Thursday, April 17, 2014

U.S. Rig Count Unchanged at 1,831; Gas Rigs +6

The Baker Hughes U.S. rig count was unchanged this week at 1,831.  Oil rigs were down seven to 1,510, gas rigs were up six to 316 and miscellaneous rigs were up one to five.  By type, there were no changes (?!?) with horizontal rigs holding at 1,224, vertical rigs at 391 and directional rigs at 216.  Among gas rigs, horizontal rigs were up two to 233, directional rigs were up two to 54 and vertical rigs were up two to 29.


And yes, I am behind on my Haynesville rig counts.  The kids are out this week for spring break so I haven't had time to deal with it.  I'll do two weeks together by the start of next week.

EIA: Storage +24 Bcf to 850 Bcf

EIA working gas in storage was up 24 Bcf last week to 850 Bcf.  The weekly injection was inline with last year (+25 Bcf) and 35% below the five year average (+37 Bcf).  The current storage level is 50.0% below last year (1.7 Tcf) and 54.3% below the five year average (1.823 Tcf).  The current storage level is now 1.01 Tcf below the five year average.


Friday, April 11, 2014

"Cautious Optimism" - Haynesville Shale Word of the Year?

With the natural gas storage withdrawal season now behind us, it is time to reflect on where we are headed in the Haynesville Shale.  Bottom line:  I am cautiously optimistic for 2014.

Back in 2012, we kept hearing analysts say, "wait until 2014" for prices to go back to $4.00 - $4.50/MMcf for natural gas.  Guess what, here we are in 2014 and prices are in the $4.50 range, which many people cite as the magic number to get producers interested in the Haynesville again.  Of course, these prices are driven by a very cold winter throughout most of the country and a record storage withdrawal of 3 Tcf of gas in four and a half months, so it is a worthy question if this is a fundamental change in prices or a reaction to a temporary situation.  But the fact is that now it's mid-April and we have about seven months to replenish approximately 2.6 Tcf to get storage back to a minimum level of 3.4 Tcf.  Doable, but you never know if there will be a hot summer or an unexpected natural event.  In any case, there will need to be strong gas production.

A Tale of Two Hydrocarbons: Gas Rigs Down to 310; Oil Rigs at Record High

The Baker Hughes U.S. rig count was up 13 to 1,831.  Oil rigs were up 19 to 1,517, gas rigs were down six to 310 and miscellaneous rigs held at four.  This is first time oil rigs have broken the 1,500 barrier, and it is the highest level ever recorded on the BHI records (beginning 1987).  By contrast, the gas rig count hasn't been this low since May 21, 1993.

By type, horizontal rigs are unchanged at 1,224, vertical rigs are down two to 391 and directional rigs are up 15 to 216.  Among gas rigs, horizontal rigs were down five to 231, directional rigs were up three to 52 and vertical rigs were down four to 27.

Thursday, April 10, 2014

EIA: Gas in Storage +4 Bcf to 826 Bcf

The EIA reported that working gas in storage was up 4 Bcf last week to 826 Bcf.  This is the first net injection since mid-November and, if it holds, marks the end of the winter withdrawal season.  This week last year saw a 25 Bcf withdrawal, but the current injection was largely in line with the five year average, which was up 9 Bcf.  The current storage level is 50.7% below last year (1.675 Tcf) and 54.7% below the five year average (1.823 Tcf).


Tuesday, April 8, 2014

A Bunch of New Texas Completions

3/24/14 - 4/8/14:
Three Observations:
  1. Some moldy oldies at the top of the list from Sabine O&G.  These two Dinkle wells were originally permitted in late 2010 and drilled in early 2011.   They seem to be going through some old inventory in Harrison Co.  Sabine completed two older Harrison wells in October and August 2013.  The last non-Sabine well to be completed in Harrison was completed in March 2013.
  2. There were several wells with lots of liquids (>100 Bbl/day)
  3. EOG is getting in on the liquids action.  Both of their completions reported liquids, including one >100 Bbl/day.
Completions:
  • Dinkle Deep GU #1H, Sabine Oil & Gas: 9.447 MMcf/day IP, 0 Bbl/day liquids, 20/64" choke, 6,255 psi; Perfs: 11,512-15,867, length: 4,355 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: BRITAIN, JW, A-78 

Haynesville Shale Rig Count: -2 to 25

The Haynesville Shale rig count was down two rigs last week to 25.  Louisiana was down two (both Chesapeake) to 17, while Texas held at eight.


Recent Texas Permits

3/24/14 - 4/7/14:
  • New Horizons #6H, XTO Energy; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: ENGLISH, W, A-189 
  • CGU 21-22-26 #71HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: LIDDY, W, A-398 
  • BSI/USFS Unit F11 #1H, XTO Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: WILLIAM COLWELL, A-8

Friday, April 4, 2014

Gas Rig Count: -2 to 316; How Low Can it Go?

