Friday, August 29, 2014

U.S. Rig Count: +18 to 1,914

The Baker Hughes U.S. rig count was up 18 this week to 1,914.  Oil rigs were up 11 to 1,575, gas rigs were up eight to 338 and miscellaneous rigs were down one to one.  By type, horizontal rigs were up nine to 1,330, vertical rigs were up eight to 374 and directional rigs were up one to 210.  Among gas rigs, horizontal rigs were up six to 248, directional rigs were up two to 65 and vertical rigs were unchanged at 25.

Thursday, August 28, 2014

EIA: Gas in Storage +75 Bcf to 2.63 Tcf

The EIA reported that working gas in storage was up 75 Bcf to 2.63 Tcf.  The weekly injection was 15% above last year (+65 Bcf) and 29% greater than the five year average (+58 Bcf).  The current storage level is now 15.7% below last year (3.12 Tcf, a difference of 490 Bcf) and 16.5% below the five year average (3.148 Tcf, a difference of 518 Bcf).


Monday, August 25, 2014

Haynesville Shale Rig Count: +1 to 27

The Haynesville Shale rig count was up one this week to 27.  Louisiana was up one to 20 (J-W), while Texas held at seven.


Friday, August 22, 2014

U.S. Rig Count: -17 to 1,896

The Baker Hughes U.S. rig count was down 17 rigs this week to 1,896.  Oil rigs were down 25 to 1,564, gas rigs were up nine to 330 and miscellaneous rigs were down one to two.  By type, horizontal rigs were down eight to 1,321, vertical rigs were down two to 366 and directional rigs were down seven to 209.  Among gas rigs, horizontal rigs were up seven to 242, directional rigs were up one to 63 and vertical rigs were up one to 25.

Thursday, August 21, 2014

EIA: Gas in Storage +88 Bcf to 2.555 Tcf

The EIA reported that working gas in storage was up 88 Bcf last week to 2.555 Tcf.  The weekly injection was 52% above last year (+58 Bcf) and 83% greater than the five year average (+48 Bcf).  The current storage level is now 16.4% below last year (3.055 Tcf, a difference of 500 Bcf) and 17.3% below the five year average (3.090 Tcf, a difference of 535 Bcf).


As the chart below shows, the 2014 storage deviation from the five year average (red line) continues to be a mirror image of the same data from 2012 (light blue line) when a warm winter badly shocked the storage numbers and crushed natural gas prices.

Monday, August 18, 2014

Haynesville Shale Rig Count: -1 to 26

The Haynesville Shale rig count was down one this week to 26.  Louisiana was down one (J-W Operating) to 19, while Texas held at seven.  And (for those of you with children who can sing the entire soundtrack from the movie "Frozen") for the first time in forever, I have updated the rig map.

Saturday, August 16, 2014

U.S. Rig Count: +5 to 1,913

This week's Baker Hughes U.S. rig count was up five to 1,913.  Oil rigs were up one to 1,589, gas rigs were up five to 321 and miscellaneous rigs were down one to three.  By type, horizontal rigs were up 12 to 1,329, vertical rigs were down ten to 368 and directional rigs were up three to 216.  Among gas rigs, horizontal rigs were up five to 235, directional rigs were up one to 62 and vertical rigs were down one to 24.

Thursday, August 14, 2014

It's Official: Shell is Out of the Haynesville Shale

Blackstone Group, LP announced today that it has acquired Royal Dutch Shell's Haynesville Shale interests for $1.2 billion.  Shell sold its rights to 107,000 net acres prospective for the Haynesville Shale that it owned as a JV partner of Encana.

Blackstone, which is a ginormous investment entity that is best known for its private equity operations, acquired the acreage through its subsidiary Blackstone Energy Partners in partnership with operator Vine Oil and Gas.  Vine is a Dallas-based company that was set up by Blackstone earlier this year with the intent of developing shale assets and is operated by a former Encana executive, Eric Marsh.  Mr. Marsh is likely familiar with the quality of the Haynesville assets from his Encana days.

Look for more deals from this partnership and others.  These are good times for private equity firms and independent operators to sweep up cast-off assets at reasonable prices.  At approximately $11,215 per acre for proven Haynesville acreage, I'd say Blackstone did alright.  As part of its yard sale, Shell also sold off assets in the Wyoming Pinedale to Ultra Petroleum in exchange for $925 million cash and 155,000 acres in the Marcellus and Utica Shales.

