Thursday, September 30, 2010

EIA: Storage +74 Bcf to 3.414 Tcf

Working gas in storage showed another relatively big increase this week with a net injection of 74 Bcf, bringing the total gas in storage to 3.414 Tcf.  This week's injection was 14% higher than last year (+65 Bcf) and 10% higher than the five year average (+67 Bcf).  Current storage levels are 4.6% lower than last year and 6.3% higher than the five year average.

Friday, September 24, 2010

Haynesville Shale Rig Count: -1 to 171

Rigs were on the move in the Haynesville Shale last week. Lots of movement but only a one rig net decrease, bringing the total number of working rigs to 171.  There were two fewer working rigs in north Louisiana and one more rig in east Texas.  The revised rig count spreadsheets and maps have been posted.


U.S. Rig Count: -11 to 1,650

The weekly Baker Hughes rig count showed an 11 rig decrease, bringing the weekly total to 1,650.  The biggest decrease was felt in gas rigs, which dropped 15 to 967.  Oil rigs increased by three to 673 and miscellaneous rigs increased by one to 10.  By type, horizontal rigs remained steady at 912 (55% of all rigs), while vertical rigs decreased by nine and directional rigs decreased by two.

In the Haynesville Shale region, inclusive of other formations, the rig count dropped by two to 198 with one rig decreases in both north Louisiana (134) and east Texas (64).

I expect the detailed Haynesville rig count to be completed this afternoon.

Callon Petroleum: One and Done

Callon Petroleum announced earlier this week that its first Haynesville Shale well will be its last until prices pick up.  The George R. Mills 1H #1 flowed at an initial rate of 10.5 MMcf/day (full information below) and is producing at a restricted rate through the clean up process.
  • George R. Mills 1 H #1, Callon Petroleum:  10.5 MMcf/day IP on 18/64 in. choke at 7,000 psi; Swan Lake  Field, Bossier Parish, S36/T16/R11; res. A, serial #241192
Because the company has no other drilling obligations in the play, it will hold off further activities until gas prices pick up.  That's not a huge decrease in activity in the grand scheme as Callon only planned to drill two wells per year for three years, but Callon made a big deal about its diversification move into the Haynesville and away from the Gulf of Mexico.

What is the Real Carbon Content of Oil Sands?

The question of the carbon intensity of oil sands is making the rounds again after a report from IHS Cambridge Energy Research Associates (CERA) stated that the excess carbon put out by Canadian oil sands is "lower than commonly perceived."  The Financial Times dug a little deeper and found that the conclusion is based on the fact that while the oil sands product indeed is a bigger carbon producer (5-15% higher than other crude), when U.S. refiners mix the oil sands product with lighter crude the ultimate product is only around 6% more carbon intensive.

I'm finding it hard to believe that CERA got paid to draw the conclusion that when you dilute something it becomes less potent.  Nevertheless, the report will be flogged by those trying to build long oil pipelines from Canada to U.S. refiners.

Thursday, September 23, 2010

EIA: Storage + 73 Bcf to 3.34 Tcf

The weekly EIA working gas in storage report showed a 73 Bcf increase, bringing the total amount of natural gas in storage to 3.34 Tcf.  The weekly injection is on par with (but slightly higher than) last year's figure (+66 Bcf) and the five year average (+70 Bcf).  The current storage level is 5.0% lower than last year's level but 6.2% higher than the five year average.


Temperatures across the country continued to be generally mild - slightly higher than average but a tad bit cooler than this week last year - so cooling load is pretty much out in helping to support gas prices.  Now the gas industry is counting the days until the first big Arctic blasts.

Wednesday, September 22, 2010

New Louisiana Completions

  • C M Hutchinson 30 H #1, Questar: 13.36 MMcf/day IP on 10/64 in. choke at 7,490 psi; Elm Grove Field, Caddo Parish, S30/T16/R12; res. A, serial #240809
  • Olinkraft Inc 32 #3, EXCO Operating: 12.171 MMcf/day IP on 20/64 in. choke at 7,023 psi; Caspiana Field, DeSoto Parish, S32/T15/R13; res. A, serial #239882
  • Dillard 17 #5, EXCO Operating: 12.113 MMcf/day IP on 20/64 in. choke at 4,933 psi; Caspiana Field, DeSoto Parish, S17/T14/R12; res. A, serial #240402
  • Green Rives 21 H #2, EnCana Oil & Gas: 0.845 MMcf/day IP on 16/64 in. choke at 1,402 psi; Holly Field, DeSoto Parish, S21/T14/R14; res. A, serial #240706

