Thursday, March 31, 2011

USGS on Smackover, Norphlet, etc.

I meant to post this a while back, but here is a link to the U.S. Geological Survey document "Assessment of Undiscovered Oil and Gas Resources in Jurassic and Cretaceous Strata of the Gulf Coast, 2010," which was released earlier this month.  The report attempts to quantify undiscovered oil, gas and NGLs in the three USGS defined provinces along the Gulf Coast.  In the report is an assessment of the various "assessment units" of the Haynesville and Bossier as well as the Smackover and Norphlet formations.

The report is fairly simplified, but to a regular old yutz like me who likes pretty pictures over long tables, it had a generalized stratigraphic section of the region to help keep all of the various formations straight.  It's interesting to see that the Smackover and Norphlet are only 5-10 million  years older than the Haynesville.  Not long in geologic time.

New Louisiana Completions

Only a few new Louisiana completions reported by the LA DNR this week, including some old ones (not included here).

  • Slattery 14-16-14 H #1, Chesapeake Operating: 14.065 MMcf/day IP on 22/64 in. choke at 6,790 psi; Perfs: 11,591-16,098, length: 4,507 ft.; Cedar Grove Field, Caddo Parish, S14/T16/R14; res. A, serial #241382
  • Winters 1-16-15 H #1, Chesapeake Operating: 14.064 MMcf/day IP on 22/64 in. choke at 6,261 psi; Perfs: 11,606-16,069, length: 4,463 ft.; Metcalf Field, Caddo Parish, S1/T16/R15; res. A, serial #241394
  • Chaffin Heirs 4 H #2-ALT, El Paso: 12.94 MMcf/day IP on 16/64 in. choke at 7,450 psi; Perfs: 12,197-16,625, length: 4,428 ft.; Holly Field, DeSoto Parish, S4/T13/R14; res. A, serial #241337

EIA: Storage +12 Bcf to 1.624 Tcf

Uh oh, storage is going back up...  The weekly EIA report of working gas in storage showed a 12 Bcf increase to 1.624 Tcf.  This week's net injection level is the same as last year (that's not saying much) but 34 Bcf higher than the five year average (a 22 Bcf withdrawal).  The current storage level is 0.7% lower than last year's and 4.4% higher than the five year average.


Warm weather across the country last week led to the weak storage number.  Temperatures in the Lower 48 averaged 49.1 degrees, approximately equal to last year and three degrees warmer than average. Generally the west was cooler than usual, but the East South Central and West South Central Regions were about 9 and 10 degrees above normal.

Wednesday, March 30, 2011

Obama's New Push for Greater Energy Independence

Energy independence has been one of the best selling sound bites in Washington for years.  Yet nothing ever seems to happen.  Today in a speech at Georgetown University, President Obama resurfaced the issue and acknowledged, "(w)e cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again.”  The alarm clock is a very apt metaphor, and guess what, it's ringing again.

Petrohawk Update

Petrohawk is among the companies presenting this week at the Howard Weil conference in New Orleans.  While we've discussed what's going on with Petrohawk, I felt it was time to do a little summary since Petrohawk is a pretty good proxy for activity in the Haynesville Shale.

First, Petrohawk believes it will end its lease capture phase in the Haynesville mid-2011.  The current rig count is around 16, but that will drop to seven in the second half of the year as the company shifts more attention and resources to the Eagle Ford Shale.  As the map below shows, the company continues to believe that wells in the core of the Haynesville will have very high estimated ultimate recoveries (EUR), in this case around 8.0 Bcf.  Petrohawk claims that its operated wells will see EURs in the range of 9 to 10 Bcf.

