Friday, July 29, 2011

Haynesville Shale Rig Count: +2 to 122

The weekly Haynesville Shale rig count showed a two rig increase, bringing the total number of rigs to 122.  The spreadsheet and map are posted.



U.S. Rig Count: -8 to 1,908

The weekly Baker Hughes U.S. rig count decreased by eight rigs this week to 1,908.  Gas rigs were down 12 to 877, while oil rigs were up four to 1,025 and miscellaneous rigs held at six.  By type, horizontal rigs were down 22 to 1,080, while vertical rigs were up 12 to 582 and directional rigs were up two to 246.

In the Haynesville Shale region, inclusive of other formations, the rig count was unchanged, with north Louisiana holding at 91 and east Texas holding at 50.

The detailed Haynesville Shale rig count should be available either late today or early tomorrow.

Thursday, July 28, 2011

Southwestern Goes Public on Smackover Brown Dense

In its quarterly earnings call today, Southwestern Energy announced that it has spent $150 million leasing 460,000 acres in southern Arkansas and northern Louisiana prospective for the Lower Smackover Brown Dense formation.  The land is prospective for oil (!!!) and gas.  Most of the oil appears to be in Arkansas, but the gas portion of the field expands eastward to Monroe, LA.


The formation varies in thickness from 300 to 500 feet and is found at depths between 8,000 and 11,000 feet.  It is of the Upper Jurassic age (close to the Haynesville Shale) and is a source rock for a number of formations across the Gulf Coast.  Southwestern plans to drill its first well in Columbia Co., AR to a depth of 8,900 feet, with a lateral of 3,500 feet.  A second well is planned for Claiborne Parish, LA with a depth of 10,700 feet with a 6,000 foot lateral.  The company will drill another ten wells in 2012 with the goal of figuring out if the Lower Smackover is commercial.

Only One New Louisiana Completion This Week

  • Langford 23 H #1, Petrohawk Operating: 7.97 MMcf/day IP on 14/64 in. choke at 7,829 psi; Perfs: 11,884-16,472, length: 4,588 ft.; Elm Grove Field, Bossier Parish, S26/T16/R11; res. A, serial #242007

Coal's Share of Electricity Production Drops in Q1

The EIA reported yesterday that coal's share of electricity production in the U.S. in the first quarter of 2011 dropped to its lowest point in 30 years.  Coal power decreased by 5.7% year-over-year even though total power production increased by 1%.  Coal's share of power production was 46%, which is three percentage points lower than last year and six points lower than 2008.



EIA: Storage +43 Bcf to 2.714 Tcf

The weekly EIA working gas in storage report showed a 43 Bcf net injection, bringing the total gas in storage in the U.S. to 2.714 Tcf.  The weekly injection was 39% higher than last year (+31 Bcf) but 12% below the five year average (+49 Bcf).  The current storage level is 6.9%, or 201 Bcf, lower than last year and 2.3%, or 65 Bcf, lower than the five year average.


Temperatures last week averaged 78.9 degrees, which was 3.1 degrees warmer than normal, but 0.4 degrees cooler than last year.

Tuesday, July 26, 2011

New Texas Permits

7/19/11 - 7/26/11:

  • CGU 8 #52HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: LONGACRE, UJ, A-403
  • CGU 8 #53HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: LONGACRE, UJ, A-403

New Texas Completions

7/19/11 - 7/26/11:

  • Crenshaw Unit #11H, Devon Energy: 6.971 MMcf/day IP, 16/64" choke, 6,165 psi; Perfs: 10,962-16,103, length: 5,141 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: MITCHUSSON, E F, A-437
  • Blue #1H, Crimson Exploration: 8.466 MMcf/day IP, 14/64" choke, 9,020 psi; Perfs: 14,080-18,371, length: 4,291 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: CONICHE, S, A-9 (this was self-reported a couple of months ago by Crimson)

Saturday, July 23, 2011

Thursday, July 21, 2011

U.S. Rig Count: +11 to 1,916

The weekly Baker Hughes rig count showed an 11 rig increase in the U.S. to 1,916.  Oil rigs were up eight to 1,021 and gas rigs were up four to 889, while miscellaneous rigs were down one to six.  By type, horizontal rigs were up 16 to 1,102, vertical rigs were up four to 570 and directional rigs were down nine to 244.

In the Haynesville Shale region, inclusive of other formations, the rig count was down two to 141.  East Texas (50) and north Louisiana (91) lost one rig each.

