Friday, March 27, 2015

U.S. Rig Count: -21 to 1,048

The Baker Hughes U.S. rig count is down 21 rigs this week to 1,048.  Oil rigs were down 12 to 813, gas rigs were down nine to 233 and miscellaneous rigs were unchanged at two.  The gas rig count is the lowest that Baker Hughes has ever reported since the inception of its rig count in July 1987.


By type, horizontal rigs were down 17 to 812, vertical rigs were down four to 144 and directional rigs were unchanged at 92.  Among gas rigs, horizontal rigs were down four to 187, directional rigs were down two to 36 and vertical rigs were down three to ten.

Thursday, March 26, 2015

Clearing a Four Month Backlog of Texas Completions...

11/20/14 - 3/25/15:
  • Batts GU #1H, Classic Operating: .215 MMcf/day IP, -/64" choke, 117 psi; Perfs: 10,500-15,175, length: 4,675 ft.; Carthage Field (Haynesville Shale), Shelby Co., Survey: SMITH, J, A-637 
  • Crenshaw SU #1H, Exco Operating: 10.033 MMcf/day IP, 18/64" choke, 7,042 psi; Perfs: 13,032-19,645, length: 6,613 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: BURGES, TJ, A-71 

Two New Louisiana Completions

  • Teal 3 #1-ALT, EXCO Operating: 7.808 MMcf/day IP on 14/64 in. choke at 8,742 psi; Perfs: 12,629-16,892, length: 4,263 ft.; Holly Field, DeSoto Parish, S10/T13/R13; res. A, serial #247754 
  • Rinaudo 3 #1-ALT, EXCO Operating: 8.588 MMcf/day IP on 15/64 in. choke at 8,902 psi; Perfs: 12,416-16,652, length: 4,236 ft.; Holly Field, DeSoto Parish, S3/T13/R13; res. A, serial #247756

2014 Natural Gas Flows

One of my favorite EIA graphics is the annual energy flow for each of the major energy categories:  total energy, petroleum, natural gas, coal, and electricity.  Obviously, I'm particularly interested in natural gas.  What I like about it is that it shows how gas is consumed across a variety of user groups.  What it also shows is that once LNG export facilities start to come on line, the exports category (highlighted in yellow below) will grow from a stream to a river, further enhancing the diversity of consumers.


Just be glad you don't have a flow that looks like coal's:

Gas in Storage Makes the Turn: +12 Bcf to 1.479 Tcf

The EIA reported this morning that working gas in storage was up 12 Bcf to 1.479 Tcf.  The withdrawal was net 68 Bcf greater than last year (-56 Bcf) and net 31 Bcf above the five year average (-19 Bcf).  This is the first net injection of the year and the upward turn is about a week earlier than average in terms of timing for the past seven years we've been tracking it here on haynesvilleplay.com.


The current storage level is now 63.6% higher than last year (904 Bcf, a difference of 575 Bcf) but 11.6% below the five year average (1.692 Tcf, a difference of 194 Bcf).  FYI, last year, storage report bottomed out at 822 Bcf in the first week of April.

Tuesday, March 24, 2015

Three Weeks of Louisiana Completions

  • Bradway 25+24-15-12 HC #1-ALT, Chesapeake Operating: 14.173 MMcf/day IP on 22/64 in. choke at 6,590 psi; Perfs: 12,296-17,625, length: 5,329 ft.; Caspiana Field, Caddo Parish, S24/T15/R12; res. B, serial #247650 
  • Bradway 30+19-15-11 HC #1-ALT, Chesapeake Operating: 15.262 MMcf/day IP on 22/64 in. choke at 7,115 psi; Perfs: 12,510-17,760, length: 5,250 ft.; Caspiana Field, Caddo Parish, S24/T15/R12; res. B, serial #247830 

Haynesville Shale Rig Count: +1 to 23

The Haynesville Shale rig count was up one last week to 23.  Louisiana was up one (Anadarko) to 14, while Texas held at nine.


Comstock to Reduce 2015 Haynesville Capex

Comstock Resources announced yesterday that it will reduce its capital expenditures in this low commodity price environment.  Total capex will drop 22% to $248 million.  Haynesville capital spending will drop from $165 million to $95 million, and the company will drop one of its rigs (with an early termination fee of $2.4 million).  Because Comstock has had some success with its recent recompletion of the Pace 33 well, the logic follows that it is a more efficient use of capital to slide down the risk/reward continuum to stimulate old existing wells to get incremental gas than it is to drill new wells.  It only plans to drill nine Haynesville wells in 2015, down from 14 and recomplete 23 wells, up from 17.

Here is what Comstock had to say about its refracking program:

Chesapeake to Cut Back Until Prices Pick Up

Chesapeake Energy announced yesterday that it will cut its 2015 capital budget by $500 million to $3.5 to $4.0 billion and reduce its average 2015 rig count from 35 to 45 down to 25 to 35.  The Haynesville average rig count will drop from seven to eight down to five to six with the expectation that the year end count will be between two and four.