Tuesday, March 29, 2011

New Texas Permits

3/22-3/28/2011:
  • Sterrett #21, Valence Operating; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: MORRIS, D, A-463
  • Snider-Jones-Winocour (Allocatn) #1H, GMX Resources; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: STADLER, RG, A-624
  • Coronado #1H, SM Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: I&GN RR CO, A-392

New Texas Completions

Completions 3/22-3/28/11:

  • Mary Waldron Deep GU #2H, NFR Energy: 7.952 MMcf/day IP, 22/64" choke, 4,615 psi; Perfs: 11,712-15,568, length: 3,856 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: WATSON, W, A-748
  • Sunshine GU 1 #1H, Samson Lone Star: 14.399 MMcf/day IP, 18/64" choke, 9,550 psi; Perfs: 14,258-19,228, length: 4,970 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: CHIRINO, J A, A-17
  • Allison Unit #26H, Devon: 4.539 MMcf/day IP, Adj./64" choke, 2,815 psi; Perfs: 11,115-15,825, length: 4,710 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: LINDSEY, C, A-393

GMX and the Oil Rumor

There has been some chatter that GMX Resources figures into the oil rumor in east Texas.  I kind of put it on the back burner until recently.  First, and most obviously, the company's recent investor presentations (here is today's at the Howard Weil conference) discuss "a new potential oil target below the H/B" and the map of east Texas prominently points out the Valence wells Nancy Brewser #8 well (discussed here in earlier posts) and the Jordan #3, two wells that figure quite prominently in the oil rumor.  The company confirmed that it has 40,000 acres leased prospective for the oil formation



GMX discussed the oil target in a recent conference call and says its the Norphlet sand, which is below the Smackover, and its around 11,900 feet deep.  The formation is a traditional resource trap rather than a shale-like formation and will be drilled through vertical wells.  The company is going to start by re-entering some wells drilled in 2006 to save money since there is a risk of dry holes.   

Monday, March 28, 2011

Recent Louisiana Completions

  • Brossette 13 #1, J-W Operating: 11.049 MMcf/day IP on 22/64 in. choke at 6,000 psi; Perfs: 12,783-17,185, length: 4,402 ft.; Woodardville Field, Bienville Parish, S13/T15/R9; res. A, serial #241399
  • Ches Roy 35-15-10 H #1, Chesapeake Operating: 15.936 MMcf/day IP on 22/64 in. choke at 7,326 psi; Perfs: 12,862-16,623, length: 3,761 ft.; Woodardville Field, Bienville Parish, S35/T15/R10; res. A, serial #241827
  • Colvin 3 H #1, Petrohawk Operating: 6.256 MMcf/day IP on 14/64 in. choke at 8,463 psi; Perfs: 13,992-17,418, length: 3,426 ft.; Lake Bisteneau Field, Bienville Parish, S3/T16/R9; res. A, serial #241924
  • Triple C Min 20 H #1, Petrohawk Operating: 7.701 MMcf/day IP on 14/64 in. choke at 7,565 psi; Perfs: 12,200-16,480, length: 4,280 ft.; Lake Bisteneau Field, Bienville Parish, S17/T16/R9; res. A, serial #241902

Friday, March 25, 2011

Haynesville Shale Rig Count: -1 to 145

The weekly Haynesville Shale rig count was down one to 145.  The Louisiana count was up one to 109 while the Texas count was down two to 36.



U.S. Rig Count: +18 to 1,738

The weekly Baker Hughes rig count showed an 18 rig increase in the U.S., bringing the total number of working rigs to 1,738.  Oil rigs were up 12 (851), gas rigs were up five (880) and miscellaneous rigs were up one (7).  At this trajectory, there will be more oil rigs working in the U.S. than gas rigs.  By type, vertical rigs were up 16, horizontal rigs were up nine and directional rigs were down seven.

In the Haynesville Shale region, inclusive of other formations, the rig count increased by two to 166.  North Louisiana was up three to 117 while east Texas was down one to 49.

Thursday, March 24, 2011

EIA: Storage -6 Bcf to 1.612 Tcf

The weekly EIA working gas in storage report showed a 6 Bcf net withdrawal, bringing the gas in storage to 1.612 Tcf.  The weekly withdrawal was greater than last year (a 7 Bcf injection) but lower than the five year average (-17 Bcf).  The current storage level is 12 Bcf (-0.7%) lower than last year but 34 Bcf (+2.2%), higher than the five year average.