More Impacts of Shale

One of the overarching messages of this web site is that shale gas will transform the North American energy market for a long time to come.  Part of that is obvious - you are seeing monster natural gas wells in Texas, Louisiana, Pennsylvania, etc. where there weren't any four years ago.  But it's the domino effect that is most interesting.  Two new tidbits of information:

New Louisiana Completions

  • J Smith 2-15-9 H #1, QEP Resouces: 11.961 MMcf/day IP on 20/64 in. choke at 7,925 psi; Perfs: 12,370-16,790, length: 4,420 ft.; Woodardville Field, Bienville Parish, S2/T15/R9; res. A, serial #241262
  • Kennedy 6-15-8 H #1, QEP Resouces: 6.994 MMcf/day IP on 20/64 in. choke at 6,850 psi; Perfs: 12,644-17,020, length: 4,376 ft.; Woodardville Field, Bienville Parish, S6/T15/R8; res. A, serial #241453
  • Davis 11-15-11 H #1, Chesapeake Operating: 14.16 MMcf/day IP on 22/64 in. choke at 6,760 psi; Perfs: 11,675-16,193, length: 4,518 ft.; Swan Lake Field, Bossier Parish, S11/T15/R11; res. A, serial #241751

EIA: Storage +60 Bcf to 2.671 Tcf

The weekly EIA working gas in storage report showed a 60 Bcf net injection, bringing the total natural gas in storage to 2.761 Tcf.  The weekly injection was sandwiched between last year's (+55 Bcf) and the five year average (+67 Bcf).  The current storage level is 7.4% below last year's level (2.884 Tcf) and 2.2% below the five year average (2.663 Tcf).


Temperatures last week averaged 77.1 degrees, which was 2.9 degrees warmer than normal.  Given all the talk of a heat wave this week, I am interested to see the impact to storage next week.

Tuesday, July 19, 2011

Only Three New Texas Permits This Week

7/11/11 - 7/19/11:

  • F.L. Hodge #7H, XTO Energy; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: HILL, T, A-288
  • CGU 8 #56HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: LONGACRE, UJ, A-403
  • Dnieper #1H, XTO Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: RITTER, E, A-584

New Texas Completions

7/11/11 - 7/19/11; In addition to the Jordan completion noted earlier:

  • Doyh-Mekh GU 1 #1H, Berry Oil: 10.611 MMcf/day IP, 17/64" choke, 5,900 psi; Perfs: 11,163-16,241, length: 5,078 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: CARROL, E, A-135
  • Gators DU #1H, XTO Energy: 6.743 MMcf/day IP, 15/64" choke, 6,643 psi; Perfs: 12,660-19,033, length: 6,373 ft.; Carthage Field (Haynesville Shale), Shelby Co., Survey: ODELL, HRS B, A-534

Jordan #3 Reports

For those following the deep oil rumors in east Texas, the Valence Operating Jordan #3 well (noted by GMX Resources in its investor materials as a possible deep oil target) officially reported its completion yesterday:
  • Jordan #3, Valence Operating: .777 MMcf/day IP, 20/64" choke, 635 psi; Perfs: 11,040-11,744, length: 704 ft.; Carthage Field (CV/Haynesville), Harrison Co., Survey: ANDERSON, B, A-29
Not very exciting.  No liquids reported.  Very much like the Nancy Brewster #8, which stirred many hearts in the region only to disappoint.  But that might not be the whole story.  The Jordan completion document stated that the permit will remain open to be commingled with Beckville (Cotton Valley).  Yesterday I got an eyewitness report of a workover rig at the Brewster #8 site for a follow-on completion.  I updated the spreadsheet and map to reflect the new data.

Sunday, July 17, 2011

Haynesville Shale Rig Count: -5 to 120

The weekly Haynesville Shale rig count was down by five to 120.  The Texas count held at 33, while the Louisiana count was down five to 87.  This week marked the first time in several years in which there were no Haynesville wells being drilled in Harrison Co. TX.



NYT Public Editor Examines Shale Articles

In his weekly Sunday column, the Public Editor of the New York Times, the paper's ombudsman, addressed criticism of the NYT's series of articles on shale gas three weeks ago, especially the piece that appeared on the front page of the Sunday paper on June 26.  In looking deeper at the article, he asked the writer and editors to take another look, especially in light of the fact that many oil and gas majors have become involved in shale.

In the end, the Public Editor's conclusion was that the article was flawed:
"My view is that such a pointed article needed more convincing substantiation, more space for a reasoned explanation of the other side and more clarity about its focus...(t)he article went out on a limb, lacked an in-depth dissenting view in the text and should have made clear that shale gas had boomed."

Oil Watch List Updated

In going through the weekly rig count, I updated the "Oil Watch List" that tracks wells that are related to the rumors of deep oil below the Haynesville formation to reflect a new well (Valence's Sterrett 23) and updates to the wells being drilled.