Last Week's Haynesville Rig Count Unchanged at 27

The Haynesville Shale rig count was unchanged at 27, but EXCO Resources moved its only Texas rig to Louisiana.  Louisiana now has 20 Haynesville rigs working - its highest level since June 15, 2012, the tail end of the Great Rig Count Crash of 2012 -  and Texas is down to seven.

EIA: Gas in Storage +78 Bcf to 2.467 Tcf

This morning, the EIA announced that working gas in storage was up 78 Bcf to 2.467 Tcf.  The weekly injection was 11% above last year (+70 Bcf) and 73% greater than the five year average (+45 Bcf).  The current storage level is now 17.7% below last year (2.997 Tcf, a difference of 530 Bcf) and 18.9% below the five year average (3.042 Tcf, a difference of 575 Bcf).


Monday, August 11, 2014

U.S. Rig Count: +19 to 1,908

The Baker Hughes U.S. rig count was up 19 last week to 1,908.  Oil rigs were up 15 to 1,558, gas rigs were up three to 316 and miscellaneous rigs were up one to four.  By type, horizontal rigs were up 19 to 1,317, vertical rigs were up five to 378 and directional rigs were down five to 213.  Among gas rigs, horizontal rigs were up one to 230, directional rigs were down five to 61 and vertical rigs were up seven to 25.

Blackstone Looks to Buy Shell's Interest in Haynesville

The Wall Street Journal reported this morning that massive private equity company Blackstone Group LP is in negotiations to buy Shell's Haynesville Shale interests for around $1 billion.  Shell, known as SWEPI, LP in the Haynesville, entered the play as Encana's HV partner in 2007, a rare early entrance to a developing shale play for an energy major.  By my count, Shell has completed 179 Haynesville wells, all in Louisiana (through mid-June), with their first completion in March 2009, but the company hasn't operated a Haynesville rig since April 2014.

This is the first big Haynesville deal in a while (assuming it gets done), but it follows Shell's corporate mandate to shed domestic shale assets and cut back on other domestic investments.  Shell has a long presence in Louisiana, but late last year it cancelled its planned south Louisiana gas-to-liquid plant, which likely would have been fed by Haynesville gas.  This created questions as to whether the company's Haynesville would now be orphaned within the company or sold.

Thursday, August 7, 2014

EIA: Gas in Storage +82 Bcf to 2.389 Tcf

The EIA reported this morning that working gas in storage was up 82 Bcf to 2.389 Tcf. The weekly injection was 9% below last year (+90 Bcf) but 67% greater than the five year average (+49 Bcf). The current storage level is now 18.4% below last year (2.927 Tcf, a difference of 538 Bcf) and 20.3% below the five year average (2.997 Tcf, a difference of 608 Bcf).


Tuesday, August 5, 2014

Haynesville Shale Rig Count: +2 to 27

The Haynesville Shale rig count was up two last week to 27.  Louisiana was up two (Chesapeake and Petrohawk/BHP) to 19, while Texas held at eight.


Friday, August 1, 2014

U.S. Rig Count: +6 to 1,889

The Baker Hughes U.S. rig count was up six this week to 1,889.  Oil rigs were up 11 to 1,573, gas rigs were down five to 313 and miscellaneous rigs were unchanged at three.  By type, horizontal rigs were up five to 1,298, vertical rigs were up 12 to 373 and directional rigs were down 11 to 218. Among gas rigs, horizontal rigs were down three to 228, directional rigs were up two to 66 and vertical rigs were down four to 18.

Thursday, July 31, 2014

EIA: Gas in Storage up 88 Bcf to 2.307 Tcf

The EIA reported this morning that working gas in storage was up 88 Bcf to 2.307 Tcf.  The weekly injection was 54% higher than last year (+57 Bcf) and 91% greater than the five year average (+46 Bcf).  The current storage level is now 18.7% below last year (2.837 Tcf, a difference of 530 Bcf) and  21.7% below the five year average (2.948 Tcf, a difference of 641 Bcf).


Tuesday, July 29, 2014

Haynesville Shale Rig Count: -1 to 25

The Haynesville Shale rig count was down one last week to 25.  Louisiana was down one (Chesapeake and EXCO up one each, Petrohawk down one) to 17 and Texas was unchanged at eight.

