Friday, September 30, 2011

Big Money Still Has Taste for US Shale

Carrizo Oil & Gas has been busy selling off portions of its shale gas lease interests this week.  First came a transaction with GAIL, India's national oil and gas company, to buy 20% of a portion of Carrizo's Eagle Ford acreage - about 20,200 net acres - for $95 million ($63.7 MM of cash plus $31.4 MM of drilling costs).

Today comes news that Carrizo has entered into a joint venture with Avista Capital Partners to develop acreage in the Utica Shale.  The deal calls for Carrizo to own 10% of the venture with an option to buy up to 50% of the venture.  While it is odd for the producer to own so little of the venture, is consistent with the fact that Carrizo is cash poor and opportunity rich.

Bottom line:  even with the anemic price of natural gas, shale gas deals are getting done and there still is big money out there trying to get in. After three years of crappy prices, natural gas still looks attractive to the "haves" of the energy world.  The question is, who will still be standing to enjoy it when things finally do turn around?

U.S. Rig Count: -1 to 1,990

The weekly Baker Hughes U.S. rig count showed a one rig decrease to 1,990.  Gas rigs were up 11 to 932, while oil rigs were down 11 to 1,060 and miscellaneous rigs were down one to seven.  By type, vertical rigs were up eight to 617, while horizontal rigs were down five to 1,135 and directional rigs were down four to 238.

The detailed Haynesville rig count should be available some time Sunday.

Thursday, September 29, 2011

EIA: Storage +111 Bcf to 3.312 Tcf

The weekly EIA working gas in storage report showed a big 111 Bcf net injection, bringing gas in storage to 3.312 Tcf.  The injection was 52% higher than last year (+73 Bcf) and 56% higher than the five year average (+71 Bcf). The current storage level is 91 Bcf below last year (3.403 Tcf) but 5 Bcf higher than the five year average.  This week marks the first time since mid-April 2011 that the current storage level has been higher than the five year average.


Temperatures last week averaged 64.9 degrees, which was 1.4 degrees cooler than last year and 4.0 degrees cooler than average.

Wednesday, September 28, 2011

New Texas Completions

9/22/11 - 9/28/11:

  • Jernigan Deep Gas Unit #1H, XTO Energy: 8.688 MMcf/day IP, 18/64" choke, 4,837 psi; Perfs: 11,312-15,791, length: 4,479 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: MANN, W , A-431
  • Fitzgerald SU #1H, EXCO Operating: 13.688 MMcf/day IP, 20/64" choke, 7,042 psi; Perfs: 14,160-18,002, length: 3,842 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: DAVIS, AM, A-99
  • Jeannine #1H, Chesapeake Operating: 15.319 MMcf/day IP, 22/64" choke, 7,758 psi; Perfs: 12,850-17,284, length: 4,434 ft.; Carthage Field (Haynesville Shale), Shelby Co., Survey: LOUT, A, A-427

Southwestern Receives Its First Deep Smackover Permit

Thanks to a reader who pointed out that Southwestern Energy yesterday received a permit to drill a deep Smackover well in Claiborne Parish (Garrett 7-23-5 H #1; Lick Creek Field; Sec 7/Township 23/Range 5; Reservoir: Lower Smackover Res. A; 20,200').

This is SWN's first permit for the Smackover in Louisiana since it announced that it had accumulated 460,000 acres prospective for the Brown Dense formation in Arkansas and Louisiana. Based on information from SWN, this might be the last such permit for the year as the company continues to explore the opportunity, and it will be watched closely.

Monday, September 26, 2011

Haynesville Shale Rig Count: -3 to 106

The weekly Haynesville Shale rig count was down by three rigs to 106.  The count was down one in Louisiana to 76 and down two in Texas to 30.


Saturday, September 24, 2011

U.S. Rig Count: +6 to 1,991

The weekly Baker Hughes rig count showed a six rig increase, bringing the total U.S. working rig count to 1,991.  Oil rigs were up nine to 1,071, gas rigs held at 912 and miscellaneous rigs were down three to eight.  By type, horizontal rigs were up three to 1,140, vertical rigs were up two to 609 and directional rigs were up one to 242.

