Saturday, December 27, 2014

EIA: Gas in Storage -49 Bcf to 3.246 Tcf

The EIA reported this week that working gas in storage was down 49 Bcf to 3.246 Tcf.  The weekly withdrawal was only a quarter of last year's (-193 Bcf) and 64% below the five year average (-138 Bcf).  The market reacted strongly to these numbers, as the price of gas dropped precipitously during the week, with the Henry Hub spot price finishing at $2.74/MMBtu.

The current storage level is now 4.8% above last year (3.096 Tcf, a difference of 150 Bcf) and 4.9% below the five year average (3.415 Tcf, a difference of 169 Bcf).  Given another disappointing storage report like this one and the difference between the current and average will be wiped out, erasing a 60 percentage point difference from back in April.


Friday, December 19, 2014

U.S. Rig Count: -18 to 1,875

The Baker Hughes U.S. rig count was down 18 this week (45 for the past two weeks) to 1,875.  Oil rigs were down ten to 1,536, gas rigs were down eight to 338 and miscellaneous rigs were unchanged at one.  By type, horizontal rigs were down 11 to 1,356, vertical rigs were down six to 324 and directional rigs were down one to 195.  Among gas rigs, horizontal rigs were down six to 255, directional rigs were down two to 56 and vertical rigs were unchanged at 27.

Man Bites Dog: Comstock Moving Two Rigs From Eagle Ford to Haynesville!

I don't think I've ever typed these words, but a company is moving rigs from the Eagle Ford Shale to the Haynesville.  Comstock Resources announced this week that it is halting exploration in the Tuscaloosa Marine Shale and the Eagle Ford and is restarting ops in the Haynesville in early 2015.  Comstock will drop its sole rig in the Tuscaloosa, drop two rigs in the Eagle Ford and move two of the Eagle Ford rigs to north Louisiana.

Quoting the press release:
"Comstock believes that improved completion technology, including longer laterals, will provide strong returns on drilling projects at current natural gas prices. 

Forest and Sabine Close "Merger"

I "quotationalizeify" the word merger in the title because, as we've previously noted, it's more a case of Sabine Oil and Gas buying Forest Oil and assuming its public listing.  In any case, the deal closed yesterday, but complications arose when Forest got delisted by the NYSE.  Unfortunately, the deal couldn't close before the slide in the oil and gas market got the better of Forest's stock.  While the terms of the deal didn't seem to change a whole lot, they had to arrange some new financing.  The stock currently is trading on the OTC Bulletin Board with the expectation that things will change and it will meet the NYSE listing requirements, but right now you can get two shares for less than the cost of a first class stamp.

Thursday, December 18, 2014

J-W Buys Some Petrohawk Cotton Valley Action

A few weeks ago, BHP Billiton/Petrohawk sold J-W Operating its interest in acreage in the Cotton Valley formation in North Louisiana.  The sale covered "approximately 1,200 wellbores and associated gathering lines and compressor facilities" in the Elm Grove and Caspiana fields.  This likely is good news for the owners of these properties, as J-W will be a lot more attentive to these wells than BHP, which seems more interested in landing big fish than dealing with the small potatoes of existing CV wells.

EIA: Storage -64 Bcf to 3.295 Tcf; The Streams Finally Cross

The EIA reported this morning that working gas in storage was down 64 Bcf to 3.295 Tcf.  The weekly withdrawal was 75% lower than last year (-256 Bcf) and 59% below the five year average (-157 Bcf).  The current storage level is now 6 Bcf above last year (3.289), but is still 7.3% below the five year average (3.553 Tcf, a difference of 258 Bcf).



Cuomo Finally Decides to Ban Fracking in NY

The administration of New York governor Andrew Cuomo announced yesterday that the state's temporary moratorium on hydraulic fracturing implemented in 2008 would become permanent.  This decision makes the Marcellus Shale that underlies New York inaccessible to exploration and production.

