HOUSTON/NEW YORK, Aug 7 (Reuters) -

Major U.S. natural gas producers are preparing to further

curtail production in the second half of 2024, after prices sank

nearly 40% over the past two months.

Henry Hub gas futures have dropped to around $2 per million

British thermal units (mmBtu), while in West Texas, Waha prices

have turned negative a record number of times so far in 2024.

Prices fell as demand softened following cooler than expected

temperatures. Supplies had expanded meanwhile, as some producers

lifted production during the second quarter after prices climbed

some 47% in April and May.

EQT, one of the top gas producers in the U.S.,

has embedded around 90 billion cubic feet equivalent of

strategic curtailments this fall, which the company will carry

out if the market remains depressed, CFO Jeremy Knop said during

the company's second quarter earnings call.

Houston, Texas-based Apache is also set to curtail,

a further 90 million cubic feet per day (mmcfd) of gas in the

third quarter, its CFO, Stephen J. Riney told analysts in an

investors call last week.

Apache curtailed 78 mmcfd of gas production in the second

quarter, in response to pricing extremes in the Permian Basin,

the company said in its Q2 earnings report.

Chesapeake Energy ( CHK ), which will be the largest

U.S. gas producer after it completes its merger with

Southwestern Energy ( SWN ), plans to defer some well completions while

the gas market is weak, biding its time until supply and demand

imbalances correct, the company said last month in its second

quarter earnings report.

Rivals Antero Resources Corp ( AR ) and EGO Resources

are opting to do the same, they said in earnings

reports.

Chesapeake's move to defer well completions makes sense

as it can hold out for an expected rise in LNG demand to

properly kick in and buoy prices, Robert Wilson, vice president

of analytics at East Daley told Reuters.

Meanwhile, shale producer Coterra Energy ( CTRA ) had

reversed some curtailments at the end of the second quarter, but

is bracing for more reductions.

"We are prepared to make further cuts as some of our summer

sales commitments roll off in the shoulder season," said Blake

Sirgo, senior vice president of operations for Coterra in the

company's Q2 earnings.

U.S. natural gas output

will average around 103.3 bcfd

this year, the Energy Information Administration (EIA) said

in its August edition of the short-term energy outlook report.

That compares with 103.8 bcfd produced last year, and is

a slight downgrade from a forecast of 103.5 bcfd in the July

edition of the report.