Temperatures in the Lower 48 averaged 47 degrees, 1 degree cooler than last year and three degrees warmer than average.

Wednesday, March 23, 2011

Need Another Reason to Like Natural Gas?

The U.S. is developing a love/hate relationship with natural gas.  The love comes from the obvious: cleaner, domestic, abundant, etc.  The hate mostly comes from the folks scared of hydraulic fracturing who have made huge inroads in the public consciousness, peddling fear at every turn.  You can't read an article about natural gas without some kind of disclaimer about fracking.  Unfortunately, journalists have grown lazy and are now forgetting to mention that there is no proof that fracking impacts groundwater.  No doubt that methane has entered some wells, but the connection to fracking simply is not there.

But I'm always keen to know more reasons to like natural gas.  The Houston Chronicle published one such reason: the greater availability of natural gas and NGLs might lead to a resurgence of the chemical industry in the U.S.  As a feedstock to many chemical plants, affordable and abundant natural gas and liquids like ethane are important drivers to a chemical plant's economic viability.  In recent years, the chemical industry has been shuttering plants in the U.S. and shifting production to the Middle East with its cheap resources, but the resurgence in the gas industry with shale drilling has many chemical companies looking at restarting closed plants or investing in new production facilities.  That means jobs, capital spending, exports (or at least the reduction of imports) and economic growth... all brought to you by natural gas.

Tuesday, March 22, 2011

Damning Natural Gas with Faint Praise

Well, faint praise is better than nothing.  Following the recent tragic Japanese earthquake, it seems as though folks are turning their attention back towards natural gas.  We've discussed this idea already, but the New York Times published an article yesterday suggesting that the fortunes of natural gas may be on the rise, as the fuel is being viewed by many as a safer bet than coal or nuclear.

The article quoted a Société Générale analyst who called gas the fuel of "no choice." Another analyst said that based on the risk/reward equation, gas is a "technical knockout" winner. Neither is exactly a rah-rah assessment, but the important concept to keep in mind is risk/reward.  Nothing is truly risk free, especially in the energy industry - it's all about achieving the best balance for all stakeholders (which is all of us).

Interesting that the article appeared on the front page of the "New York" section of the Times, given that the state currently has a moratorium on Marcellus Shale drilling.  Maybe it won't change anyone's mind, but it certainly is food for thought.

Anadarko Enters Eagle Ford JV with KNOC

Anadarko Petroleum Corp. announced yesterday that it has entered into a joint venture with the Korean National Oil Company (KNOC) for its Eagle Ford Shale assets.  The $1.15 billion deal gives KNOC a 23.67% stake in Anadarko's position, comprising 80,000 acres of the Eagle Ford (oil/gas) and 16,000 acres of the Pearsall Shale (dry gas), which is below the Eagle Ford in places.  KNOC is not paying cash upfront but will instead fund the vast majority of Anadarko's drilling costs up to the $1.15 billion.

This is another in a long line of joint venture deals in North American shale.  The first participants were western multinationals, but the cash rich Asians (and Australians) have gotten involved lately.  It's interesting to see Asian companies - especially nationalized companies - sucking up natural gas assets.  They are taking advantage of the low prices while they last with a long-term view of the future.

While we here in the U.S. are quick to blame the government or whomever for not picking up the ball on natural gas, we have to realize that one of the downsides of our free market economy is that the government is not supposed to "pick winners."  That's what the market is for, right?  It kills me every day that we are sitting on this incredible domestic resource but are unable to take full advantage of it.  Other countries are not so encumbered.