The state Department of Environmental Conservation issued its legally binding recommendation based on the recommendation of the state's acting state health commissioner, a medical doctor.  The decision was made on the grounds that the health impacts of fracking are unknown, but in reality, it was a calculated political decision by Cuomo who has been conspicuously absent from the debate.

Tuesday, December 16, 2014

Encana: Hayneswhat?

Encana released its 2015 capital budget this week, much to the chagrin of all those Haynesville Encana landowners.  The company is so liquids-focused that it doesn't even label its gas plays on the map in its corporate presentation.  It instead generally refers to its natural gas leaseholds as "Natural gas optionality."


Haynesville Shale Rig Count Unchanged at 23

Last week's Haynesville Shale rig count was unchanged at 23.  Louisiana was down one (EXCO) to 15, while Texas was up one (XTO) to eight.


Monday, December 15, 2014

How's That Oily, Liquidy Thing Working Out for Ya?

In my best Sarah Palin voice, I've got to ask, "how's that oily, liquidy thing working out for ya?"  Not to dance on anyone's grave, but the plummeting price of oil has got to have executives of the independent formerly-natural-gas-now-oil-and-liquids companies banging their heads into a wall.  It's like 2012 in the natural gas market all over again.  They spent billions of dollars to forcibly shift into liquids and now the price oil makes those expensive acquisitions uneconomic.

For the past several years, I've mocked the wholesale shift away from natural gas as a case of the tail (stock analysts) wagging the dog, not because I foresaw the price of oil dropping 40% in four months.  I was more concerned with the lemming effect of gas guys piling into liquids, arriving late and paying too much.

Venture Global LNG Proposes Facility in Cameron

Venture Global LNG announced last week that it plans to invest $4.25 billion in an LNG export terminal at the Calcasieu Ship Channel in Cameron Parish, LA to export up to 10 million tonnes of liquefied natural gas abroad.  The company is planning for a 2016 construction start with operations beginning in 2019, pending approval of all its permits.

The linked article is written as if the project is a fait accompli, but the company only has DOE approval to export to any country with a free trade agreement with the U.S., which is the most basic approval.  To be viable, the terminal needs approval from FERC to build the infrastructure (not that hard to achieve) and from the DOE to export to non-free trade countries (much harder to get).  If all pending applications to the DOE are approved, it would be one of three export sites in Cameron Parish.

Friday, December 12, 2014

U.S. Rig Count: -27 to 1,893

The Baker Hughes U.S. rig count was down 27 this week to 1,893.  Oil rigs were down 29 to 1,546, gas rigs were up two to 346 and miscellaneous rigs were unchanged at one.  By type, horizontal rigs were down one to 1,367, vertical rigs were down 24 to 330 and directional rigs were down two to 196.  Among gas rigs, horizontal rigs were up five to 261, directional rigs were down one to 58 and those unloved vertical rigs were down two to 27.

EIA: Gas in Storage -51 Bcf to 3.359 Tcf

The EIA reported yesterday that working gas in storage was down 51 Bcf to 3.359 Tcf.  The withdrawal was 45% smaller than last year (-92 Bcf) and 29% smaller than the five year average (-72 Bcf).  The current storage level is now 5.2% below last year (3.545 Tcf, a difference of 186 Bcf) and 9.5% below the five year average (3.71 Tcf, a difference of 72 Bcf).


Monday, December 8, 2014

Haynesville Shale Rig Count: +1 to 23

The Haynesville Shale rig count was up one last week to 23.  Louisiana held at 16, while Texas was up one (XTO).


Saturday, December 6, 2014

U.S. Rig Count: +3 to 1,920

The Baker Hughes U.S. rig count was up three this week to 1,920.  Oil rigs were up three to 1,575, gas and miscellaneous rigs were unchanged at 344 and one, respectively.  By type, horizontal rigs were down three to 1,368, vertical rigs were up two to 354 and directional rigs were up four to 198. Among gas rigs, horizontal rigs were up one to 256, directional rigs were up one to 59 and vertical rigs were down two to 29.

