Friday, October 31, 2014

U.S. Rig Count: +2 to 1,929 (But Gas Rigs +14)

The Baker Hughes U.S. rig count was up two this week to 1,929.  Oil rigs were down 13 to 1,582, gas rigs were up 14 to 346 (their highest level since February 7, 2014) and miscellaneous rigs were up one to one.  By type, horizontal rigs were down two to 1,353, vertical rigs were up four to 365 and directional rigs were unchanged at 211.  Among gas rigs, horizontal rigs were up 11 to 256, directional rigs were up four to 63 and vertical rigs were down one to 27.

Thursday, October 30, 2014

A Bunch of New Louisiana Completions

  • Roos #33, Petrohawk Operating: 7.252 MMcf/day IP on 16/64 in. choke at 5,690 psi; Perfs: 11,383-15,805, length: 4,422 ft.; Elm Grove Field, Bossier Parish, S17/T16/R11; res. A, serial #247797 
  • Brown 17 #7-ALT, Petrohawk Operating: 8.706 MMcf/day IP on 16/64 in. choke at 7,012 psi; Perfs: 11,168-15,628, length: 4,460 ft.; Elm Grove Field, Bossier Parish, S17/T16/R11; res. A, serial #248068 

EIA: Storage +87 Bcf to 3.48 Tcf

The EIA reported this morning that working gas in storage was up 87 Bcf last week to 3.48 Tcf.  The weekly injection was 93% greater than last year (+45 Bcf) and 47% above the five year average (+59 Bcf).  The current storage level is now 7.8% below last year (3.774 Tcf, a difference of 294 Bcf) and 8.2% below the five year average (3.79 Tcf, a difference of 310 Bcf).


Temperatures in the Lower 48 last week averaged 56.7 degrees, which was 2.6 degrees warmer than last year and 1.7 degrees warmer than average.

Wednesday, October 29, 2014

EXCO Provides Haynesville Operations Update

EXCO Resources reported quarterly earnings yesterday and provided an operational update for its Haynesville acreage.  The company is circling the wagons a bit, especially as natural gas prices are dropping.  It is still looking for a new CEO and has been shedding assets in an effort to pay down debt to maximize liquidity.  It has also lowered capital spending and is shifted focus away from the Marcellus Shale and instead concentrating on the Haynesville and Eagle Ford.


Tuesday, October 28, 2014

Rig Map Updated, Improved

I've been getting lazy about updating my Haynesville maps.  It's been a couple of years since updating the completions map (it's sort of unwieldy in Google Maps), but I have fewer excuses for not updating the rig count.  After being prodded (thank you, John), I updated the information and rebuilt the map on the newer Google Maps platform.  Now, when I update, I'll add new information by layers so you can see the progression over time (depending on when I get around to updating it...).  To be sadistic, I added one layer for July 30, 2010, which was the 168 rig peak for the Haynesville Shale.  You can see how things have changed over time:


BHP Looking to Sell Fayetteville Shale Assets (and a Dose of Cynicism)

Well, when I first read the headline in the Financial Times, it said "BHP puts gas asset up for sale as it finetunes US shale business" (good article but may require registration; here's another).  My first thought was that BHP was going to unload its Petrohawk assets, including the Haynesville.  Instead, BHP is looking to dump the Fayetteville Shale assets it bought from Chesapeake Energy in 2011 for $4.75 billion.  Seemed like a good idea at the time, at least for Chesapeake, but it hasn't worked out for BHP because natural gas prices have remained in the toilet since then.

The sale is part of a larger corporate strategy by BHP to focus on its Big Four commodities:  iron ore, petroleum, copper and coal.  It also wants to shift its oil and gas focus more towards liquids than gas (sound familiar?), which is pretty much all you would get from the Fayetteville.  Over the past decade, it became fashionable for the big mining conglomerates to cobble together as many different assets as possible to (unintentionally) become unmanageable behemoths.  Fashionable, meaning the companies' stock prices increased as Wall Street analysts fawned over them.

Monday, October 27, 2014

Haynesville Shale Rig Count: -1 to 25

The Haynesville Shale rig count was down one last week to 25.  Louisiana held at 20, while Texas lost one to end at five (Goodrich left Angelina Co.).


