U.S. gas production will turn the corner in the near future, changing from reduced growth to an actual decrease in total production in the near future, say Societe General analysts John Herrlin and Russel Koch in a new report.

US Gas prodution

US natural gas output

It’s still early and not all major players in the U.S. gas market have reported Q2 earnings, but Herrlin and Koch estimate that U.S. natural gas output is up 3 percent sequentially and 11 percent year-on-year. The problem is that Baker Hughes and Halliburton have both reported that rig counts are down both year on year and sequentially.

Halliburton explained in its Q2 earnings report call that, “In spite of relatively flat sequentially U.S. rig count, drilling efficiencies in the trend towards multiwell pads are driving more robust well count. Additionally, in some cases, we’re seeing operators increasing the number of stages on horizontal wells performing as many as 40 stages per lateral in the Marcellus.”

Increased efficiency will keep the industry growing in the short term, but that doesn’t change the overall trend.

“We still expect 2Q13 to be the start of a meaningful U.S. natural gas output decline for the companies we track,” write Herrlin and Koch. “We expect the collective decline could range between 1 percent and 2 percent… However, the 2Q decline may not be severe given increased production in the Marcellus and ongoing infrastructure debottlenecking that has helped to increase throughput.”

DoJ starts antitrust probe into Halliburton’s Marcellus operation

Fracking in the Marcellus shale region has drawn heavy criticism from environmentalists, but now the Department of Justice has taken an interest in business operations. There haven’t been any accusations of wrongdoing, but Halliburton and Baker Hughes have both confirmed that the DoJ has requested documents related to an antitrust investigation.

“The Antitrust Division is investigating the possibility of anti competitive practices involving pressure pumping services performed on oil and gas wells,” said DoJ antitrust spokeswoman Gina Talamona, Bloomberg reports.

There aren’t many more details available yet, but the probe has surprised industry watchers who say that cut-throat competition is the main culprit behind falling profits. “The market is way oversupplied,” said Capital One analyst Luke Lemoine. “It’s crazy to think that any of these guys would collude because they all—I don’t want to say hate each other—but they’re true competitors.”