Monday, September 20, 2010

Petrohawk Reports Mid-Bossier Completion

In an investor presentation last week, Petrohawk Energy self-reported results from its long-anticipated Middle Bossier Shale completion, Whitney 19 H #1:
  • Whitney 19 H #1:  7 MMcf/day IP on 14/64 in. choke at 8,100 psi; Converse Field, Sabine Parish, S30/T10/R13; res. HA/Mid-Bos, serial #240723
Petrohawk was kind enough to provide some technical analysis too:



The Mid-Bossier spreadsheet and maps have been updated accordingly.  

A Ray of Light from the Legislature?

Each year I breathe a sigh of relief with the closing of the Louisiana legislative session.  It is a rare day when I have kind words for the Legislature - it seems our elected officials are more interested in promulgating obnoxious legislation that keeps us locked in a never-ending battle with Mississippi for 50th place on one list or another - but I recently saw a ray of light.

In reading about the new Nucor iron plant in St. James Parish, I was interested to see reference to recently enacted HB 1006, which provides rebates of state severance taxes on Louisiana-sourced natural gas used in "Mega Projects," large economic development projects like the Nucor plant.  (It looks like the Nucor plant isn't eligible for the incentive on the first phase but it might be for later phases.)

This looks like a good program.  I view economic development incentives as a mixed bag.  You can argue the wisdom of paying for jobs, but I am pleased to see a program that pushes Louisiana natural gas as a way to attract industry.  We certainly have gas in abundance, and the state is not dispensing it for free by rebating the severance tax.  It's a win-win:  it might not look like a ton of money to a prospective company looking to locate a plant, but it is a tangible economic benefit and it does attract natural gas users.  I'll be interested to see if it is utilized successfully.

Sunday, September 19, 2010

Recent Louisiana Completions

  • Red River Bend 22 H #1, Petrohawk Operating: 5.508 MMcf/day IP on 14/64 in. choke at 7,921 psi; Cedar Grove Field, Bossier Parish, S15/T17/R13; res. A, serial #240374
  • Kovalsky 22-13-13 H #1, Chesapeake Operating: 17.487 MMcf/day IP on 22/64 in. choke at 7,760 psi; Red River-Bull Bayou Field, DeSoto Parish, S22/T13/R13; res. A, serial #240971
  • Hewitt Land Invest. LLC 34 #1, EXCO Operating: 9.262 MMcf/day IP on 20/64 in. choke at ? psi; Caspiana Field, DeSoto Parish, S34/T14/R12; res. A, serial #240067
  • Paul Little 7 H #1, Petrohawk Operating: 9.879 MMcf/day IP on 16/64 in. choke at ? psi; Holly Field, DeSoto Parish, S6/T13/R13; res. A, serial #240714
  • Getulio Brown 34 H #1, EnCana Oil & Gas: 24.767 MMcf/day IP on 33/64 in. choke at ? psi; Bracky Branch Field, Red River Parish, S34/T14/R10; res. A, serial #239977
  • Virginia Webb 13 H #1, EnCana Oil & Gas: 16.65 MMcf/day IP on 19/64 in. choke at ? psi; Redoak Lake Field, Red River Parish, S13/T11/R10; res. A, serial #240624
  • Cassel 35 #1, Eagle Oil & Gas Co.: 10.891 MMcf/day IP on 13/64 in. choke at 8,300 psi; Converse Field, Sabine Parish, S35/T9/R14; res. A, serial #240817
The updated spreadsheet will be posted by Thursday morning.