Friday, October 24, 2014

New Louisiana Completions

  • Lady Oak Farms 4-9 H #1, Petrohawk Operating: 9.442 MMcf/day IP on 16/64 in. choke at 8,036 psi; Perfs: 12,057-17,325, length: 5,268 ft.; Caspiana Field, Red River Parish, S4/T14/R12; res. A, serial #247435 
  • Lady Oak Farms 4-9 H #2, Petrohawk Operating: 9.517 MMcf/day IP on 16/64 in. choke at 8,224 psi; Perfs: 11,819-16,927, length: 5,108 ft.; Caspiana Field, Red River Parish, S4/T14/R12; res. A, serial #247436 

U.S. Rig Count: +9 to 1,927

The Baker Hughes U.S. rig count was up nine this week to 1,927.  Oil rigs were up five to 1,595 and gas rigs were up four to 332.  By type, horizontal rigs were up two to 1,355, vertical rigs were down one to 361 and directional rigs were up eight to 211.  Among gas rigs, horizontal rigs were down five to 245, directional rigs were up five to 59 and vertical rigs were up four to 28.

The Big Kahuna Helps Keep a Lid on NatGas Prices

The EIA has been updating a variation of the chart below showing production from the main gas shale plays for the past couple of years (I cleaned it up by consolidating it into the major plays):


It's pretty remarkable how much shale gas has been produced over the past half decade. But, as one can clearly see, growth over the past several years has been driven mainly by the Marcellus Shale (light blue in chart above).  Taking that same data and charting the twelve month trailing trends (i.e. 12 months of trailing data from November 2011 versus 12 months of trailing data from November 2010) shows the trend more clearly:


Thursday, October 23, 2014

EIA: Storage +94 Bcf to 3.393 Tcf

The EIA announced this morning that working gas in storage was up 94 Bcf to 3.393 Tcf.  The weekly injection was 9% above last year (+86 Bcf) and 34% greater than the five year average (+70 Bcf).  The current storage level is now 9.0% below last year (3.729, a difference of 336 Bcf) and 9.1% below the five year average (3.731 Tcf, a difference of 338 Bcf).


Wednesday, October 22, 2014

Recent Texas Completions

10/6/14 - 10/21/14:
  • Hill Heirs Deep Gas Unit #5H, XTO Energy: 4.962 MMcf/day IP, 16/64" choke, 4,087 psi; Perfs: 11,282-17,316, length: 6,034 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: MANN, W , A-431 
  • Brent Miller Unit A2 #2H, Encana: 15.971 MMcf/day IP, 20/64" choke, 9,575 psi; Perfs: 14,720-21,322, length: 6,602 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: CHIRINO, JA, A-17 

Tuesday, October 21, 2014

QEP Sells Midstream, But Keeps Haynesville Portion

Tesoro made a splash over the weekend when it announced the purchase of the midstream assets of QEP Resources (formerly Questar) by one of its subsidiaries for $2.5 billion in cash.  The sale of QEP Field Services included gathering, treatment and pipeline infrastructure, but QEP retained midstream assets associated with the Haynesville Shale region.


Monday, October 20, 2014

Haynesville Shale Rig Count Unchanged at 26

Last week's Haynesville Shale rig count was unchanged at 26.  Louisiana was down one (EXCO) to 20, while Texas was up one (BP!) to six.  This week marks the first time BP has drilled a Haynesville well since July 2012.  The company currently has three Haynesville permits in Texas with another one pending.


Recent Texas Permits (Including BP)

10/5/14 - 10/19/14:
  • CGU 29-31 #72HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: MORRIS, J, A-446 
  • Coyotes DU #B 1SL, XTO Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: ANDERSON, G, A-47 

U.S. Rig Count: -12 to 1,918 (But Gas Rigs +8)

The Baker Hughes U.S. rig count was down 12 last week to 1,918.  Oil rigs were down 19 to 1,590, gas rigs were up eight to 328 and miscellaneous rigs were down one to zero.  By type, horizontal rigs were unchanged at 1,353, vertical rigs were down eight to 362 and directional rigs were down four to 203.  Among gas rigs, horizontal rigs were up nine to 250, directional rigs were down three to 54 and vertical rigs were up two to 24.

Thursday, October 16, 2014

EIA: Gas in Storage +94 Bcf to 3.299 Tcf

The EIA announced this morning that working gas in storage was up 94 Bcf to 3.299 Tcf.  The weekly injection was 19% higher than last year (+79 Bcf) and 21% above the five year average (+78 Bcf).  The current storage level is now 9.4% below last year (3.643 Tcf, a difference of 344 Bcf) and 9.9% below the five year average (3.661 Tcf, a difference of 362 Bcf).


