(Reuters) — EQT will curtail nearly 1 billion cubic feet per day (bcfpd) of natural gas production through March, the top U.S. natural gas producer said on Monday, as companies respond to persistently low prices of the commodity.
The company said the reduction is expected to total nearly 30 to 40 bcf of net production during the first quarter.
Natgas prices NGc1 fell to more than a 3-1/2-year low last week, largely on mild winter weather.
"The EQT announcement stands out because the timeline of the cuts is significantly different than others," said Gary Cunningham, director of market research at Tradition Energy.
"That will limit the impact, especially given the current storage surplus, but ~50 bcf of gas not coming into the system over the next several weeks is certainly providing some support and will chase shorts to the sidelines."
Shares of EQT were up 2.7% before the bell, while natural gas prices went up as much as 7.6% in the session.
EQT in its last quarter earnings report lowered 2024 production forecast range by about 50 billion cubic feet equivalent (bcfe) from its earlier projection in mid-January to 2,200-2,300 bcfe.
"We think the company will likely target high cost or low netback areas and avoid disrupting (minimum volume commitment), in order to minimize the cashflow impact," said Bertrand Donnes, energy research analyst at Truist Securities.
Chesapeake Energy — soon to be the biggest U.S. gas producer after its merger with Southwestern Energy — also cut the amount of fuel it plans to produce in 2024 by roughly 30% due to the recent plunge in prices.
Other energy firms Antero Resources and Comstock Resources planned to reduce drilling this year.
U.S. gas drillers have cut the number of gas rigs operating over the past year by 26%, according to energy service firm Baker Hughes BKR.O, with most cuts happening in the Haynesville and the Marcellus/Utica shale regions.