The Baker Hughes overall U.S. rig count was up nine rigs this week to 1,818.  Oil rigs were up 11 to 1,498, gas rigs were down two to 316 and miscellaneous rigs were unchanged at four.  By type, horizontal rigs were up 13 to 1,224 (the highest level ever), vertical rigs were up nine to 393 and directional rigs were down 13 to 201.  Among gas rigs, horizontal rigs were unchanged at 236, directional rigs were down two to 49 and vertical rigs were unchanged at 31.

Thursday, April 3, 2014

EIA: Gas in Storage -74 Bcf to 822 Bcf

The EIA reported this morning that working gas in storage was down 74 Bcf last week to 822 Bcf.  The weekly withdrawal was actually 22% lower than last year (-95 Bcf) but nine times greater than the five year average (-8 Bcf).  The current storage level is 51.6% below last year (1.7 Tcf) and 54.7% below the five year average (1.814 Tcf).


Wednesday, April 2, 2014

Last Week's Louisiana Completions

  • Red Oak Timber 6 #4-ALT, EXCO Operating: 11.595 MMcf/day IP on 18/64 in. choke at 7,633 psi; Perfs: 12,046-16,072, length: 4,026 ft.; Bethany Longstreet Field, Caddo Parish, S6/T14/R15; res. A, serial #247148 
  • Red Oak Timber 7 #3-ALT, EXCO Operating: 9.614 MMcf/day IP on 16/64 in. choke at 6,823 psi; Perfs: 12,410-16,905, length: 4,495 ft.; Bethany Longstreet Field, Caddo Parish, S6/T14/R15; res. A, serial #247149 

Monday, March 31, 2014

Haynesville Shale Rig Count: +2 to 27

The Haynesville Shale rig count was up two last week to 27.  Louisiana was up two to 19, while Texas held at eight.  Both new rigs were from Chesapeake, but they were rigs that dropped off the count for a week while changing locations.


Friday, March 28, 2014

U.S. Gas Rigs Down 8 to 318

The Baker Hughes U.S. rig count was up six this week to 1,809. Oil rigs were up 14 to 1,487, gas rigs were down eight to 318 and miscellaneous rigs were unchanged at four. This is the lowest number of operating gas rigs since May 1993, when natural gas was trading a little above $2/MMcf on a good day. By type, horizontal rigs were up five to 1,211, directional rigs were up one to 214 and vertical rigs held at 384. Among gas rigs, horizontal rigs were down seven to 236, directoinal rigs were up one to 51 and vertical rigs were down two to 31.

Thursday, March 27, 2014

EIA: Storage -57 Bcf to 896 Bcf

The EIA reported that working gas in storage was down 57 Bcf to 896 Bcf last week.  The withdrawal was 37% lower than last year (-90 Bcf) but six times greater than the five year average (-7 Bcf), which is starting to make the turn towards the injection season.  The current storage level is 50.1% below last year (1.795 Tcf) and 50.8% below the five year average (1.822 Tcf).


Temperatures in the Lower 48 last week averaged 43.1 degrees, which was 0.3 degrees warmer than last year and 1.7 degrees cooler than average.

Monday, March 24, 2014

New Texas Completions

  • CGU 23 #51HH, Anadarko E&P: 2.88 MMcf/day IP, 16.2 Bbl/day liquids, ?/64" choke, 2,415 psi; Perfs: 10,881-14,991, length: 4,110 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: SAMFORD, A, A-632 
  • CGU 13 #54HH, Anadarko E&P: 5.849 MMcf/day IP, 84.0 Bbl/day liquids, 20/64" choke, 415 psi; Perfs: 10,889-16,450, length: 5,561 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: HUGHES, HRS J, A-278 

Recent Louisiana Completions

  • Sample Et Al. 9 H #4-ALT, Petrohawk Operating: 8.457 MMcf/day IP on 15/64 in. choke at 2,149 psi; Perfs: 12,473-17,039, length: 4,566 ft.; Thorn Lake Field, Red River Parish, S9/T14/R11; res. A, serial #244844 
  • Sample Et Al. 4 H #7, Petrohawk Operating: 8.5 MMcf/day IP on 15/64 in. choke at 2,310 psi; Perfs: 12,710-17,240, length: 4,530 ft.; Thorn Lake Field, Red River Parish, S9/T14/R11; res. A, serial #244867 
  • Nabors 6 #4-ALT, EXCO Operating: 9.812 MMcf/day IP on 16/64 in. choke at ? psi; Perfs: 12,797-17,114, length: 4,317 ft.; Caspiana Field, DeSoto Parish, S6/T13/R12; res. A, serial #246642

Hot off the Press: DOE Approves Jordan Cove LNG Export

The Department of Energy announced this morning that it has approved the LNG Export facility at Jordan Cove in Coos Bay, OR for long-term contracts with non-free trade countries.  This ruling gives the owners the necessary approval to be able to finance and build the export facility.