Recent Texas Completions

Completions:
  • George Foreman GU 1 #1H, Samson Lone Star: 10.055 MMcf/day IP, 20/64" choke; Carthage Field (Haynesville Shale), Harrison Co.
  • Hassell Gas Unit #7H , EOG Resources: 11.31 MMcf/day IP, 14/64" choke; Carthage Field (Haynesville Shale), Nacogdoches Co. (!!!)
  • Wiener Estate D #1, Classic Operating: 1.373 MMcf/day IP, ?/64" choke; Carthage Field (Haynesville Shale), Panola Co. (vertical)
  • Bush #1, Unit Petroleum: 0.118 MMcf/day IP, 12/64" choke; Carthage Field (Haynesville Shale), Shelby Co. (vertical)
Development Activity:
  • Jordan #3, Valence Operating; Carthage Field (Haynesville Shale), Harrison Co.
  • Doyh-Mekh GU 1 #2 H, Berry Oil; Carthage Field (Haynesville Shale), Harrison Co.
  • Smith SU #1 H, Exco Operating; Carthage Field (Haynesville Shale), San Augustine Co.
  • Black Stone Unit A-17 #1 H, EnCana; Carthage Field (Haynesville Shale), San Augustine Co.
  • Vandals DU #1 H, XTO Energy; Carthage Field (Haynesville Shale), Shelby Co.
The spreadsheet will be updated and posted later Sunday or on Monday

Haynesville Rigs: -3 to 172

The weekly Haynesville Shale rig count showed a three rig decrease to 172.  Texas held steady at 42, while Louisiana dropped three to 130.


Friday, September 17, 2010

U.S. Rig Count: +7 to 1,661

The weekly Baker Hughes rig count showed a seven rig increase to bring the national total of working rigs to 1,661.  Working oil rigs increased by seven to 670, while gas rigs decreased by two to 982.  Miscellaneo rigs were down two to nine.  By type, vertical rigs increased by 15 and horizontal rigs increased by one, while directional rigs decreased by nine.

In the Haynesville Shale region, inclusive of other formations, the rig count decreased by two to 200.  The count dropped by three in north Louisiana to 135 and increased by one in east Texas to 65.

Detailed Haynesville Shale rig counts and maps should be available Sunday.

LNG Terminal Off Alabama Coast Approved

On Wednesday, the state of Alabama approved construction of a closed-loop LNG terminal, called the Bienville Offshore Energy Terminal, 63 miles south of Dauphin Island that will cost hundreds of millions of dollars to build.

Huh?  What am I missing?

Why build an LNG terminal to import foreign gas when it would be a HELL of a lot cheaper to build a pipeline from north Louisiana?  The gas is here in great abundance.  In fact, the proposed LaCrosse pipeline would have brought gas from the Haynesville Shale to southeast Louisiana with hopes of taking it east along the Gulf Coast.


The open season for that pipeline was unsuccessful for lack of interest, and I'm not sure if the project is going forward.  Wouldn't it be a lot easier to bring the gas from the Haynesville Shale (Enbridge already wants to build the pipeline!) to Alabama?

What gives?

Thursday, September 16, 2010

Reliance Looking at Fourth Shale Deal?

Recent speculation has Reliance Industries, India's most valuable public company, eying a joint venture deal with Chesapeake Energy for its interests in the Eagle Ford Shale (also).  If consummated, this would be the fourth U.S. shale deal in the past several months for Reliance.

Chesapeake has around 600,000 acres in the Eagle Ford and has been vocal about its plans to complete a joint venture for the acreage soon to accelerate development of the play.  The company has eight rigs working in the play but plans to ramp up to 43 by year end 2012 (in case you're wondering what CHK plans to do with its Haynesville rigs once its acreage is HBP...)


A deal with Chesapeake would make perfect sense for Reliance.  The company's strategy is to spend money to learn the shale game in advance of the government of India leasing three potential shale plays next year.  There's nobody better to learn from than Chesapeake.  The problem might be finding a seat at the academy now that the company has so many international partners.

Trader Chesapeake

Not to pick on Chesapeake today, but one of the things that jumps out about the company's recent strategy is its reliance on trading fees to drive short-term profits and lock in long-term prices.  Kudos to management for aggressively positioning the company for good pricing in a low price environment, but the company's recent strategy has been to make money at hedging, not just manage its risk.  This is an unusual approach for an operating company.  No doubt that Chesapeake is stacked with smart traders to rival any Wall Street firm, but the trading aspect adds a layer of risk to the company because you ultimately get a little too smart for your britches.

Lately, the company has aggressively sold long-dated (2013 to 2020) call options on natural gas at $8.  Selling long calls on a product you produce is not necessarily risky, but it is an indication you don't expect prices to rise that high.  It also means that Chesapeake  has capped its price for a portion of its production at $8 for the next ten years.  But the trading activity has also generated a pile of cash that should be viewed as one-time money to boost short-term profitability.  The $8 ceiling for a portion of its production is not very optimistic, but it might be realistic.

