tends to overestimate the effect of the shift on gas production because liquids-rich areas also have high initial gas production rates.
Barclays also determined that rigs moving to liquid-rich areas such as the Eagle Ford and Granite Wash are from less-productive areas or areas such as the Haynesville in which the time to drill and complete a well is much longer.
The net effect is that rigs are more productive in the liquids-rich areas and therefore the shift will affect only slightly US gas production growth, according to Barclays.