At the IHS Forum, September 17-19, 2013, in Houston, TX, IHS experts Bob Ineson and Bob MacKnight discuss the North American Gas Supply and Production Outlook. The shale boom continues to amaze, with production holding steady despite a sharp drilling slowdown. Improvements in well performance and increased efficiency in drilling and completion operations are driving down the unit cost of new supply, and changing expectations about future natural gas prices. www.ihs.com

1. North American Gas Supply
and Production Outlook
September 18, 2013 9:15 – 10:45 a.m. Bob Ineson, Managing Director, IHS
Bob MacKnight – Director, IHS
Link to online presentations
Session introduction
The shale boom continues to amaze, with production holding steady despite a sharp drilling
slowdown. Improvements in well performance and increased efficiency in drilling and
completion operations are driving down the unit cost of new supply, and changing
expectations about future natural gas prices.
Key Takeaways
Production has been going sideways since the beginning of 2012, and reduced drilling activity owing to
sub-$4.00 per MMbtu prices is the reason why. Production growth will – and will need to – resume in
earnest as demand growth kicks in in the back half of the decade.
Technology continues to improve, with better well performance and reduced time to drill plus other
efficiencies working to drive unit costs down. Marginal cost may now be below the $3.75 to $4.25
estimated range of recent years.
The Marcellus is now producing in excess of 10 billion cubic feet per day. Well performance continues to
improve, but infrastructure bottlenecks remain. New supply will continue to come on aggressively as those
bottlenecks are relieved since the Marcellus is one of the most economic plays in the U.S.
With the ability to displace imports into the northeast nearing an end as Marcellus production reaches the
level of Northeastern demand, Marcellus production must seek export outlets for further growth. This will
be further exacerbated as the Utica and Huron plays are developed.
Tight oil plays continue to add significant low cost gas production. With oil prices continuing to far exceed
gas prices on a Btu basis, this production will remain base-load production.
Liquids-rich plays continue to outperform, despite low ethane prices.
Producers are continuing to high-grade their drilling efforts, moving to the sweet spots as drilling to hold
acreage fades.
We have considered the environment in our production of materials for this event.

2. Notes:
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