Ultimately I wonder how involved an E&P company should get in speculative trading outside of operational hedging.  True, Chesapeake has the production to back up the options it is selling, but the company shouldn't lose focus or misdirect investors with one-time, short-term gains.  Is this the beginning of more risky trading activity?  Is there fire where there is smoke?  The company might be packed with brilliant minds that transcend the energy industry, but so was Enron.  (Harsh, yes, but the concern is valid.)

New Nucor Plant to be a Gas Customer

The big news in Louisiana today is that Nucor Corp. agreed to build a $3.4 billion iron and steel plant in St. James Parish between New Orleans and Baton Rouge.  The plant will be built in five stages, starting with an iron processing facility that uses direct iron reduction, which uses natural gas power to convert iron ore pellets into high quality direct reduced iron.

The direct iron reduction plant will be built rather than a traditional pig iron plant that uses carbon-intensive blast furnaces and coke ovens.  While Nucor would have preferred the pig iron plant, it realized that carbon legislation - that has yet to materialize - might make that process cost prohibitive.

While another industrial facility in south Louisiana is a mixed blessing (at least for those downriver of said facility), it is great to see a big new natural gas consumer on the horizon.  While I'm sure it was the state's economic incentives (approximately $125,000 per future employee) that ultimately drew Nucor to Louisiana, I'm sure knowledge of the abundance of natural gas from the nearby Haynesville Shale didn't hurt either.

LA Lease Auction: Average Haynesville Area Bonus $5,915

The Louisiana Mineral Board held its monthly lease auction of state owned and adjudicated properties last week, and the average lease bonus for land in the Haynesville Shale region was $5,915.  The weighted average (weighted by acreage) was $5,537, not far off.  The royalty percentages were all 25%.


The bidding action was not particularly hot.  Of the leases awarded, there was only one bid per parcel.  Two other parcels, one in DeSoto Parish (110 acres in S15/T11/R10) another in Caddo Parish (32 acres in S35/T18/R16), didn't even receive bids.

Got to Love Chesapeake!

I read the current shareholder presentation for Chesapeake Energy this morning, and I couldn't help but feel this crazy bipolar energy emanating from it.  It ranged from pandering ("The market has spoken, CHK has heard the message and the shift to liquids is well under way.") to bludgeoning ("Investment community short natural gas (in fact, hates natural gas now and forever)") to arrogant ("Do we make it look too easy?").  But the message was clear: 1) we view ourselves as the big dog, 2) we will follow the market wherever it leads us, and 3) why the HELL is our stock price so low?

I love Chesapeake because they are out front on all things natural gas (when they aren't promoting their "shift to liquids"). No other company is pushing gas like Chesapeake.  But CHK is not going to fall on the gas sword.  It has declared that it will shift to liquids, most notably oil, and oh, by the way, we started doing it two years ago.  Putting money where the mouth is, Chesapeake expects to spend 55% of its capital dollars on oil and NG liquids by 2012.  To put that in perspective, CHK spent 10% of its capex on liquids in 2009 and expects to spend 32% on liquids in 2010 (lots of lease deals, I'm sure). In the spirit of the company's new love of liquids, I've taken the liberty of changing Chesapeake's logo:



EIA: Storage +103 Bcf to 3.267 Tcf

Working gas in storage took a big jump this week, increasing 103 Bcf to 3.267 Tcf.  The net injection was higher than both this week last year (+67 Bcf) and the five year average (+77 Bcf).  The current storage level is 5.3% below last year's level and 6.2% above the five year average.


Last week, average temperatures across the country were below normal, breaking an amazing 17 week streak of above normal temperatures.  Given the temperate weather across the country and the general end to the cooling season, the bump in storage is not a surprise, but I sure did get used to below average net injections.