The DOE approved export of 0.8 Bcf/day, as requested in the application.  The project is owned and developed by Calgary-based Veresen.

Haynesville Shale Rig Count: -2 to 25

The Haynesville Shale rig count was down two last week to 25.  Louisiana was down two to 17 (both Chesapeake in DeSoto), while Texas held at eight.


Recent Texas Permits

2/27/2014 - 3/23/2014:
  • Duke Rudman Gas Unit #Q 1H, XTO Energy; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: MARTIN, EL, A-898 
  • CGU 01-03 #73HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: HUGHES, HRS J, A-278 

Friday, March 21, 2014

U.S. Gas Rigs: -18 to 326, Lowest Since 1995

The Baker Hughes U.S. rig count was down six this week to 1,803.  Oil rigs were up 12 to 1,473, gas rigs were down 18 (!) to 326 and miscellaneous rigs held at four.  This is the lowest gas rig count since 5/5/1995, an interesting phenomenon given the current price of gas and the national storage deficit (at least vis-a-vis recent historical averages).  By type, horizontal rigs were down six to 1,206, vertical rigs were down nine to 384 and directional rigs were up nine to 213.  Among gas rigs, horizontal rigs were down 16 to 243, directional rigs were down two to 50 and vertical rigs were unchanged at 33.

Thursday, March 20, 2014

EIA: Storage -48 Bcf to 953 Bcf

I never thought I'd ever use Bcfs instead of Tcfs to quantify working gas in storage, but it just goes to show that you never know... The EIA reported today that working gas in storage last week dropped 48 Bcf to 953 Bcf. The withdrawal was 35% below last year (-74 Bcf) but 60% greater than the five year average (-30 Bcf).  The current storage level is 49.4% below last year (1.885 Tcf, a difference of 932 Bcf) and 47.9% below the five year average (1.829 Tcf, a difference of 876 Bcf).


Monday, March 17, 2014

Haynesville Rig Count: +1 to 27

The Haynesville Shale rig count was up one to 27 last week.  Louisiana was up one (Chesapeake, which is now running eight rigs) to 19, while Texas held at eight.  The Louisiana rig count is now the highest it has been since June 22, 2012 towards the end of the Great Rig Count Free Fall of 2012.


Chesapeake Files Preliminary Papers for Spin-Off of Oilfield Services Division

This morning, Chesapeake Energy filed a form 10-12SB with the SEC to register the shares of its wholly owned oilfield services company as a public entity as a first step in spinning it off.  This is a preliminary step and not a done deal (press releaseForm 10-12SB in PDF).

The new company will be called Seventy Seven Energy (no, I don't know why) and will include the handful of oilfield service companies Chesapeake accumulated back in the aughts back when vertical integration in the oilfield was in vogue. Vertical integration is a cyclical business strategy that works much better when commodity prices are high and business is strong.  If the energy market continues to improve, look for investment bankers to start badgering E&P companies buy suppliers again in a few years.

Friday, March 14, 2014

U.S. Rig Count: +17 to 1,809; Gas Rigs +1 to 344

The Baker Hughes U.S. rig count was up 17 rigs this week to 1,809.  Oil rigs were up 18 to 1,461, gas rigs were down one to 344 and miscellaneous rigs were unchanged at four.  The overall U.S. rig count hasn't been this high since November 2012.  At that time, the gas rig count was 424, while it's 344 today (-80 rigs, or -19%), showing the overall decline in gas rig count as a percentage of the whole over the past year and a quarter.

By type, horizontal rigs were up 10 to 1,212, vertical rigs were up one to 393 and directional rigs were up six to 204.  Among gas rigs, horizontal rigs were up two to 259, directional rigs were down two to 52 and vertical rigs were up one to 33.

Thursday, March 13, 2014

EIA: Storage -195 Bcf to 1.001 Tcf

The EIA reported this morning that working gas in storage decreased by 195 Bcf to 1.001 Tcf last week.  The weekly withdrawal was 34% greater than last year (-145 Bcf) and double the five year average (-95 Bcf).  Yawwwnnnn!  In any other year, this would be a huge development, but in this year of record withdrawals it seems about right.


The current storage level is now 48.9% below last year (1.959 Tcf, a difference of 958 Bcf) and 46.2% below the five year average (1.859, a difference of 858 Bcf).  Given our experience of the past five years, the chart showing the deviation from the five year average looks positively ridiculous, the mirror image of 2012: