Wednesday, July 18, 2012

Where Have All The Cowboys Gone?

It's no secret that the rig count in the Haynesville Shale has dropped dramatically over the past two years.  The decline is especially acute in 2012.  In digging through approved Texas permits today, it became clear that unless there is some major shift in gas prices, Haynesville drilling in Texas for the foreseeable future will fall to Anadarko and XTO Energy.

Just looking at rig counts over the past six months (below), one can see that Anadarko has actually added rigs, while previously big players have nearly dropped off the map.  Anadarko's share of operating rigs has increased from 16% at year end 2011 to 54% as of last week.  EXCO Resources' rig count has gone from six to zero, EOG Resources has gone from six to one and Chesapeake Energy has gone from three to zero.

Approved drilling permits are a somewhat reliable forward indicator of activity, and looking at these for the past six months, Anadarko looks to continue its leadership on the above chart.  Since the beginning of the year, it has filed 46% of the issued permits in the Texas Haynesville.  Since April 1, its permits represent 57% of the total.  The only other company to increase its share of permits is Valence, which saw five of its six 2012 permits approved since 2012.

There are no clear answers here other than the fact that Anadarko is busy (but for how long?), Valence is getting busy (for its size) and most everyone else is sitting on the sideline waiting for higher gas prices.

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