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Haynesville's Top 2022 Players That Made It Happen
01/05/2023
After reaching record-high production in 2021, the Haynesville Shale seemed to have a quiet 2022, with a smattering of deal activity and attention seemingly focused more on LNG exports than production. Meanwhile, the indications are that the third-largest producing gas shale in the U.S. is growing up for a robust 2023 if commodity prices stand still.
The Haynesville Shale play, situated in northwestern Louisiana and eastern Texas, was remarked in March 2008. Petrohawk Energy Corp. and Chesapeake Energy Corp. both held lease acreages in Louisiana, making the region famous.
There was a 54% growth in Haynesville rig activity from the 46 average count in 2021 to 71 in the first half of 2022, according to J.P. Morgan’s September “JPM Natural Gas Reservoir” report.
Recent gas pipeline scrapes are running ahead of anticipations, setting record highs of almost 99.3 Bcf/d in September, with MTD gas production estimated at 98.7 Bcf/d, which compares to the August average of 97.7 Bcf/d and the September 2021 average of 92.7 Bcf/d.
Top basin performers Chesapeake Energy, Southwestern Energy, Comstock Resources, Aethon Energy, and Rockcliff Energy II produced a combined total of 1.53 MMboe/d, 83 bbl/d of oil, and 9.2 Bcf/d of gas in the first half of 2022.
One of the first companies to operate in the basin, Chesapeake was the Haynesville’s largest producer in the first half. The company produced 1.23 MMboe/d in the half, 365,766 boe/d came from its Haynesville operations, with 2.19 Bcf/d of the 6.98 Bcf/d total produced coming from the Haynesville as well.
Nevertheless, it produced 89,862 bbl/d of oil in the first half of the year, and none of Chesapeake’s oil production came from the Haynesville. The latter half of the year was aimed at concentrating on Chesapeake’s midstream capacity, committing 700 MMcf/d to a new pipeline to be constructed by momentum from the heart of the Haynesville play down to Gilles.
The company reported 334,716 boe/d in the first half of 2022 production from the Haynesville, comparable to the total 887,668 boe/d produced by the company across all its assets. In the basin, it also produced 2 Bcf/d of its total reported 5.19 Bcf/d across the combined Haynesville and Appalachian assets.
Comstock has assets spanning northern Louisiana and eastern Texas, making it the third most productive Haynesville operator with eight total rigs. The company produced a total of 314,483 boe/d, 28 bbl/d of oil, and 1.88Bcf/d of gas in the Haynesville in the first half of 2022.
As the largest private producer in the Haynesville, Aethon produced 313,492 boe/d of its total 330,601 boe/d from the basin. Moreover, 19 bbl/d of its total 402 bbl/d of oil production and 1.88Bcf/d of its total 1.98Bcf/d of natural gas production came from the Haynesville.
The second private company to emerge as a Haynesville top player, Rockcliff production totaled 205,997 boe/d in the Haynesville in the first half of the year. 36 bbl/d of its 347 bbl/d total oil production in the half came from the East Texas basin, as did 1.24 Bcf/d of its 1. 32 Bcf/d total natural gas production.
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The Haynesville oil and gas basin and its importance
The Haynesville oil and gas basin is a significant shale gas-producing region located primarily in northwest Louisiana and eastern Texas in the United Statesб with some estimates suggesting it could contain up to 500 trillion cubic feet of recoverable natural gas.
Haynesville Shale's 2022-2023 Performance Overview, What Happened, Trends
The Haynesville Shale play, located in northwestern Louisiana and eastern Texas, was recognized in March 2008. Petrohawk Energy Corp. and Chesapeake Energy Corp. had leased acreages in Louisiana, bringing fame to the region. The Haynesville Shale is crucial for meeting the rising demand for LNG exports from the Gulf Coast because of its location. It's expected that Haynesville will contribute about 13 Bcf/d to the overall growth in U.S. gas demand by 2030. However, drilling in Haynesville is more expensive and challenging due to the depth of its wells, especially when compared to areas like the Marcellus Shale.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.