Friday, July 15, 2011

U.S. Rig Count: +18 to 1,905

The weekly Baker Hughes rig count showed an 18 rig increase in the U.S., bringing the total number of working rigs to 1,905.  Gas rigs were up12 to 885 and oil rigs were up six to 1,013, while miscellaneous rigs held at seven.  By type, horizontal rigs were up 13 to 1,086, directional rigs were up nine to 253 and vertical rigs were down four to 566.

In the Haynesville Shale region, inclusive of other formations, the rig count was down one to 143.  East Texas (51) added two rigs while north Louisiana (92) shed three.

I'm on the road today, so I'll post the detailed Haynesville Shale count over the weekend.

25 New EXCO Completions

There were 44 new completions this week in Louisiana, but there were a whole bunch (25) for EXCO Resources in DeSoto Parish, so I broke them out separately.  The other ones are in a post that will follow shortly.

  • Wheless et al 5 #7-ALT, EXCO Operating: 16.214 MMcf/day IP on 20/64 in. choke at 7,810 psi; Perfs: 12,315-15,590, length: 3,275 ft.; Caspiana Field, DeSoto Parish, S5/T14/R12; res. A, serial #241782
  • Nabors 18 #2-ALT, EXCO Operating: 13.634 MMcf/day IP on 20/64 in. choke at 6,865 psi; Perfs: 12,368-16,929, length: 4,561 ft.; Caspiana Field, DeSoto Parish, S7/T14/R12; res. A, serial #242290

19 New (Non-EXCO) Louisiana Completions

And the rest...

  • NPLLC 17-12-13 H #1, Chesapeake Operating: 13.267 MMcf/day IP on 22/64 in. choke at 6,890 psi; Perfs: 12,349-16,498, length: 4,149 ft.; Trenton Field, DeSoto Parish, S17/T12/R13; res. A, serial #242241
  • Norris 1-13-13 H #1, Chesapeake Operating: 18.192 MMcf/day IP on 22/64 in. choke at 7,990 psi; Perfs: 12,325-16,535, length: 4,210 ft.; Red River-Bull Bayou Field, DeSoto Parish, S1/T13/R13; res. C, serial #241995
  • BSMC LA 21 HZ #1, Comstock Oil & Gas: 9.11 MMcf/day IP on 16/64 in. choke at 7,357 psi; Perfs: 11,923-16,312, length: 4,389 ft.; Benson Field, DeSoto Parish, S16/T10/R14; res. A, serial #242415

Thursday, July 14, 2011

Petrohawk to be Sold to BHP Billiton

In a news release dated tomorrow (7/15 - I guess it's already tomorrow in Australia), BHP Billiton announced that the company has entered into a definitive agreement to acquire Petrohawk Energy.  The total value of the deal is $15.1 billion (about $12.1 for equity and the assumption of $3 billion in debt). The deal is an all cash offer for $38.75 per share.  Petrohawk's shares closed today at $23.49, so that implies a 65% premium.  Not bad.  The cash tender offer would begin July 25 and the company's board recommends shareholders to take the offer.  BHP expects the deal to close in Q3 2011.

This is the deal I've been expecting for the past several years.  It has always seemed to me that HK has been waiting for the right suitor to come along.  The question was always who would buy it and when.  Honestly, I'm surprised it took so long.

New Mid-Bossier Completion

I've been working on the new Louisiana completions - all 44 of them (mostly EXCO) - and noticed a Mid-Bossier Shale completion:
  • Black Stone 4 #4-ALT, EOG Resources: 4.398 MMcf/day IP on 13/64 in. choke at 7,617 psi; Perfs: 11,814-15,850, length: 4,036 ft.; Ten Mile Bayou Field, DeSoto Parish, S4/T11/R12; res. A/Mid-Bos, serial #240960
The Mid-Bossier map and spreadsheet have been updated.

EIA: Storage +84 Bcf to 2.611 Tcf

The weekly EIA working gas in storage report showed an 84 Bcf net injection, bringing the total gas in storage to 2.611 Tcf.  The injection was 8% above last year (+78 Bcf) and 5% below the five year average (+88 Bcf).  The current storage level is 7.7% lower than last year (-218 Bcf) and 2.0% lower than the five year average (-52 Bcf).


Temperatures last week averaged 77.1 degrees, 2.9 degrees warmer than normal and 2.3 degrees warmer than last year.