Monday, March 21, 2011

New Texas Permits

3/17/2011 to 3/21/2011:

  • Morrison #1H, EXCO Operating; Carthage Field (Haynesville Shale), Shelby Co. Co., Survey: ODELL, HRS B , A-534
  • Furrh "H" #1H, Comstock Oil & Gas; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: STROUD, J B, A-653
  • Sterrett #19, Valence Operating; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: WILLIAMS, J N, A-712

New Texas Completions

From 3/14/11 to 3/21/11:

  • PEC Minerals Gas Unit No. 3 #1H, XTO Energy: 8.878 MMcf/day IP, 17/64" choke, 4,748 psi; Perfs: 10,719-15,394, length: 4,675 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: ENGLISH, W, A-194
  • Bridges #1H, Chesapeake Operating: 17.237 MMcf/day IP, 24/64" choke, 6,680 psi; Perfs: 12,465-15,510, length: 3,045 ft.; Carthage Field (Haynesville Shale), Sabine Co., Survey: HAILEY, R, A-121
  • Butler Rooney Gas Unit #1H, XTO Energy: 12.097 MMcf/day IP, 16/64" choke, 10,060 psi; Perfs: 13,620-18,843, length: 5,223 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: MARTIN, TJ, A-193

Friday, March 18, 2011

We're #1 !!!

The EIA announced today that the Haynesville Shale has surpassed the Barnett Shale as the most productive natural gas formation in the U.S., producing 5.5 Bcf/day, versus 5.25 Bcf/day for the Barnett.  Pretty astounding for a formation that was virtually unheard of three years ago.

Clear Thinking on Our Future

I was struck when reading a recent cover article in Time Magazine by Fareed Zakaria called "Are America's Best Days Behind Us" that so few people in recent years have demonstrated clear thinking about this country's position in the world.  This is an article I think all Americans should read.

I keep hearing people complaining that the U.S. has become less competitive in one breath and then urge budget drastic cuts in education and infrastructure (some of the key things that made us a great country) in the next.  Our biggest problem is that we've lulled ourselves into a state of complacency.  I won't restate the article, but one of its key conclusions is that the ingredients for greatness are still there but our political system has become completely dysfunctional and is more focused on reinforcing the status quo than creating the conditions for the long-term wellbeing of this nation.  Politics has become an impediment to our progress.

Over the past few months, we have watched people rise up at the peril of their own lives to gain a voice in their native lands, while we in the U.S. have become increasingly fat and lazy.  It's easy to point fingers at everyone else, but we all need to take a good, hard look in the mirror to understand why things don't change.  This article made me look in the mirror, and I urge everyone to read it.

Haynesville Shale Rig Count: -1 to 146

The Haynesville rig count was down one this week to 146.  Louisiana was unchanged at 108 while Texas was down one to 38.  But I don't think this is an accurate reflection of the activity in the play; rather, I think Baker Hughes just phoned it in this week (for the second time in a month).  Oh well, when you depend on free public information, sometimes you get what you pay for.  Expect lots of changes next week.



U.S. Rig Count: +5 to 1,720

The weekly Baker Hughes rig count showed a five rig increase, bringing the total number of working rigs in the U.S. to 1,720.  Oil rigs increased by 12 to 839, while gas rigs decreased by seven to 875.  Miscellaneous rigs held at six.  Horizontal rigs increased by six to 986, the highest level ever, and directional rigs were up five to 231.  Vertical rigs were down six to 503.

In the Haynesville region, inclusive of other formations, the rig count was down one to 164, holding pat in north Louisiana at 114 and dropping one in east Texas to 50.