In the Haynesville region, inclusive of other formations, the rig count was down one to 139, with a four rig decrease in north Louisiana to 82 and a three rig increase in east Texas to 57.

Thursday, September 22, 2011

U.K. Now on Shale Gas Map

Cuadrilla Resources has announced a major shale gas find in Lancashire estimated to contain 200 Tcf, with about 20% being recoverable.  The formation apparently is fairly narrow but very thick.  Various analysts estimate that production from the field once it gets going could allow Britain to cease importing foreign natural gas.

This is pretty big news, but it will be accompanied by the inevitable fearmongering from the anti-hydraulic fracturing folks.  It will be interesting to watch the debate play out in another country, especially one that is dependent on imports of foreign natural gas.  While this field will cause little more than a ripple (maybe a light wake) in the global supply/demand for natural gas, it will be a great case study to see how new natural gas supply impacts a market where natural gas prices are significantly higher.

EIA: Storage +89 Bcf to 3.201 Tcf

The weekly EIA working gas in storage report showed an 89 Bcf net injection, bringing the total working gas in storage to 3.201 Tcf.  The weekly injection was 14% higher than last year (+78 Bcf) and 24% higher than the five year average (+72 Bcf).  The current storage level is 129 Bcf lower than last year and 35 Bcf below the five year average.


Temperatures last week averaged 68.6 degrees, which was 1.1 degree warmer than last year and 1.0 degree warmer than normal.

Wednesday, September 21, 2011

Two Weeks of New Texas Permits

9/8/11 - 9/21/11:
  • ACLCO Hay GU #1H, Goodrich Petroleum; Carthage Field (Haynesville Shale), Angelina Co. Co., Survey: RICHARDSON, T, A-525 
  • Sarge Unit #1H, EOG Resources; Carthage Field (Haynesville Shale), Angelina Co. Co., Survey: ANDERSON, W, A-58 

A Couple of Texas Completions

9/17/11 - 9/21/11:

  • Watson SU #1H, EXCO Operating: 10.972 MMcf/day IP, 18/64" choke, 7,071 psi; Perfs: 13,594-18,673, length: 5,079 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: WATSON, HE, A-368 
  • Gomez SU A #2HB, EXCO Operating: 18.286 MMcf/day IP, 20/64" choke, 9,211 psi; Perfs: 14,738-18,964, length: 4,226 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: GOMEZ, J, A-227

A Few New LA Completions

  • Henigan 25 H #1, Petrohawk Operating: 7.395 MMcf/day IP on 14/64 in. choke at 7,752 psi; Perfs: 12,406-16,241, length: 3,835 ft.; Lake Bistineau Field, Bienville Parish, S36/T16/R9; res. A, serial #242108 
  • D R Green 34 H #1, XTO Energy: 11.311 MMcf/day IP on 17/64 in. choke at 6,647 psi; Perfs: 12,531-16,948, length: 4,417 ft.; Brushy Bayou Field, DeSoto Parish, S34/T11/R12; res. A, serial #242080 

Sunday, September 18, 2011

Haynesville Shale Rig Count: Unchanged at 109

The weekly Haynesville Shale rig count was unchanged from last week at 109.  The count was up three in Louisiana to 77 but down three in Texas to 32.

Friday, September 16, 2011

New Texas Completions

9/7/11 - 9/16/11:
  • Trainer Trust #1H, EOG Resources: 9.098 MMcf/day IP, 14/64" choke, 8,608 psi; Perfs: 15,361-19,081, length: 3,720 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: CHIRINO, J A, A-17 
  • Texans DU #1H, XTO Energy: 7.928 MMcf/day IP, 17/64" choke, 9,068 psi; Perfs: 14,120-18,383, length: 4,263 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: YBARBO, J I, A-60 

BHP Hits the Gas

It looks like BHP Billiton wasted little time in letting people know its intention for newly acquired Petrohawk.  Drill, baby, drill!  Petrohawk is applying for 18 alternate wells in Sections 26, 34 and 35 of T15/R11 in the Swan Lake Field overlapping Caddo and Bossier Parishes and five alternate wells in S28/T15/R11 in the Caspiana Field of Bossier Parish.

