Houston-based oil and gas exploration firm Seneca Resources curtailed natural gas production in the Appalachian Basin by 7.3 billion cubic feet (Bcf) on the back of reduced natural gas prices.

Announced last week in third-quarter earnings of National Fuel Gas (NFG), of which Seneca is the upstream affiliate, natural gas production at the Appalachian Basin was cut to a single rig in mid-June, Kallanish Energy reports.

Despite the curtailment, Seneca recorded natural gas production of 56 Bcf during third-quarter, a year-on-year increase of 2% compared to the same period last year (54.7 Bcf). The increase was attributed to production from new Marcellus and Utica wells, which were acquired by NFG in a $541 million deal at the end of July from Royal Dutch Shell.

Seneca’s Appalachian average realized natural gas price was $1.92 per million cubic feet (Mcf), a decrease of $0.44 per Mcf from the prior year, attributed to lower NYMEX prices and lower spot pricing at local sales points in Pennsylvania.

NFG stated that the curtailment of its Appalachian spot market volumes is expected to continue while low prices persist through the remainder of the summer.

The company said it expects New York Mercantile Exchange (NYMEX) natural gas prices to average $1.85 per million British thermal unit (MMBtu) for the remainder of fiscal 2020.

“Based on current forward differentials between NYMEX and regional spot prices for natural gas, the Company is assuming that its remaining approximately 6 Bcf of fiscal 2020 Appalachian production volumes exposed to the spot market will be curtailed,” NFG said in its earnings report.

This post appeared first on Kallanish Energy News.