Thursday, March 17, 2011

New Texas Permits

Texas Haynesville Shale Permits 3/9/11 to 3/16/11:

  • Haynes Unit #1H  , EOG Resources; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: RECTOR, GW, A-470
  • Cayenne GU 1 #1H  , Samson Lone Star; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: CHIRINO, J A, A-17
  • Sterrett #14  , Valence Operating; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: WILLIAMS, JN, A-715

New Louisiana Completions

  • Butler 30 H #1, Petrohawk Operating: 8.374 MMcf/day IP on 14/64 in. choke at 8,731 psi; Perfs: 12,621-17,200, length: 4,579 ft.; Swan Lake Field, Bossier Parish, S31/T15/R10; res. A, serial #241360
  • Morris et al 2-16-15 H #1, Chesapeake Operating: 13.512 MMcf/day IP on 22/64 in. choke at 6,419 psi; Perfs: 11,525-15,987, length: 4,462 ft.; metcalf Field, Caddo Parish, S2/T16/R15; res. A, serial #241506
  • Shirey 21 H #1, Comstock Oil & Gas: 5.544 MMcf/day IP on 14/64 in. choke at 6,075 psi; Perfs: 11,760-15,806, length: 4,046 ft.; belle Bower Field, DeSoto Parish, S21/T13/R16; res. A, serial #241323
  • Shirey 21 H #2, Comstock Oil & Gas: 5.35 MMcf/day IP on 14/64 in. choke at 5,929 psi; Perfs: 11,682-15,754, length: 4,072 ft.; belle Bower Field, DeSoto Parish, S21/T13/R16; res. A, serial #241660

EIA: Storage -56 Bcf to 1.618 Tcf

The weekly EIA working gas in storage report showed a 56 Bcf net withdrawal, bringing the current storage level down to 1.618 Tcf.  The weekly withdrawal was in line with the five year average (-58 Bcf) and double last year's (-25 Bcf).  The current storage level is only one Bcf higher than last year's and 23 Bcf higher than the five year average.

The withdrawal was driven by the East Region, which saw a 51 Bcf withdrawal, while the Producing and West regions were pretty much breakeven.  Interestingly, the current storage level in the Producing region is 18% higher than the five year average while the East and West regions are 8% and 9%, respectively, below their five year averages.

Wednesday, March 16, 2011

Implications of World Events On Energy Markets

That's a mighty lofty title for a post that admittedly will trade more in questions rather than answers.  Like many others, I watch the world news these days with one hand on my lower jaw to keep it from scraping the floor.  What's going on in the world right now is truly unbelievable, from the popular unrest in the Middle East to the earthquake and tsunami in Japan.  What is interesting about all of these events is their direct - although confusing - impact on the world energy markets.

I read this morning that Shell is diverting the first of many LNG cargoes to Japan to help the nation with its sudden energy crisis.  With so much power generation capacity down, Japanese utilities initiated rolling blackouts for the first time in 60 years.  Shell claims it will not take advantage of the "short term pricing implications" and I take them at their word since no company wants to be seen grave dancing in the aftermath of one of the world's greatest natural/man-made disasters.

Monday, March 14, 2011

Recent Texas Completions

Completions from 3/8 to 3/13/2011:

  • C.O. Black #9H, XTO Energy: 7.147 MMcf/day IP, 20/64" choke, 4,776 psi; Perfs: 10,802-15,303, length: 4,501 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: TC RR CO, A-859
  • Briggs-Moreland #14H, XTO Energy: 8.331 MMcf/day IP, 20/64" choke, 5,443 psi; Perfs: 10,680-16,155, length: 5,475 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: ROGERS, A, A-573
  • New Horizons #D1H, XTO Energy: 4.396 MMcf/day IP, 20/64" choke, 1,828 psi; Perfs: 11,189-17,568, length: 6,379 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: ENGLISH, S, A-189

Two Recent Louisiana Completions

Below are two Louisiana completions reported by the Shreveport Times ahead of the DNR.  I will update the spreadsheet and maps on Thursday with additional information.