Looks like BHP and Petrohawk are setting up a gas factory to drive up BHP's production numbers.


U.S. Rig Count: +27 to 1,985

The weekly Baker Hughes rig count showed a 27 rig increase, bringing the working rig count to 1,985, the highest level since November 2008.  Of these, 1,062 (+5) were drilling for oil, 912 (+20) were drilling for gas and 11 (+2) were classified as miscellaneous.  By type, there were 1,137 (+3) horizontal rigs, 607 (+18) vertical rigs and 241 (+6) directional rigs.

The detailed Haynesville count should be available over the weekend.

Thursday, September 15, 2011

EIA: Storage +87 Bcf to 3.112 Tcf

The EIA reported this week that working gas in storage increased by 87 Bcf to 3.112 Tcf.  The net injection was 9% lower than last year (+96 Bcf) but 10% higher than the five year average (+79 Tcf).  The current storage level is 4.3% below last year (3.156 Tcf) and 1.6% below the five year average (3.085 Tcf).


Temperatures last week averaged 71.1 degrees, noticeably cooler than the previous week, back into the range of seasonal readings. The average temperature was 0.9 degrees warmer than normal and 0.1 degrees warmer than last year.

Wednesday, September 14, 2011

Two Weeks of Louisiana Completions

  • Holley 9-15-10 H #1, QEP Resouces: 10.12 MMcf/day IP on 16/64 in. choke at 8,100 psi; Perfs: 12,385-16,945, length: 4,560 ft.; Alabama Bend Field, Bienville Parish, S9/T15/R10; res. A, serial #242159
  • Rogers et al 10 H #1, Petrohawk Operating: 7.233 MMcf/day IP on 14/64 in. choke at 7,566 psi; Perfs: 13,206-17,830, length: 4,624 ft.; Lake Bistineau Field, Bienville Parish, S15/T16/R9; res. A, serial #241374
  • TW Rogers et al 27 H #1, Petrohawk Operating: 6.038 MMcf/day IP on 14/64 in. choke at 7,704 psi; Perfs: 12,078-16,711, length: 4,633 ft.; Lake Bistineau Field, Bienville Parish, S22/T16/R9; res. A, serial #242024

Gas-to-Liquids Plant Coming to LA?

Yesterday, Sasol, Ltd. of South Africa announced yesterday that it has chosen a site in southwest Louisiana near Westlake in Calcasieu Parish for a gas-to-liquids facility.  The facility has to go through an 18 month feasibility study stage before advancing, but the site selection process has concluded.  The facility would be the first GTL plant in the U.S. and would be located near a Sasol Ethylene Tetramerization unit that is also proposed for Calcasieu Parish.  (More info on GTL from Sasol)


The GTL process turns natural gas into diesel and jet fuel that can be used without engine modifications.  The big question is economics.  There are existing GTL plants in places like Qatar, but the most important economic variable is the low cost of natural gas. In a market economy like the U.S., it is unlikely that the company can lock in long-term gas prices, so the feasibility of the project remains to be seen.  I'd love to peek behind the curtain to see the economics.  What this announcement does say to me is that Sasol expects natural gas prices to remain low for quite a while.

In any case, this would be a big deal for Louisiana.  If deemed feasible, the projected cost of the facility would be between $8 and $10 billion with 850 permanent jobs and a peak of 5,000 construction jobs.  This is another opportunity for the state and region created by our wealth of natural gas from the shale.

Sunday, September 11, 2011

Haynesville Shale Rig Count: -8 to 109

The weekly Haynesville Shale rig count dropped by eight rigs to 109.  The count dropped by seven in Louisiana to 74 and by one in Texas to 35.



Friday, September 9, 2011

U.S. Rig Count: -10 to 1,958

The weekly Baker Hughes rig count showed a ten rig decrease, bringing the total number of working rigs to 1,958.  Of those, 1,057 were drilling for oil (-7), 892 were drilling for gas (-3) and nine were classified as miscellaneous (unchanged).  By type, 1,134 were horizontal (-2), 589 were vertical (-5) and 235 were directional (-3).