Looking at the chart above from a presentation given today, if the current oil and gas price environment continues, Chesapeake will end the year with between nine and 19 rigs.  Take a moment to think about that.  CHK's total rig count could be below ten in nine months?  This is a level of rationality that we've never seen from Chesapeake.  With former CEO Aubrey McClendon, we would have been hearing about complex financial deals to sell VPPs, JVs in the next big play and asset sales to push through these low prices.  Now we are hearing about patience and prudent deployment of capital.  Come to think about it, "patience" is a word I never would have associated with the old Chesapeake.

Friday, March 20, 2015

U.S. Rig Count: -56 to 1,069

The Baker Hughes  U.S. rig count was down 56 rigs this week to 1,069.  Oil rigs were down 41 to 825, gas rigs were down 15 to 242 and miscellaneous rigs were unchanged at two.  While everyone is looking at oil rigs, keep in mind that 242 rigs ties 1992 as the lowest natural gas rig count in the BHI records, which (publicly, at least) date back to 1987.


Thursday, March 19, 2015

EIA: Gas in Storage -45 Bcf to 1.467 Tcf

The EIA announced this morning that working gas in storage was down 45 Bcf to 1.467 Tcf.  The weekly withdrawal was 35% lower than last year (-69 Bcf) but exactly the same as the five year average.  The current storage level is now 52.8% higher than last year (960 Bcf, a difference of 507 Bcf) but 13.3% below the five year average (1.692 Tcf, a difference of 225 Bcf).


Wednesday, March 18, 2015

Haynesville Shale Rig Count: Unchanged at 22

The Haynesville Shale rig count was unchanged last week at 22.  Louisiana was up one (Chesapeake) to 13, while Texas was down one (Anadarko) to nine.  It's starting to look like old times on the Louisiana side of the Haynesville, with Chesapeake running four times more rigs than the next largest driller.  Of course, the numbers are smaller by an order of magnitude compared to five years ago, though.


Tuesday, March 17, 2015

Vultures Circling Sabine

Sabine Oil and Gas, the newly created entity from the merger of Sabine Oil and Gas and Forest Oil, announced in a tersely worded statement yesterday that it is not going to file its requisite SEC quarter/year end forms and has hired an investment bank and law firm to help it assess its "strategic alternatives."  Ideally, that means seeking new financing for the company.  In reality, it means hunting for a white knight to save it from having to declare bankruptcy.

Each independent E&P has devised its own strategy to survive low gas prices and, for most, an ill-timed rush to oil and liquids.  All are cutting costs and limiting drilling and completions.  Some are selling assets.  Some are able to restructure their debt to push back maturities (i.e. SM Energy), others have to sell some expensive debt to replace cheaper debt that is maturing soon (i.e. Goodrich).  Others are selling equity to pay off debt (i.e. Encana and Goodrich), telling their shareholders it's going to save them on interest payments while not mentioning the dilution in equity value.  The least fortunate are looking for a savior or a sucker.  Investors with dry powder are licking their lips hoping to snap up some good assets on the cheap.

These days, there are many vultures in the skies above Houston.  But Sabine, ask not for whom the vultures circle, they circle for thee.

Friday, March 13, 2015

U.S. Rig Count: -67 to 1,125

The Baker Hughes U.S. rig count was down another 67 rigs this week to 1,125.  Oil rigs were down 56 to 866, gas rigs were down 11 to 257 and miscellaneous rigs were unchanged at two.   The gas rig count is now only 15 rigs away from the lowest recorded BHI gas rig count of 242 in 1992.


By type, horizontal rigs were down 46 to 849, vertical rigs were down 11 to 166 and directional rigs were down ten to 110.   Among gas rigs, horizontal rigs were down eight to 190, directional rigs were down three to 44 and vertical rigs were unchanged at 23.

Thursday, March 12, 2015

EIA: Gas in Storage -198 Bcf to 1.512 Tcf

The EIA announced this morning that working gas in storage was down 198 Bcf to 1.512 Tcf. The weekly withdrawal was 5% above last year (-189 Bcf) but 71% greater than the five year average (-116 Bcf).  The current storage level is now 46.9% above last year (1.029 Tcf, a difference of 483 Bcf) but 13.0% below the five year average (1.737 Tcf, a difference of 225 Bcf).


Monday, March 9, 2015

Haynesville Shale Rig Count: -1 to 22

Last week's Haynesville Shale rig count was down one to 22.  Louisiana was unchanged at 12, but J-W added one and BHP was down one.  Texas was down one (XTO) to ten.