  • Mosely 5-15-9 H #1, QEP Resouces: 11.435 MMcf/day IP on 16/64 in. choke at 8,580 psi; Perfs: 12,780-17,096, length: 4,316 ft.; Alabama Bend Field, Bienville Parish, S5/T15/R9; res. A, serial #241198
  • Small Fry et al 33 H #1, Petrohawk Operating: 7.638 MMcf/day IP on 14/64 in. choke at 8,474 psi; Perfs: 12,325-16,890, length: 4,565 ft.; Thorn Lake Field, Caddo Parish, S28/T15/R11; res. A, serial #242066

LA Lease Auction: Average Haynesville Area Bonus $8,297

The Louisiana Mineral Board held its monthly lease sale at the end of last week.  While the big news coming out of the sale was that the state cleared $11.5 million, the vast majority of the properties receiving bids were in south Louisiana and are more targeted for oil. The state released minerals under the Rockefeller Wildlife Refuge and the Loggy Bayou Wildlife Management Area.  Interestingly, many of the tracts received no bids.

In the Haynesville area of north Louisiana, only five parcels were out for bid and only two in DeSoto Parish received bids, and each only received one bid.  The average bonus was $8,297, but weighted by size of the parcel, the average bonus came in at $8,711.

Friday, March 11, 2011

Haynesville Rig Count Unchanged at 147

The weekly Haynesville Shale rig count was unchanged at 147, but the count decreased by three in east Texas to 39 and increased by three in north Louisiana to 108.



U.S. Rig Count: +8 to 1,715

The weekly Baker Hughes count of working rigs in the U.S. increased by eight to 1,715.  Oil rigs were up by 26 to 827, gas rigs were down 17 to 882 and miscellaneous rigs were down one to six.  By type, horizontal rigs were up 11, vertical rigs were up six and directional rigs were down nine.

In the Haynesville Shale region, inclusive of other formations, the rig count dropped by four to 165.  The count increased by two in north Louisiana to 114 and decreased by six in east Texas to 51.  The east Texas count is as low as it has been since December 4, 2009.

Thursday, March 10, 2011

New Louisiana Completions

  • Benbow 4-15-11 H #1, Chesapeake Operating: 17.112 MMcf/day IP on 22/64 in. choke at 7,157 psi; Perfs: 11,960-15,865, length: 3,905 ft.; Elm Grove Field, Bossier Parish, S4/T15/R11; res. A, serial #241629
  • Red River 4 #2-ALT, EOG Resources: 3.72 MMcf/day IP on 12/64 in. choke at 6,815 psi; Perfs: 12,022-16,406, length: 4,384 ft.; Ten Mile Bayou Field, DeSoto Parish, S9/T11/R12; res. A, serial #241084
  • Red River 4 #3-ALT, EOG Resources: 4.248 MMcf/day IP on 12/64 in. choke at 7,353 psi; Perfs: 12,038-16,227, length: 4,189 ft.; Ten Mile Bayou Field, DeSoto Parish, S9/T11/R12; res. A, serial #241085

EIA: Storage -71 Bcf to 1.645 Tcf

The weekly EIA working gas in storage report showed a 71 Bcf net withdrawal, bringing the current storage level to 1.645 Tcf.  The weekly withdrawal was 37% lower than the same week last year (-112 Bcf) and 34% lower than the five year average (-107 Bcf).  The current storage level is 32 Bcf higher than last year and 21 Bcf higher than the five year average.


Temperatures for the week averaged 40.0 degrees, which is about average and on par with last year's weather. But there was significant variation, with warmer temperatures across the south and southeast and cooler temps in the upper midwest and west.

Wednesday, March 9, 2011

Texas Permit Activity

For February 28 to March 8, 2011:

  • Walker SU G #1H, EXCO Operating; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: WALKER, J, A-57
  • Briggs Unit #1H, EOG Resources; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: RUSSELL, RB, A-234
  • BSI/USFS Unit F9 #1H, Encana; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: SP RR CO, A-265