Thursday, December 4, 2014

EIA: Gas in Storage -22 Bcf to 3.41 Tcf

What a difference a week makes!  After a huge withdrawal the previous week, the EIA reported this morning that last week's working gas in storage was down only 22 Bcf to 3.41 Tcf.  The withdrawal was 84% lower than last year (-141 Bcf) and 56% below the five year average (-50 Bcf).  The current storage level is now 6.2% below last year (3.637 Tcf, a difference of 227 Bcf) and 9.8% below the five year average (3.782 Tcf).


Monday, December 1, 2014

Haynesville Shale Rig Count Unchanged at 22

The Haynesville Shale rig count held at 22 last week, with Louisiana unchanged at 16 and Texas holding at six.


Wednesday, November 26, 2014

U.S. Rig Count: -12 to 1,917

The Baker Hughes U.S. rig count was down 12 rigs this week to 1,917.  Oil rigs were down two to 1,572, gas rigs were down 11 to 344 and miscellaneous rigs were up one to one.  By type, horizontal rigs were down one to 1,371, vertical rigs were unchanged at 352 and directional rigs were down 11 to 194.

EIA: Gas in Storage -162 Bcf to 3.432 Tcf

The unseasonably cold weather last week led to a massive storage withdrawal, as the EIA reported this morning that working gas in storage was down 162 Bcf to 3.432 Tcf.  By comparison, this week last year saw a 17 Bcf withdrawal, and the five year average was only down 6 Bcf.  The current storage level is now 9.2% below last week (3.778 Tcf, a difference of 346 Bcf) and 10.4% below the five year average (3.832 Tcf, a difference of 400 Bcf).

Monday, November 24, 2014

Haynesville Shale Rig Count Unchanged at 22

The Haynesville Shale rig count was unchanged at 22.  Louisiana was down one to 16, while Texas was up one to six.  Anadarko moved a rig from LA to TX and added another one in TX, while XTO dropped one.  Also, I've been doing a better job of keeping the rig map current, and you can compare current rig locations against those from the past three weeks and - just for fun or agony - against the peak rig count from July 2010.


Friday, November 21, 2014

U.S. Rig Count: +1 to 1,929

Baker Hughes (how much longer will we be able to say that?) reported today that its U.S. rig count was up one to 1,929.  Oil rigs were down four to 1,574 and gas rigs were up five to 355.  By type, horizontal rigs were up three to 1,372, vertical rigs were down two to 352 and directional rigs were unchanged at 205.  Among gas rigs, horizontal rigs were up three to 264, directional rigs were up one to 60 and vertical rigs were up one to 31.

New Texas Permits

10/20/14 - 11/20/14:
  • Soape, A.C. Gas Unit Allocation #17H, BP America; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: OWEN, J, A-522 
  • Amazon #1H, XTO Energy; Carthage Field (Haynesville Shale), Shelby Co. Co., Survey: HOLMES, S, A-287 

Thursday, November 20, 2014

New Texas Completions

10/20/14 - 11/19/14:
  • York SU #2HB, EXCO Operating: 9.539 MMcf/day IP, 15/64" choke, 9,438 psi; Perfs: 13,206-18,146, length: 4,940 ft.; Carthage Field (Haynesville Shale), San Augustine Co., Survey: WOOD, C , A-310 
  • Redhawks (SL) DU #B1SL, XTO Energy: 10.407 MMcf/day IP, 19/64" choke, 7,165 psi; Perfs: 12,520-19,135, length: 6,615 ft.; Carthage Field (Haynesville Shale), Shelby Co., Survey: HARRISON, J, A-306 

EIA: Gas in Storage -17 Bcf to 3.594

So long to the injection season:  net storage withrawals from storage have begun.  The EIA announced this morning that working gas in storage was down 17 Bcf to 3.594 Tcf.  The weekly withdrawal was half of last year's (-36 Bcf) but 7 Bcf higher than the five year average (-10 Bcf).  The current storage level is now 5.3% below last year (3.795 Tcf, a difference of 201 Bcf) and 6.4% below the five year average (3.838 Tcf, a difference of 244 Bcf).


Tuesday, November 18, 2014

A Couple of New Louisiana Completions

  • Brown 17 #5, Petrohawk Operating: 8.976 MMcf/day IP on 16/64 in. choke at 7,018 psi; Perfs: 11,393-15,847, length: 4,454 ft.; Elm Grove Field, Bossier Parish, S17/T16/R11; res. A, serial #247799 
  • QP 3+10-12-12 HC #1, Chesapeake Operating: 8.821 MMcf/day IP on 20/64 in. choke at 7,415 psi; Perfs: 12,156-17,149, length: 4,993 ft.; Red River-Bull Bayou Field, DeSoto Parish, S34/T13/R12; res. A, serial #248044

Haynesville Shale Rig Count Unchanged at 22

Last week's Haynesville Shale rig count was unchanged at 22.  Louisiana held at 17, while Texas held at five.


Friday, November 14, 2014

U.S. Rig Count: +3 to 1,928

The Baker Hughes (how long will we be able to say that if Halliburton buys BHI???) U.S. rig count was up three this week to 1,928.  Oil rigs were up 10 to 1,578, gas rigs were down six to 350 and miscellaneous rigs were down one to zero.  By type, horizontal rigs were up seven to 1,369, vertical rigs were down six to 354 and directional rigs were up two to 205.  Among gas rigs, horizontal rigs were down two to 261, directional rigs were down five to 59 and vertical rigs were up one to 30.

EIA: Gas in Storage +40 Bcf to 3.611 Tcf

It's hard to believe, sitting here bundled up with my wool socks on, that working gas in storage is still going up, but I'm reminded that I was wearing shorts last week and that's the time period for this week's EIA's weekly report.  This morning's report showed a 40 Bcf increase to 3.611 Tcf.  The weekly injection was 82% greater than last year (+22 Bcf) and 2.5 times greater than the five year average (+16 Bcf).  The current storage level is now 5.7% below last year (3.831 Tcf, a difference of 220 Bcf) and 6.2% below the five year average (3.848 Tcf, a difference of 237 Bcf).


Tuesday, November 11, 2014

Haynesville Shale Rig Count: -2 to 22

The Haynesville Shale rig count was down again this week, dropping two to 22.  Louisiana was down two (J-W moved its last Haynesville rig to Cotton Valley, and EXCO), while Texas was unchanged at five.


Friday, November 7, 2014

U.S. Rig Count: -4 to 1,925

The Baker Hughes U.S. rig count was down by four this week to 1,925.  Oil rigs were down 14 to 1,568, gas rigs were up 10 to 356 and miscellaneous rigs held at one.  Over the past two weeks, gas rigs have jumped by 24.  By type, horizontal rigs were up nine to 1,362, vertical rigs were down five to 360 and directional rigs were down eight to 203.

Matador Updates South Caddo Progress

In its third quarter earnings report, Matador Resources devoted a fair amount of ink to update drilling and production on property it has leased in the southern part of Caddo Parish.  Chesapeake is the operator of the wells, but Matador has a significant ownership percentage.  I've excerpted the text from Matador's update, but the highlights are as follows:  1) CHK has a plan to drill 45 wells in the Elm Grove field through 2016, 2) it is operating three rigs in this cause and 3) as of November 5 nine of the wells are producing and the completed wells are averaging 8 to 12 MMcf/day.  

Here is the full text:

Thursday, November 6, 2014

EIA: Gas in Storage +91 Bcf to 3.571 Tcf

Natural gas keeps roaring into storage, as evidenced by a 91 Bcf weekly injection, bringing the EIA working gas in storage to 3.571 Tcf.  The injection was 2.6 times greater than last year (+35 Bcf) and 2.2 times greater than the five year average (+42 Bcf).  The current storage level is now 6.2% below last year (3.809 Tcf, a difference of 238 Bcf) and 6.8% below the five year average (3.832 Tcf, a difference of 261 Bcf).


As the deviation between the current year and the five year average continues to narrow, the picture looks more and more like a mirror image of 2012 when gas in storage was way above average and narrowed towards the end of the year:

Tuesday, November 4, 2014

Haynesville Shale Rig Count: -1 to 24

The Haynesville Shale rig count was down one last week to 24.  Louisiana was down one to 19 (J-W Operating shifted one from Haynesville to Cotton Valley) whileTexas held at five.

Friday, October 31, 2014

U.S. Rig Count: +2 to 1,929 (But Gas Rigs +14)

The Baker Hughes U.S. rig count was up two this week to 1,929.  Oil rigs were down 13 to 1,582, gas rigs were up 14 to 346 (their highest level since February 7, 2014) and miscellaneous rigs were up one to one.  By type, horizontal rigs were down two to 1,353, vertical rigs were up four to 365 and directional rigs were unchanged at 211.  Among gas rigs, horizontal rigs were up 11 to 256, directional rigs were up four to 63 and vertical rigs were down one to 27.

Thursday, October 30, 2014

A Bunch of New Louisiana Completions

  • Roos #33, Petrohawk Operating: 7.252 MMcf/day IP on 16/64 in. choke at 5,690 psi; Perfs: 11,383-15,805, length: 4,422 ft.; Elm Grove Field, Bossier Parish, S17/T16/R11; res. A, serial #247797 
  • Brown 17 #7-ALT, Petrohawk Operating: 8.706 MMcf/day IP on 16/64 in. choke at 7,012 psi; Perfs: 11,168-15,628, length: 4,460 ft.; Elm Grove Field, Bossier Parish, S17/T16/R11; res. A, serial #248068 

EIA: Storage +87 Bcf to 3.48 Tcf

The EIA reported this morning that working gas in storage was up 87 Bcf last week to 3.48 Tcf.  The weekly injection was 93% greater than last year (+45 Bcf) and 47% above the five year average (+59 Bcf).  The current storage level is now 7.8% below last year (3.774 Tcf, a difference of 294 Bcf) and 8.2% below the five year average (3.79 Tcf, a difference of 310 Bcf).


Temperatures in the Lower 48 last week averaged 56.7 degrees, which was 2.6 degrees warmer than last year and 1.7 degrees warmer than average.

Wednesday, October 29, 2014

EXCO Provides Haynesville Operations Update

EXCO Resources reported quarterly earnings yesterday and provided an operational update for its Haynesville acreage.  The company is circling the wagons a bit, especially as natural gas prices are dropping.  It is still looking for a new CEO and has been shedding assets in an effort to pay down debt to maximize liquidity.  It has also lowered capital spending and is shifted focus away from the Marcellus Shale and instead concentrating on the Haynesville and Eagle Ford.


Tuesday, October 28, 2014

Rig Map Updated, Improved

I've been getting lazy about updating my Haynesville maps.  It's been a couple of years since updating the completions map (it's sort of unwieldy in Google Maps), but I have fewer excuses for not updating the rig count.  After being prodded (thank you, John), I updated the information and rebuilt the map on the newer Google Maps platform.  Now, when I update, I'll add new information by layers so you can see the progression over time (depending on when I get around to updating it...).  To be sadistic, I added one layer for July 30, 2010, which was the 168 rig peak for the Haynesville Shale.  You can see how things have changed over time:


BHP Looking to Sell Fayetteville Shale Assets (and a Dose of Cynicism)

Well, when I first read the headline in the Financial Times, it said "BHP puts gas asset up for sale as it finetunes US shale business" (good article but may require registration; here's another).  My first thought was that BHP was going to unload its Petrohawk assets, including the Haynesville.  Instead, BHP is looking to dump the Fayetteville Shale assets it bought from Chesapeake Energy in 2011 for $4.75 billion.  Seemed like a good idea at the time, at least for Chesapeake, but it hasn't worked out for BHP because natural gas prices have remained in the toilet since then.

The sale is part of a larger corporate strategy by BHP to focus on its Big Four commodities:  iron ore, petroleum, copper and coal.  It also wants to shift its oil and gas focus more towards liquids than gas (sound familiar?), which is pretty much all you would get from the Fayetteville.  Over the past decade, it became fashionable for the big mining conglomerates to cobble together as many different assets as possible to (unintentionally) become unmanageable behemoths.  Fashionable, meaning the companies' stock prices increased as Wall Street analysts fawned over them.

Monday, October 27, 2014

Haynesville Shale Rig Count: -1 to 25

The Haynesville Shale rig count was down one last week to 25.  Louisiana held at 20, while Texas lost one to end at five (Goodrich left Angelina Co.).


Friday, October 24, 2014

New Louisiana Completions

  • Lady Oak Farms 4-9 H #1, Petrohawk Operating: 9.442 MMcf/day IP on 16/64 in. choke at 8,036 psi; Perfs: 12,057-17,325, length: 5,268 ft.; Caspiana Field, Red River Parish, S4/T14/R12; res. A, serial #247435 
  • Lady Oak Farms 4-9 H #2, Petrohawk Operating: 9.517 MMcf/day IP on 16/64 in. choke at 8,224 psi; Perfs: 11,819-16,927, length: 5,108 ft.; Caspiana Field, Red River Parish, S4/T14/R12; res. A, serial #247436 

U.S. Rig Count: +9 to 1,927

The Baker Hughes U.S. rig count was up nine this week to 1,927.  Oil rigs were up five to 1,595 and gas rigs were up four to 332.  By type, horizontal rigs were up two to 1,355, vertical rigs were down one to 361 and directional rigs were up eight to 211.  Among gas rigs, horizontal rigs were down five to 245, directional rigs were up five to 59 and vertical rigs were up four to 28.

The Big Kahuna Helps Keep a Lid on NatGas Prices

The EIA has been updating a variation of the chart below showing production from the main gas shale plays for the past couple of years (I cleaned it up by consolidating it into the major plays):


It's pretty remarkable how much shale gas has been produced over the past half decade. But, as one can clearly see, growth over the past several years has been driven mainly by the Marcellus Shale (light blue in chart above).  Taking that same data and charting the twelve month trailing trends (i.e. 12 months of trailing data from November 2011 versus 12 months of trailing data from November 2010) shows the trend more clearly:


Thursday, October 23, 2014

EIA: Storage +94 Bcf to 3.393 Tcf

The EIA announced this morning that working gas in storage was up 94 Bcf to 3.393 Tcf.  The weekly injection was 9% above last year (+86 Bcf) and 34% greater than the five year average (+70 Bcf).  The current storage level is now 9.0% below last year (3.729, a difference of 336 Bcf) and 9.1% below the five year average (3.731 Tcf, a difference of 338 Bcf).


Wednesday, October 22, 2014

Recent Texas Completions

10/6/14 - 10/21/14:
  • Hill Heirs Deep Gas Unit #5H, XTO Energy: 4.962 MMcf/day IP, 16/64" choke, 4,087 psi; Perfs: 11,282-17,316, length: 6,034 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: MANN, W , A-431 
  • Brent Miller Unit A2 #2H, Encana: 15.971 MMcf/day IP, 20/64" choke, 9,575 psi; Perfs: 14,720-21,322, length: 6,602 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: CHIRINO, JA, A-17 

Tuesday, October 21, 2014

QEP Sells Midstream, But Keeps Haynesville Portion

Tesoro made a splash over the weekend when it announced the purchase of the midstream assets of QEP Resources (formerly Questar) by one of its subsidiaries for $2.5 billion in cash.  The sale of QEP Field Services included gathering, treatment and pipeline infrastructure, but QEP retained midstream assets associated with the Haynesville Shale region.