Wednesday, September 15, 2010

Lots of New Louisiana Completions

  • Franks 11-16-13 #1, Chesapeake Operating: 15.662 MMcf/day IP on 22/64 in. choke at 6,105 psi; Elm Grove Field, Caddo Parish, S3/T16/R13; res. A, serial #240179
  • Mayo 13-16-14 H #1, Chesapeake Operating: 16.224 MMcf/day IP on 22/64 in. choke at 7,666 psi; Cedar Grove Field, Caddo Parish, S13/T16/R14; res. A, serial #240427
  • Taylor P 17-16-14 H #1, Chesapeake Operating: 14.256 MMcf/day IP on 22/64 in. choke at 6,473 psi; Metcalf Field, Caddo Parish, S17/T16/R14; res. A, serial #240267
  • Black Stone 28-21 H #1, EnCana Oil & Gas: 5.644 MMcf/day IP on 18/64 in. choke at 5,939 psi; Shreveport Field, Caddo Parish, S28/T18/R14; res. A, serial #240462
  • Red Oak Timber 6 #1, EXCO Operating: 4.39 MMcf/day IP on 12/64 in. choke at 5,497 psi; Bethany Longstreet Field, Caddo Parish, S6/T14/R15; res. non-unitized, serial #240460

A Modest Proposal

I've been reading about the EPA roadshow around the country this past week soliciting comments on the practice of hydraulic fracturing.  The process has kicked up the expected furor, especially in its final stop in Binghamton, NY.

I've gotten so tired of the commotion that, in the spirit of Jonathan Swift, I've got a Modest Proposal.  I propose that all drilling in the Marcellus Shale be suspended immediately - tomorrow - until there is some kind of consensus on shale gas drilling in the region.

Tuesday, September 14, 2010

Saudi Arabia to be the ... Saudi Arabia of Shale Gas?

Well, not quite.  Saudi Arabia's state-owned oil company, Saudi Aramco, announced that the country might have a significant resource of shale gas (article from ft.com, which requires registration).  Interestingly, the Kingdom looks at natural gas as a way of unlocking greater oil exports.  This summer set a record for electricity consumption in Saudi Arabia, driven by high cooling demand.  (An aside: can you imagine a hotter than usual summer in Saudi Arabia?)  To meet this demand, the country burns crude oil to power electric plants, up to 750,000 barrels per day.  If Saudi Arabia can use natural gas for electricity, it leaves more crude oil available to export.  That's a serious win-win for the House of Saud.

Right now, it doesn't look like the techniques that have made North American shale gas a sensation, notably hydraulic fracturing, will work with the same efficacy in the deserts of Saudi Arabia.  The Kingdom is looking for technological help from its international oil company (IOC/supermajor) friends, or more precisely, the IOCs that have been shut out of Saudi Arabia for decades that desperately want in.

Suddenly, I'm wondering if all that deal activity with multinational energy companies striking joint venture agreements in North American shale fields might open up shale gas production in Saudi Arabia instead of Eastern Europe.  Most of the supermajors are represented in "learning" joint ventures in the Marcellus, Haynesville, Eagle Ford and Barnett Shales.  Where exactly is all that newfound knowledge going?

Cheniere Wins Key Approval for LNG Export

Cheniere Energy, owner of what is said to be the largest LNG regasification facility in the world, last week received approval from the U.S. Department of Energy to export natural gas from its Sabine Pass facility in Cameron Parish, LA.  Cheniere has applied to the Federal Energy Regulatory Commission to build a liquefaction facility capable of exporting up to 2.6 Bcf of natural gas per day.  Assuming remaining permits are granted, the liquefaction facility would be built in phases and would be ready to begin exporting in 2015.  (another article)

Petrohawk's Incorrect Rig Count Data

A couple of weeks ago, I read a presentation Petrohawk Energy delivered at the Enercom conference in Denver.  In it, the company claimed that the Haynesville Shale rig count was declining (below: Petrohawk's slide (page 6), my annotation).


I don't see it that way. I thought about commenting at the time but let it go.  I see today that the same chart showed up in Allen Brooks's influential "Musings from the Oil Patch" semi-monthly newsletter, so I feel the need to speak up.

Monday, September 13, 2010

New Texas Completions

Completions:
  • Rollie Sims Deep GU #1H, NFR Energy : 10.199 MMcf/day IP, 24/64" choke; Carthage Field (Haynesville Shale), Harrison Co.
  • Carolyn Bell Deep GU #2H, NFR Energy : 8.137 MMcf/day IP, 23/64" choke; Carthage Field (Haynesville Shale), Harrison Co.
  • Walling Gas Unit #1, Exxon/XTO Energy: 6.757 MMcf/day IP, 18/64" choke; North Carthage Field (Bossier Shale), Harrison Co.
  • Lutheran Church #4, Goodrich Petroleum: .664 MMcf/day IP, 28/64" choke; Carthage Field (Haynesville Shale), Panola Co. (vertical)

Friday, September 10, 2010

Haynesville Shale Rigs: Unchanged at 175

The weekly rig count showed that the number of working rigs in the Haynesville Shale remained unchanged at 175,  The rig count held steady in both Louisiana (138) and Texas (42).