Friday, July 25, 2014

U.S. Rig Count: +12 to 1,883

The Baker Hughes U.S. rig count was up twelve this week to 1,883.  Oil rigs were up eight to 1,562, gas rigs were up three to 318 and miscellaneous rigs were up one to three.  By type, horizontal rigs were up five to 1,293, vertical rigs were down five to 361 and directional rigs were up twelve to 229.  Among gas rigs, horizontal rigs were up two to 232, directional rigs held at 64 and vertical rigs were up one to 22.

Thursday, July 24, 2014

EIA: Gas in Storage +90 Bcf to 2.219 Tcf

The EIA reported this morning that working gas in storage was up 90 Bcf to 2.219 Tcf.  The weekly injection was more than double last year (+43 Bcf) and 96% greater than the five year average (+46 Bcf).  The current storage level is now 20.2% below last year (2.78 Tcf, a difference of 561 Bcf) and 23.5% below the five year average (2.902 Tcf, a difference of 683 Bcf).


Tuesday, July 22, 2014

Haynesville Shale Rig Count Unchanged at 26

The Haynesville Shale rig count didn't budge last week, holding at 26.  Louisiana stayed at 18 and Texas held at eight.  Sure, there were some rigs moving around, but net-net, nothing changed.

NatGas Price Keeps Dropping

The Henry Hub spot price of natural gas dropped below the five year average this week for the first time since mid-January, hitting $3.84/MMcf yesterday.


Late summer typically sees gas prices drop, but the continued high injections into storage has probably accelerated this recent swoon.  Storage injections have stayed in the +100 Bcf/week range for several months, but the current level still lags the five year average by 727 Bcf.  While there is little chance that the current level will catch up to the average level before the end of the injection season in November, a warm winter will wipe out the deficit in short order and gas prices will be locked back in the 3's for a good long time.

Friday, July 18, 2014

Slim Haynesville Activity in Texas in Past Couple of Weeks

There were no new Haynesville Shale permits filed in Texas over the past couple of weeks, and only one completion in that same period (7/7 - 7/17):

  • Minutemen DU #1H, XTO Energy: 11.321 MMcf/day IP, 18/64" choke, 7,179 psi; Perfs: 12,580-20,133, length: 7,553 ft.; Carthage Field (Haynesville Shale), Shelby Co., Survey: BOUNDS, TW, A-1186

Only One New Louisiana Completion in Past Two Weeks

  • Hunt Plywood 6 H #2-ALT, Petrohawk Operating: 9.835 MMcf/day IP on 16/64 in. choke at 7,393 psi; Perfs: 12,219-16,718, length: 4,499 ft.; Caspiana Field, DeSoto Parish, S36/T15/R13; res. A, serial #245581 
I missed this one a few weeks ago:
  • Lucky Family 17-20 HC #2-ALT, Encana Corp.: 23.089 MMcf/day IP on 27/64 in. choke at 7,192 psi; Perfs: 11,137-18,334, length: 7,197 ft.; Sligo Field, Bossier Parish, S17/T17/R12; res. D, serial #246971

U.S. Rig Count: -4 to 1,871

The Baker Hughes U.S. rig count was down four this week to 1,871.


Oil rigs were down nine to 1,554, gas rigs were up four to 315 and miscellaneous rigs were up one to two.  By type, horizontal rigs were up 12 to 1,288, vertical rigs were down 11 to 366 and directional rigs were down five to 217.  Among gas rigs, horizontal rigs were unchanged at 230, directional rigs were unchanged at 64 and vertical rigs were up four to 21.

Thursday, July 17, 2014

EIA: Gas in Storage +107 Bcf to 2.129

Another week, another big storage increase.  The EIA reported this morning that working gas in storage was up 107 Bcf to 2.129 Tcf.  The weekly injection was 73% greater than last year (+62 Bcf) and 65% above the five year average (+65 Bcf).


The current storage level is now 22.2% below last year (2.737 Tcf, a difference of 608 Bcf) and 25.5% below the five year average (2.856 Tcf, a difference of 727 Tcf).  As shown below, the 2014 deviation from the five year average is becoming a mirror image of 2012 when storage levels blossomed before returning to more normal levels later in the year.  While the current storage level is still nearly 3/4 of a Tcf below the five year average, higher than normal storage injections for the past three months have steadily chipped away at that deviation.