Tuesday, July 12, 2011

New Texas Permits

7/5/11 - 7/11/11:

  • Richards GU SBN #1H, Chesapeake Operating; Carthage Field (Haynesville Shale), Sabine Co. Co., Survey: HORTON, J, A-114
  • West Ingram GU SBN #1H, Chesapeake Operating; Carthage Field (Haynesville Shale), Sabine Co. Co., Survey: HORTON, J, A-114
  • Sooners DU #1H, XTO Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: GRAY, A, A-640

Chesapeake Puts its Money Where its (Big) Mouth Is

You can call Chesapeake Energy a lot of things, but timid is not one of them.  More than any other company, Chesapeake has been out front over the past several years trumpeting the virtues of natural gas.  Now the company has really put its money where its prodigious mouth is with the formation of Chesapeake NG Ventures Corp., which plans to invest $1 billion over the next ten years in companies that promote consumption of natural gas. The strategy has the not unambitious goal of helping "break OPEC's 38-year stranglehold on the U.S. economy and to lower energy costs to American consumers, enhance national security, stimulate economic growth, create hundreds of thousands of high-paying jobs and improve the environment."

Yesterday, the venture announced an investment of $150 million in Clean Energy Fuels Corp to fund the development of 150 natural gas fueling stations at strategically located Pilot/Flying J truck stops.  (Clean Energy's largest shareholder is T. Boone Pickens, of The Pickens Plan fame.)  It also committed to invest $155 million for a 50% interest in Sundrop Fuels Inc., a company that makes gasoline and diesel fuel from plant materials and natural gas and expects to break ground soon on its first biofuels plant.

While the tangible impact of these investments won't be felt for a few years, there is some psychic benefit today for everyone in the natural gas industry.  As usual, Chesapeake leads the parade.

New Texas Completions

7/5/11 - 7/11/11:
(Check out the pressure on the Nelson Hay well: 11,477 psi!)
  • George Robertson #3, Valence Operating: 1.109 MMcf/day IP, 20/64" choke, 995 psi; Perfs: 11,104-11,816, length: 712 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: ANDERSON, B , A-29
  • H. Nelson Hay #1H, Goodrich Petroleum: 12.386 MMcf/day IP, 14/64" choke, 11,477 psi; Perfs: 14,983-19,844, length: 4,861 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: MEDFORD, J R , A-406
  • Phillips SU #1H, EXCO Operating: 13.346 MMcf/day IP, 22/64" choke, 6,939 psi; Perfs: 14,223-19,247, length: 5,024 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: WARD, M, A-305

Friday, July 8, 2011

Will NYT Reexamine Gas Articles?

One of my favorite columns in the Sunday New York Times is that of the Public Editor.  He serves as the paper's ombudsman and in that role casts a critical eye on the work of the Times.  After the paper's series "Drilling Down" a couple of weeks ago that was harshly critical of the natural gas industry, the Times has been taking its share of abuse.  Now there is an interesting letter making the rounds from watchdog group the National Legal and Policy Center asking the Public Editor to examine the series for author Ian Urbina's use of deceptive journalistic techniques.

While I'm sure it's not the first time this right-leaning organization has been critical of the Times, I hope the Public Editor takes this request seriously.  The letter points out a number of inappropriately used journalistic techniques that intentionally mislead the reader.  The heavy dependence on shale critic Arthur Berman as both a cited source and anonymous source is deceptive.  The credentials of the Dallas Federal Reserve advisory committee member were greatly exaggerated (as were her possible motives) and many of the "insiders" anonymously criticizing shale are not directly involved with shale gas.

Haynesville Shale Rig Count: +4 to 125

The Haynesville Shale reversed weeks of declining rig counts this week with four new working rigs, bringing the total number of rigs in the play to 125.  Texas saw three new rigs, bringing its count to 33, while Louisiana saw a one rig increase, bringing its total to 92.  This week's increase in net rigs was the first since April 22.



U.S. Rig Count: +1 to 1,887

The weekly Baker Hughes rig count showed a one rig increase, bringing the total working rigs in the U.S. to 1,887.  There was very little "net action" this week, as oil rigs increased by one to 1,007, gas rigs decreased by one to 873 and miscellaneous rigs increased by one to seven.  By type, directional rigs were up one to 244 while horizontal and vertical rigs held at 1,073 and 570, respectively.

In the Haynesville Shale region, inclusive of other formations, the rig count was up by two to 144.  The north Louisiana count increased by one to 95, while east Texas increased by one to 49.

Look for the detailed Haynesville Shale rig count later this afternoon.

Thursday, July 7, 2011

GM Thinks Beyond Volt

It was reported yesterday that General Motors has signed an agreement Westport Innovations, Inc. to develop a compressed natural gas engine suitable for passenger cars.  The resulting vehicles likely would be hybrids with both CNG and regular gas tanks.  Any resulting GM product would be several years from market.