U.S. Rig Count: +1 to 1,654

The weekly Baker Hughes rig count showed a one rig net increase nationwide, bringing the total number of working rigs to 1,654.  The number of gas rigs increased by three to 980 and the number of oil rigs decreased by two to 663.  By type, directional rigs increased by nine and horizontal rigs by eight, while the number of vertical rigs decreased by 16.

In the Haynesville Shale region, inclusive of other formations, the rig count dropped by one to 202.  The north Louisiana count was stable at 138, while the east Texas count dropped by one to 64.

Thursday, September 9, 2010

GMX Lowering Capex Projection

Yesterday, GMX Resources announced that it will adjust its previously announced 2011 and 2012 capital expenditures by $25 million each year, from $200 million to $175 million. The company extended a sublease to another producer on one of its three rigs through March 25, 2013, the entire term of the lease, which accounts for the lower spending.  GMX will instead maintain two rigs in E. Texas.

The company will be able to maintain projected production levels but will eschew the growth opportunity provided by running the third rig.  To me, this is an indication that the company doesn't see gas prices picking up significantly in the next couple of years, and it knows it won't be rewarded for extending itself to grow production.

The company also noted results from two recent completions:
  • Mercer #11H, GMX Resources:  8.17 MMcf/day IP (average for 30 days of production); North Carthage Field (Bossier Shale), Harrison Co.
  • Verhalen "F" #1H, GMX Resources:  5.74 MMcf/day IP (average for first 60 days of production); Carthage Field (Haynesville Shale), Harrison Co.

EIA: Storage +58 Bcf to 3.164 Tcf

The weekly EIA working gas in storage report showed a 58 Bcf increase to 3.164 Tcf.  The increase was in line, although slightly below, the same week last year (+68 Bcf) and the five year average (+61 Bcf).  The current storage level is now 6.4% lower than the level last year and 5.5% higher than the five year average.

Wednesday, September 8, 2010

Louisiana Completions List Posted

I've posted the updated list of Louisiana Haynesville Shale completions as well as a quick update of the Mid-Bossier Shale wells.  The weekly DNR report didn't have any new completions, but it did have some updated data on wells I've already noted.  If you are interested, you can follow the color code on the spreadsheet to pick up the changes.

EIA Adjusts Natural Gas Price Projections Downward

The EIA released its monthly "Short Term Energy Outlook" report today and the projections reflected some downward adjustments.  The EIA adjusted its projection of U.S. gross domestic product from 3.1% in 2010 to 2.8%.  In 2011, the GDP projection was lowered from 2.7% to 2.3%.  Not coincidentally, the EIA estimated price for Henry Hub natural gas spot prices were lowered to $4.54/MMBtu for 2010 and $4.76/MMBtu for 2011 (down from $4.98/MMBtu).  By my calculation, through yesterday the HH spot price has averaged $4.63/MMBtu YTD in 2010. For gas fans, the EIA projections shown on the chart below is not pretty.



Tuesday, September 7, 2010

Mid-Bossier Shale Map Changes

I've made a couple of changes to the Mid-Bossier Shale map to make it easier to use.  First, I organized the data in a more orderly format rather than the (lazy) paragraph format I had been using. Second, I added my notes about where I sourced the data.  The big question most people have is, "where did you hear that?"  Now you can click the flag on the map (either in Google Maps or Google Earth) and find out.  It is a little raw (i.e. "PR" means press release and "pres" means investor presentation, etc.).

You also will see references to "individual" in a few places in the notes.  These are instances where I've gotten a tip from a knowledgeable (non-anonymous) source and I'm concealing their identity.  I always protect the identity of anyone who feeds me information and I don't share it on the web site or behind the scenes.

Because there is no specific classification for the Mid-Bossier in either Texas or Louisiana, it is a bit of a guessing game.  My collection of Mid-Bossier wells is far from perfect.  I'm sure I am missing some, and one or two may be dubious.  There are some other wells I know of that are not on the list, but I've been asked to wait until the data is public before publishing the data.