Lots (17) of New Texas Completions

For February 28 to March 7, 2011:
  • W.R. Tutt #5, Valence Operating: 1.124 MMcf/day IP, 16/64" choke, 2,215 psi; Perfs: 10,521-12,108, length: 1,587 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: WATSON, W, A-748
  • Vera Black #10H, XTO Energy: 6.446 MMcf/day IP, 18/64" choke, 4,490 psi; Perfs: 10,769-15,883, length: 5,114 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: HAMMER, LT, A-335
  • PEC Minerals Gas Unit No. 1 #2H, XTO Energy: 9.603 MMcf/day IP, 19/64" choke, 3,865 psi; Perfs: 10,931-17,399, length: 6,468 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: PEARCE, S, A-525

Friday, March 4, 2011

Texas Oil Rumor: Update

Since I posted an educated guess on a well that hit a nice patch of oil in the Smackover horizon below the Haynesville Shale in Harrison Co. a couple of days ago, I've gotten some correspondence that generally reinforces my speculation.  There are other plausible rumors about Smackover oil in other locations of Texas and Louisiana (already suggested by Jefferies) that I'll hold back on publishing without more evidence.  The geology is challenging, but supposedly there are tangible results.

The post has also sparked some interesting discussion behind the scenes about leasing practices by certain companies that shall go unnamed (but you know who you are).  Also, one reader has heard that BP is trying hard to keep a lid on the rumors about the Nancy Brewster Gas Unit #8 (where it has apparently taken over operations).  What a hoot - BP trying to keep a lid on something!

In all, there is much intrigue that likely will be revealing itself soon.  Stay tuned and feel free to pass on any rumors, substantiated or not.  I can be reached at haynesvilleplay (at) gmail.com.

Haynesville Shale Rig Count: -1 to 147

With BHI taking last week off from updating the Haynesville region, there were lots of movements in the Haynesville Shale rig count, which dropped one rig to 147.  Louisiana lost three rigs to end at 105, while Texas gained two rigs to end at 42. Spreadsheet and maps have been updated.



U.S. Rig Count: +8 to 1,707

The weekly Baker Hughes rig count showed an eight rig increase, bringing the number of working rigs in the U.S. to 1,707.  Oil rigs were up 18 to 801, gas rigs were down seven to 899 and miscellaneous rigs were down three to seven.  By type, directional rigs were up 14 and vertical rigs were up five, while horizontal rigs were down 11.

In the Haynesville region, inclusive of other formations, the rig count dropped by two to 169.  East Texas was up one to 57, while north Louisiana was down three to 112.

Thursday, March 3, 2011

If it ain't one thing, it's another...

Gilda Radner used to say that as Roseanne Roseannadanna on Saturday Night Live.  For natural gas fans, it's our life for the past few years.  With good news comes bad.  The latest? The La Nina weather condition has yielded heavier than normal rainfalls this year in the Pacific Northwest.  This has created a strong supply of water behind dams in the region, meaning that more power than usual will be generated by hydropower in the Northwest, displacing up to 1.5 Bcf per day of natural gas for the period from January to June 2011.  From the article linked above:
"The Bonneville Power Administration, a Portland, Oregon- based government agency that sells power for federally owned hydroelectric plants in the Northwest, is preparing to market hydropower at “very low rates, or for free” to encourage coal and gas-powered plants to reduce output..."
Damn that carbon-free renewable power!  As if natural gas needed more weight to depress its price.

Enduro Operating

In reading the list of new Louisiana completions below, you will come upon a new name to the list, Enduro Operating, LLC.  The parent company, Enduro Resource Partners, was formed last year in Fort Worth by a group of former senior managers at Encore Acquisition Co., which was acquired by Denbury Resources last year.  Enduro is backed by a $200 million investment by private equity company Riverstone Holdings.