Thursday, September 8, 2011

EIA: Storage +64 Bcf to 3.025 Tcf

The weekly EIA working gas in storage report showed a 64 Bcf net injection, bringing the total gas in storage to 3.025 Tcf.  The weekly injection was in line with last year (+58 Bcf) and equal to the five year average (+64 Bcf).  The current storage level is 4.2% below last year (3.156 Tcf) and 1.9% below the five  year average (3.085 Tcf).


Last week's temperatures averaged 74.9 degrees, which was 0.9 degrees warmer than last year and 3.1 degrees warmer than normal.

Wednesday, September 7, 2011

New Texas Permits

8/31/11 - 9/7/11:

  • Cadenhead-Callison (Allocation) #2H, GMX Resources; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: WILLIAMS, W, A-757
  • Harris-Munden GU #16H, NFR Energy; Carthage Field (Haynesville Shale), Harrison Co. Co., Survey: LINDSEY, P, A-391
  • CGU 8 #57HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: WITHERSPOON, AM, A-732

New Texas Completions

8/31/11 -9/7/11:

  • S.W. Henderson Hay GU #1H, Goodrich Petroleum: 19.633 MMcf/day IP, 22/64" choke, 8,922 psi; Perfs: 14,982-19,046, length: 4,064 ft.; Carthage Field (Haynesville Shale), Angelina Co., Survey: WALKER, J, A-647
  • Trainer Trust #2H, EOG Resources: 8.579 MMcf/day IP, 14/64" choke, 9,492 psi; Perfs: 14,660-19,250, length: 4,590 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: CHIRINO, J A, A-17
  • Walker SU E #1H, EXCO Operating: 23.176 MMcf/day IP, 26/64" choke, 9,766 psi; Perfs: 15,673-19,574, length: 3,901 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: WALKER, J, A-57

Monday, September 5, 2011

Last Week's Louisiana Completions

  • Glasscock 33-16-11 H #1, Chesapeake Operating: 16.776 MMcf/day IP on 22/64 in. choke at 6,822 psi; Perfs: 11,562-16,020, length: 4,458 ft.; Elm Grove Field, Bossier Parish, S33/T16/R11; res. A, serial #242335
  • Lee 16-17-15 H #1, Chesapeake Operating: 11.664 MMcf/day IP on 22/64 in. choke at 5,565 psi; Perfs: 11,290-15,739, length: 4,449 ft.; Greenwood-Waskom Field, Caddo Parish, S21/T17/R15; res. A, serial #242372
  • Lee 21-17-15 H #1, Chesapeake Operating: 11.112 MMcf/day IP on 22/64 in. choke at 5,279 psi; Perfs: 11,329-15,195, length: 3,866 ft.; Greenwood-Waskom Field, Caddo Parish, S21/T17/R15; res. A, serial #242376

Sunday, September 4, 2011

Haynesville Shale Rig Count: +3 to 117

The Haynesville Shale rig count showed a three rig increase this week, bringing the number of working rigs to 117.  Texas was up two to 36, while Louisiana was up one to 81.



Friday, September 2, 2011

U.S. Rig Count: -7 to 1,968

The weekly Baker Hughes rig count showed a seven rig decrease to 1,968.  Oil rigs were down five to 1,069, gas rigs were down three to 895 and miscellaneous rigs were up one to nine.  By type, directional rigs were up ten to 238, while vertical rigs were down 13 to 594 and horizontal rigs were down four to 1,136.  Horizontal rigs still represent 57.7% of the working rigs, which is a record high.

In the Haynesville Shale region, inclusive of other formations, the rig count was up by four.  East Texas was up five to 54, while north Louisiana was down one to 83.

Thursday, September 1, 2011

EIA: Storage +55 Bcf to 2.961 Tcf

The weekly EIA working gas in storage report showed a 55 Bcf net injection, bringing the total gas in storage to 2.961 Tcf.  The injection was in line with last year (+52 Bcf) and the five year average (+60 Bcf).  The current storage level is 4.4% lower than last year (3.098 Tcf) and 2.0% lower than the five year average (3.021 Tcf).


Temperatures last week averaged 75.7 degrees, which was 2.4 degrees warmer than normal.