New Texas Permits

2/24/14 - 3/8/15:
  • CGU 21-22-26 #72HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co., Survey: O'BANON, G, A-519 
  • Greer-Ironosa Alloc #1HB, Exco Operating; Carthage Field (Haynesville Shale), San Augustine Co., Survey: WARD, M, A-305 
  • Bruce SU #1HB, Exco Operating; Carthage Field (Haynesville Shale), San Augustine Co., Survey: HODGES, WR, A-435 
  • Davis-Holoway Alloc #1H, Exco Operating; Carthage Field (Haynesville Shale), San Augustine Co., Survey: DAVIS, AM, A-99

Friday, March 6, 2015

U.S. Rig Count: -75 to 1,192

Another week, another blistering drop in rig count.  Baker Hughes reported today that U.S. working rigs were down 75 to 1,192.  Oil rigs were down 64 to 922, gas rigs were down 12 to 268 and miscellaneous rig were up one to two.  By type, horizontal rigs were down 51 to 895, vertical rigs were down 17 to 177 and directional rigs were down seven to 120.  Among gas rigs, horizontal rigs were down 12 to 198, directional rigs were up three to 47 and vertical rigs were down three to 23.


This is the 13th straight week of dropping oil rigs, down a total of 653 over that period.  Overshadowed by the oil news, gas rigs are down to their lowest level in nearly 23 years.  The bottoming out came in mid-1992 (in March and again in June) at 242 rigs.

Thursday, March 5, 2015

EIA: Gas in Storage -228 Bcf to 1.71 Tcf

The EIA announced this morning that working gas in storage was down 228 Bcf to 1.71 Tcf.  The weekly withdrawal was 58% larger than last year (-144 Bcf) and 98% greater than the five year average (-115 Bcf).  The current storage level is now 40.4% above last year (1.218 Tcf, a difference of 492 Bcf) and 7.7% below the five year average (1.853 Tcf, a difference of 143 Bcf).


Tuesday, March 3, 2015

Haynesville Rig Count: -1 to 23

The Haynesville Shale rig count was down one last week to 23.  Louisiana was down one rig to 12 (BHP Billiton/Petrohawk dropped a rig, which was picked up by another producer and moved to Lincoln Parish) and Texas was unchanged at 11.


Friday, February 27, 2015

U.S. Rig Count: -43 to 1,267; Gas Rig Count Lowest since May 1993

The Baker Hughes U.S. rig count was down 43 this week to 1,267.  Oil rigs were down 33 to 986, gas rigs were down nine to 280 and miscellaneous rigs were down one to one.  By type, horizontal rigs were down 33 to 946, vertical rigs were down nine to 194 and directional rigs were down one to 127.  Among gas rigs, horizontal rigs were down four to 210, directional rigs were unchanged at 44 and vertical rigs were down five to 26.


While everyone is focused on the plunge in oil rigs (down 589 rigs, or 37.4% over the past 12 weeks), nobody is paying attention to the fact that the gas rig count is at its lowest point since May 7, 1993, almost 22 years ago.  A kid could have been born, educated and graduated from college in that time span.

Thursday, February 26, 2015

EIA: Gas in Storage -219 Bcf to 1.938 Tcf

The EIA reported this morning that working gas in storage was down 219 Bcf to 1.938 Tcf.  The weekly withdrawal was 87% greater than last year (-117 Bcf) and 67% higher than the five year average (-131 Bcf).  The current storage level is now 42.3% above last year (1.362 Tcf, a difference of 576 Bcf) and 1.5% below the five year average (1.968 Tcf, a difference of 30 Bcf).


With the big withdrawal this week, the deviation is back below zero...for now:

Wednesday, February 25, 2015

Chesapeake Reports Year End Results

Chesapeake Energy reported its year end results today.  You can read all about it here (press release, presentation), but I'll cherry-pick the relevant Haynesville stuff.  I guess the biggest item of note is that CHK is actually talking about the Haynesville again.  They were so intent on following the herd into liquids that the Haynesville has barely warranted a mention in recent investor materials.  In recent months, we've seen greater attention paid to the Haynesville by several companies (i.e. Comstock) that have realized that enhanced drilling and producing techniques allow them to yield pretty decent economics on Haynesville wells.  I'm not a bitter man, so I'll try not to dwell on this or say, "I told you so."

EXCO Reports Year End

EXCO Resources reported its year end results today (see page 7 for Haynesville highlights). We've already reported on most of the highlights, including 2015 capital plans, but I wanted to note a couple more things:

  • EXCO is the first company in a while to talk about the Mid-Bossier Shale, the shale layer above the Haynesville.  The company drilled Mid-Bossier test wells in Louisiana (1) and Texas (3) and says it is pleased with results.  I'm behind in reporting TX and LA completions, but I'll make sure to note the Mid-Bossier completions when I pick them up.  

Tuesday, February 24, 2015

Haynesville Shale Rig Count: +1 to 24

Over the past two weeks (sorry, I missed a week with the Mardi Gras holiday), the Haynesville Shale rig count was up one to 24.  As promised, EXCO moved its last two rigs from Louisiana to Texas to give it three there.  For the past two weeks, Louisiana was down those two rigs to 13, while Texas was up three to 11 (the two from EXCO and another from Anadarko).  Last week marks the highest Texas rig count since Feb 7, 2014.