New Louisiana Completions

  • Sandford 21-16-14 H #1, Chesapeake Operating: 14.688 MMcf/day IP on 22/64 in. choke at 6,757 psi; Perfs: 11,672-16,159, length: 4,487 ft.; Caspiana Field, Caddo Parish, S16/T16/R14; res. A, serial #241331
  • Querbes 20 #2, Enduro Operating: 7.5 MMcf/day IP on 24/64 in. choke at 3,500 psi; Perfs: 11,610-15,580, length: 3,970 ft.; Greenwood-Waskom Field, Caddo Parish, S20/T16/R16; res. A, serial #240684
  • Querbes 20 #3, Enduro Operating: 8 MMcf/day IP on 24/64 in. choke at 3,800 psi; Perfs: 11,700-15,885, length: 4,185 ft.; Greenwood-Waskom Field, Caddo Parish, S20/T16/R16; res. A, serial #241134

EIA: Storage -85 Bcf to 1.745 Tcf

The weekly EIA working gas in storage report showed an 85 Bcf net withdrawal, bringing the total gas in storage to 1.745 Tcf.  For the second consecutive week, the weekly withdrawal was a fair bit lower than last year (-124 Bcf) and the five year average (-131 Bcf).  The current storage level is nearly the same as last year and the five year average.

Wednesday, March 2, 2011

The Oil Rumor

Indulge me, if you will.  Lyrics from the song "Walkin' Home Alone:"
News travels fast in a small desert town
So it wasn't long at all before the word got around
That a killin' mad car was headed their way
So the sheriff and the boys were gonna stop him
Out on the highway
I've always wanted to quote Stan Ridgeway (late of Wall of Voodoo, for those who care) and his dark tale of blindly believing a fast-spreading rumor.  I like to think of myself as above spreading rumors.  That said, however, one of the hottest rumors in east Texas has been that of a big oil find below the Haynesville Shale.  I've written a bit about speculation regarding the prospects for oil in the Smackover formation in Louisiana and southern Arkansas, but I tend to attribute most oil rumors to hearsay and wishful thinking.  But lately I have come to believe that there is a kernel of truth in these rumors.  Geologically it might not make perfect sense, but more than a few industry folks are snooping around in east Texas (and north Louisiana) for signs of oil.  There's smoke...but is there fire?

Texas Permit Activity

The following new drill permits were filed in Texas between 2/21 and 2/28/11 in the Haynesville Shale:
  • Glass Onion GU #1H, Samson Lone Star; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: YBARBO, JI, A-60
  • Ward SU #1H, Exco Operating; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: WARD, M, A-305
  • Magellan #1H, SM Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: QUIRK, E, A-35
  • LaSalle #1H, SM Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: QUIRK, E, A-35
  • Weeks SU #1H, Exco Operating; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: DAVIS, AM, A-99
  • Danube #1H, XTO Energy; Carthage Field (Haynesville Shale), Shelby Co. Co., Survey: SMITH, J, A-632

Last Week's Rig Count

It seems as though Baker Hughes didn't have any new data to report for the Haynesville Shale region last week. Seems unlikely, especially since they re-posted two week old data, but I'm at the mercy of the data provider I've been using for the past year.  Moving on...I'll update the rig count as if it is unchanged, but please check back this Friday to see (hopefully) some current updates.  Better luck next time, I guess.

Tuesday, March 1, 2011

Lots of Texas Completions

[permit activity will be posted Wednesday]
Completions:
  • Verhalen "B" #7H , GMX Resources: 5.254 MMcf/day IP, 15/64" choke, 4,411 psi; Perfs: 11,100-16,117, length: 5,017 ft.; North Carthage Field (Bossier Shale), Harrison Co., Survey: POE, A, A-19
  • Verhalen "A" #5H, GMX Resources: 6.489 MMcf/day IP, 24/64" choke, 5,504 psi; Perfs: 11,310-17,422, length: 6,112 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: POE, A, A-19
  • Blocker Ware #23H, GMX Resources: 5.79 MMcf/day IP, 20/64" choke, 5,081 psi; Perfs: 11,101-15,938, length: 4,837 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: WILLIAMS, W, A-757
  • Blocker Heirs #21H, GMX Resources: 5.433 MMcf/day IP, 21/64" choke, 5,420 psi; Perfs: 11,005-16,457, length: 5,452 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: USSURY, M S , A-722