One well that is dubious is the Hazel Bryne 3 #1H (Harrison Co. TX, status #689135).  GMX Resources went out if its way in an investor presentation on Aug. 25, 2010 (see page 9) to claim that this Berry Oil completion it is a Mid-Bossier well.  Given GMX's concentration in Harrison County, this might be a little self-serving.  Based on my review of maps and communication with some people more knowledgeable than me, however, it doesn't look like the Mid-Bossier Shale is in this area.  Maybe it's a semantics issue and the nomenclature is getting confused, but I read/heard this as a very specific reference by GMX to the Middle Bossier.  I welcome/request any additional input on this well.  If you don't want to reply, you can email me at haynesvilleplay (at) gmail.com.

New Louisiana Completions Including a Mid-Bossier Update

Mid-Bossier Shale Completion:
  • Red River 5 #3-ALT, EOG Resources, Inc.: 12.816 MMcf/day IP, on ?/64 in. choke, at 6,750 psi; Ten Mile Bayou Field, DeSoto Parish, S8/T11/R12; res. A/Mid-Bos, serial #240930 (this was self-reported by EOG last month at 15.2 MMcf/day)

Haynesville Completions:
  • Smith Heirs 27-15-12 H #3, Chesapeake Operating: 20.616 MMcf/day IP, on 22/64 in. choke, at ? psi; Caspiana Field, Caddo Parish, S27/T15/R12; res. B, serial #237610
  • Gardner 13 #2, J-W Operating: 14.784 MMcf/day IP, on 24/64 in. choke, at 5,400 psi; Elm Grove Field, Bossier Parish, S3/T16/R13; res. A, serial #240020
  • Blackstone 21-12-14 H #1, Chesapeake Operating: 13.776 MMcf/day IP, on 22/64 in. choke, at 7,445 psi; Grand Cane Field, DeSoto Parish, S22/T12/R14; res. A, serial #239886
  • Brown SW Min 14 H #1, EnCana Oil & Gas: 3.043 MMcf/day IP, on 19/64 in. choke, at ? psi; Carroll Creek Field, Red River Parish, S14/T12/R9; res. A, serial #240709
  • Edgar Cason 34 H #1, EnCana Oil & Gas: 5.548 MMcf/day IP, on 17/64 in. choke, at ? psi; Martin Field, Red River Parish, S34/T14/R9; res. A, serial #240708
  • Bill Shaw 1 H #1, EnCana Oil & Gas: 21.612 MMcf/day IP, on 24/64 in. choke, at ? psi; Gahagan Field, Red River Parish, S1/T12/R10; res. A, serial #240552
I will update the Haynesville maps and spreadsheets with this information on Thursday. The Mid-Bossier list has been updated and the map will be updated this afternoon.

Monday, September 6, 2010

Recent Texas Completions

Completions:
  • Nelson "H" #1H, Comstock Resources: 5.6 MMcf/day IP, 14/64" choke; Carthage Field (Haynesville Shale), Panola Co.
  • Walters Gas Unit #1H, Cabot Oil & Gas: 8.295 MMcf/day IP, 12/64" choke; Carthage Field (Haynesville Shale), San Augustine Co. (self-reported last week by Cabot at 21.0 MMcf/day)
  • USA Double H #1, Marathon Oil: 5.444 MMcf/day IP, Adj./64" choke; Carthage Field (Haynesville Shale), Shelby Co.

Developmental Activity:
  • Doyh-Mekh GU 1 #1 H, Berry Oil; Carthage Field (Haynesville Shale), Harrison Co.
  • Foote GU #1 H, NFR Energy; Carthage Field (Haynesville Shale), Panola Co.
  • Golden Eagles DU #1 H, Exxon/XTO; Carthage Field (Haynesville Shale), San Augustine Co. (spud last week)
  • Ironosa Gas Unit #1 H, EOG Resources; Carthage Field (Haynesville Shale), San Augustine Co.
  • Gilbert Wheeler Gas Unit #1 H, Devon Energy; Carthage Field (Haynesville Shale), Shelby Co.

Sunday, September 5, 2010

Haynesville Shale Rig Count: -4 to 175

The weekly Haynesville Shale rig count dropped four rigs to come in at 175.  The big drop was in Texas, which lost six rigs to end up at 42.  Louisiana added two rigs to end up at 133.



It's too soon (from my vantage point) to tell if there is a shift going on here or if it is just a timing thing where lots of rigs are between jobs.  I only counted one rig (a Goodrich rig in Texas) that went from Haynesville to another formation (Cotton Valley in this case).