Right now, the Honda Civic is the only CNG passenger car on the market, but if the NAT GAS Act legislation passes Congress this year, we might be looking at more CNG fueling stations in the coming years, which would enable the CNG passenger car market.  GM has been out front in electric vehicles with its Volt, but this deal shows that the company is taking a "portfolio approach" to the various fuels, which is a smart move in a rapidly changing energy landscape.  Even if no GM vehicle results, the partnership would at least continue to push the ball farther down the field.

EIA: Storage +95 Bcf to 2.527 Tcf

The weekly EIA working gas in storage report showed a 95 Bcf net injection, bringing the storage level to 2.527 Tcf.  The weekly injection was 25% higher than last year (+76 Bcf) and 19% higher than the five year average (+80 Bcf).  For the past several weeks the current injection has outpaced historical trends, so the current level versus past levels has creeped up slowly.  This week, the current storage level is 8.1% below than last year (2.751 Tcf) and 1.9% below the five year average (2.575 Tcf).


Temperatures last week averaged 73.1 degrees, 0.1 degrees cooler than normal and 2.4 degrees cooler than last year.

Wednesday, July 6, 2011

A Couple of Louisiana Completions

An absolute binge of completions reported last week, but only two this week:

  • G+B Mgmt Trust 32 H #1, Petrohawk Operating: 5.903 MMcf/day IP on 14/64 in. choke at 5,901 psi; Perfs: 11,395-16,059, length: 4,664 ft.; Greenwood-Waskom Field, Caddo Parish, S5/T17/R16; res. A, serial #242313
  • Jones 17 #2-ALT, EXCO Operating: 13.013 MMcf/day IP on 20/64 in. choke at ? psi; Perfs: 12,348-16,438, length: 4,090 ft.; Caspiana Field, DeSoto Parish, S17/T14/R12; res. A, serial #241816

Tuesday, July 5, 2011

New Texas Permits

6/28/11 - 7/4/11:

  • Walker SU B #1H, Exco Operating; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: WALKER, J, A-57
  • Walker SU C #1H, Exco Operating; Carthage Field (Haynesville Shale), Nacogdoches Co. Co., Survey: WALKER, J, A-57
  • EE Neal GU 1 #2H, Samson Lone Star; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: TUTTLE, D JR, A-662

New Texas Completions

6/28/11 - 7/4/11:

  • Key Deep GU #1H, NFR Energy: 6.017 MMcf/day IP, 20/64" choke, 5,240 psi; Perfs: 11,238-14,954, length: 3,716 ft.; Carthage Field (Haynesville Shale), Harrison Co., Survey: FIELDS, I N , A-260
  • Michelle GU #1H, Samson Lone Star: .989 MMcf/day IP, 14/64" choke, 1,200 psi; Perfs: 13,067-15,514, length: 2,447 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: YBARBO, J I , A-60

Friday, July 1, 2011

33 New Louisiana Completions

  • Parks 11-15-9 H #1, QEP Resouces: 13.582 MMcf/day IP on 18/64 in. choke at 8,250 psi; Perfs: 12,465-17,025, length: 4,560 ft.; Woodardville Field, Bienville Parish, S11/T15/R9; res. A, serial #241248
  • Sustainable For 22 H #1, Petrohawk Operating: 6.752 MMcf/day IP on 14/64 in. choke at 7,542 psi; Perfs: 11,511-16,055, length: 4,544 ft.; Lake Bisteneau Field, Bienville Parish, S27/T16/R10; res. A, serial #241642
  • Bolton 26 H #1, Petrohawk Operating: 6.545 MMcf/day IP on 14/64 in. choke at 7,973 psi; Perfs: 12,125-16,685, length: 4,560 ft.; Elm Grove Field, Bossier Parish, S35/T16/R11; res. A, serial #242008

Haynesville Shale Rig Count: -2 to 121

The weekly Haynesville Shale rig count continued to drop this week, shedding two to 121.  The count was down by one rig in both Louisiana (91) and Texas (30).



U.S. Rig Count: +4 to 1,886

The weekly Baker Hughes rig count showed a four rig increase, bringing the total number of working rigs in the U.S. to 1,886.  The number of oil rigs increased by three to 1,008 and gas rigs increased by one to 874, while miscellaneous rigs held at six.  By type, directional rigs were up seven to 243 and vertical rigs were up five to 570, while horizontal rigs were down eight to 1,073.

In the Haynesville Shale region, inclusive of other formations, the rig count decreased by three rigs to 142.  North Louisiana rigs were down three to 94 while east Texas rigs held at 48.