Tuesday, October 14, 2014

Last Week's Louisiana Completions


  • LSU 31-6 HC #1, Petrohawk Operating: 7.711 MMcf/day IP on 16/64 in. choke at 6,839 psi; Perfs: 11,437-16,546, length: 5,109 ft.; Elm Grove Field, Bossier Parish, S31/T17/R12; res. A, serial #246177 
  • Gray Inv. 29-32 HC #1-ALT, Petrohawk Operating: 9.091 MMcf/day IP on 16/64 in. choke at 7,300 psi; Perfs: 11,542-16,763, length: 5,221 ft.; Elm Grove Field, Bossier Parish, S29/T17/R12; res. A, serial #247772 

Reflections on Windfall Tax Spending in DeSoto

Five years ago, the movie "Haynesville" came out and arrived at a theater near me.  One of my takeaways was the discussion of Norway's approach to the oil wealth "problem."  The country has maintained a very conservative approach to managing its energy windfall and created a trust fund that benefits the entire population of the country.

I was thinking about Norway when reading an article on the Environment and Energy web site reflecting on the spending of Haynesville tax revenues in DeSoto Parish and the communities within it, which racked up huge tax windfalls in tax revenues from the short-lived Haynesville Shale drilling boom of 2009-11.  Not exactly the Norway approach, and not everyone will approve of how funds were allocated, but most of the entities made some one-time purchases that would normally have been out of reach (but were not excessively extravagant) and focused on health, safety and education in their spending.  Others weren't quite as prudent.  Some entities even kept some money around for a rainy day, not exactly a Louisiana oil boom mentality.  Maybe some of us actually learned something from years of bouncing around in a recurring boom-bust energy cycle.

Haynesville Shale Rig Count Unchanged at 26

The Haynesville Shale rig count was unchanged at 26 last week.  Louisiana held at 21 and Texas was unchanged at five.  The only action of note was the movement of a Chesapeake rig from Caddo to Sabine Parish in Louisiana.


Endeavour International Declares Bankruptcy

Endeavour International Corporation, a Houston-based E&P company with an international focus, announced earlier this week that it had declared Chapter 11 bankruptcy.  Delays in a couple of major offshore projects in the North Sea put the company in a cash flow crisis that ultimately led to the filing.

Endeavour has a small presence in the Haynesville Shale.  It entered the play in 2010 through a transaction with Cohort Energy, a subsidiary of J-W Operating, to buy half of the company's Haynesville acreage, amounting to 7,250 net acres.  Endeavour maintains a working interest in this acreage and is not listed as an operator in the Haynesville.  The company will continue to operate, albeit with a different ownership structure.

Saturday, October 11, 2014

Another Big Plant Coming to Louisiana

Connecticut-based Castleton Commodities International announced this week that it plans to build a methanol plant in Plaquemines Parish, LA.  The site is downriver from New Orleans on the east bank of the river near Braithwaite.  The plant is expected to cost $1.2 billion and produce 5,000 metric tons of methanol per day and use natural gas as a feedstock.  While it is not specifically mentioned, the downriver location gives Castleton easy access to the Gulf of Mexico and international shipment, yet another way to export U.S. natural gas by turning it into a basic industrial product and bypassing the LNG route.

Friday, October 10, 2014

U.S. Rig Count: +8 to 1,930

The Baker Hughes U.S. rig count was up eight this week to 1,930.  Oil rigs were up 18 to 1,609, gas rigs were down ten to 320 and miscellaneous rigs were unchanged at one.  By type, horizontal rigs were up 12 to 1,353, vertical rigs were down two to 370 and directional rigs were down two to 207.  Among gas rigs, horizontal rigs were up one to 241, directional rigs were down three to 57 and vertical rigs were down eight to 22.

Thursday, October 9, 2014

Pink Drill Bits?

Every October I play a parlour game to guess what unusual new thing will get "pinked" for Breast Cancer Awareness Month.  Drill bits might be this year's winner.  Baker Hughes, in a promotion deal with the Susan G. Komen organization, is distributing pink drill bits this month.


After a few weeks of so much pink (especially during NFL games), I get a bit cynical and see it more as a bunch of marketing managers getting on board with a popular brand (and visa-versa).  Don't get me wrong, I am very appreciative of the funding and attention that Komen has brought to the treatment of breast cancer over the past couple of decades.  I feel especially hypocritical saying this because my family has been a direct benefactor of this progress.  But after a while, it feels that this one cause is sucking all the air out of the room when the world is full of other worthy causes that unfortunately don't have such a ready-made marketing angle.

EIA: Gas in Storage +105 Bcf to 3.205 Tcf

The EIA reported this morning that working gas in storage is up 105 Bcf to 3.205 Tcf.  The weekly injection was 15% above last year (+91 Bcf) and 25% higher than the five year average (+84 Bcf).  The current storage level is now 10.1% below last year (3.564 Tcf, a difference of 359 Bcf) and 10.5% below the five year average (3.583 Tcf, a difference of 378 Bcf).