Friday, September 3, 2010

Revised Maximum Gas Storage Capacities

Today, the EIA released its "Peak Underground Working Natural Gas Storage Capacity" report, which summarizes the capacity of the nation's natural gas storage in the Lower 48 states.  The report showed that the peak working gas capacity as of April 2010 increased 4.1% over the previous year to 4.049 Tcf. The results are below (click for a bigger image):

U.S. Rig Count: -3 to 1,653

The U.S. rig count took a breather this week and was down by three to 1,653, the first negative move since the first week of June and the start of the deepwater drilling moratorium. Interestingly, gas rigs were up by four (to 977) and oil rigs were down by seven (to 665).  By type, directional rigs were down three, horizontal rigs were down one and vertical rigs were up one.

In the Haynesville Shale region, inclusive of other formations, the rig count was down two rigs to 203.  There was one new rig working in north Louisiana, bringing the total there to 138, while there were three fewer rigs working in east Texas, bringing the total there to 65.

Detailed Haynesville rig counts with maps will be posted later today or tomorrow, depending on my schedule.

I Like Renewables, but They Can't Stop the Freight Train

Last week, the United States hosted a two day program attended by representatives from 20 nations with the goal of assisting foreign countries in developing their own shale gas.  That's a huge win-win in my book.  As the Chinese proverb says, "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime."

If foreign nations can tap into their own shale gas resources, you've got the potential for lower carbon emissions, less particulate pollution and greater independence for those countries.  Specifically, if China and India are able to better use gas instead of coal, think of the positive change on the world scene, both environmentally and geopolitically.  Shale gas is not the only answer but it can be a huge piece of the puzzle.  Participants in the event can be lumped into  three groups: Asian energy importers (China, India, Indonesia and Pakistan); Russia's neighbors (Armenia, Bulgaria, Estonia, Georgia, Lithuania, Poland, Romania and Ukraine); and Venezuela's neighbors (Chile, Colombia, Peru and Uruguay), among a few others.

PROVE IT!

I am so freakin' sick of the hydraulic fracturing/groundwater debate.  The latest offender is an editorial cartoon I snipped out of the New York Times last week.


Great. Some cartoonist in Green Bay, Wisconsin watches the trailer for "Gasland" and blindly starts spreading its misinformation in major newspapers.  

I can't believe that the the logical fallacy that connects hydraulic fracturing with groundwater contamination has persisted this long.  Someone needs to prove it, because I don't know of any documented incidents of the process of hydraulic fracturing contaminating a water supply.  This is guilt by hearsay and rumor.  Unfortunately, the major defenders of the process are energy producers, the only group around with a lower approval rating than Congress.

Thursday, September 2, 2010

Recent Louisiana Completions

  • Lodwick 35 #1, Diamond Oil: 0.295 MMcf/day IP, on 18/64 in. choke, at 1,925 psi; Bellevue Field, Bossier Parish, S35/T20/R11; res. non-unitized, serial #238990 (vertical)
  • Camptec 29-14-9 H #1, Chesapeake Operating: 16.44 MMcf/day IP, on 22/64 in. choke, at 7,128 psi; Bracky Branch Field, Red River Parish, S29/T14/R9; res. A, serial #240794
  • Matthews ETAL 18 H #1, Petrohawk Operating: 8.069 MMcf/day IP, on 14/64 in. choke, at 8,908 psi; Red River-Bull Bayou Field, Red River Parish, S19/T13/R11; res. B, serial #239883
The Louisiana completions maps and spreadsheets have been updated with this information and that from earlier in the week.

EIA: Storage +54 Bcf to 3.106 Tcf

The weekly EIA working gas in storage report showed a 54 Bcf net injection, bringing the working gas in storage figure to 3.106 Tcf.  As it has been for the past couple of months, the net injection was less than both last year (+64 Bcf) and the five year average (+62 Bcf), but the spread has narrowed somewhat as temperatures across the country have moderated.  The current storage level is now 6.3% lower than last year and 5.8% higher than the five year average.

The biggest gain last week was in the East Region, with a 53 Bcf net injection.  The West (-6 Bcf) and Producing (+7 Bcf) regions more or less canceled themselves out. Fortunately, with the big injection in the East Region, the storage levels there are only 1.1% higher than the five year average.