Monday, October 20, 2014

Haynesville Shale Rig Count Unchanged at 26

Last week's Haynesville Shale rig count was unchanged at 26.  Louisiana was down one (EXCO) to 20, while Texas was up one (BP!) to six.  This week marks the first time BP has drilled a Haynesville well since July 2012.  The company currently has three Haynesville permits in Texas with another one pending.


Recent Texas Permits (Including BP)

10/5/14 - 10/19/14:
  • CGU 29-31 #72HH, Anadarko E&P; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: MORRIS, J, A-446 
  • Coyotes DU #B 1SL, XTO Energy; Carthage Field (Haynesville Shale), San Augustine Co. Co., Survey: ANDERSON, G, A-47 

U.S. Rig Count: -12 to 1,918 (But Gas Rigs +8)

The Baker Hughes U.S. rig count was down 12 last week to 1,918.  Oil rigs were down 19 to 1,590, gas rigs were up eight to 328 and miscellaneous rigs were down one to zero.  By type, horizontal rigs were unchanged at 1,353, vertical rigs were down eight to 362 and directional rigs were down four to 203.  Among gas rigs, horizontal rigs were up nine to 250, directional rigs were down three to 54 and vertical rigs were up two to 24.

Thursday, October 16, 2014

EIA: Gas in Storage +94 Bcf to 3.299 Tcf

The EIA announced this morning that working gas in storage was up 94 Bcf to 3.299 Tcf.  The weekly injection was 19% higher than last year (+79 Bcf) and 21% above the five year average (+78 Bcf).  The current storage level is now 9.4% below last year (3.643 Tcf, a difference of 344 Bcf) and 9.9% below the five year average (3.661 Tcf, a difference of 362 Bcf).


Tuesday, October 14, 2014

Last Week's Louisiana Completions


  • LSU 31-6 HC #1, Petrohawk Operating: 7.711 MMcf/day IP on 16/64 in. choke at 6,839 psi; Perfs: 11,437-16,546, length: 5,109 ft.; Elm Grove Field, Bossier Parish, S31/T17/R12; res. A, serial #246177 
  • Gray Inv. 29-32 HC #1-ALT, Petrohawk Operating: 9.091 MMcf/day IP on 16/64 in. choke at 7,300 psi; Perfs: 11,542-16,763, length: 5,221 ft.; Elm Grove Field, Bossier Parish, S29/T17/R12; res. A, serial #247772 

Reflections on Windfall Tax Spending in DeSoto

Five years ago, the movie "Haynesville" came out and arrived at a theater near me.  One of my takeaways was the discussion of Norway's approach to the oil wealth "problem."  The country has maintained a very conservative approach to managing its energy windfall and created a trust fund that benefits the entire population of the country.

I was thinking about Norway when reading an article on the Environment and Energy web site reflecting on the spending of Haynesville tax revenues in DeSoto Parish and the communities within it, which racked up huge tax windfalls in tax revenues from the short-lived Haynesville Shale drilling boom of 2009-11.  Not exactly the Norway approach, and not everyone will approve of how funds were allocated, but most of the entities made some one-time purchases that would normally have been out of reach (but were not excessively extravagant) and focused on health, safety and education in their spending.  Others weren't quite as prudent.  Some entities even kept some money around for a rainy day, not exactly a Louisiana oil boom mentality.  Maybe some of us actually learned something from years of bouncing around in a recurring boom-bust energy cycle.

Haynesville Shale Rig Count Unchanged at 26

The Haynesville Shale rig count was unchanged at 26 last week.  Louisiana held at 21 and Texas was unchanged at five.  The only action of note was the movement of a Chesapeake rig from Caddo to Sabine Parish in Louisiana.


Endeavour International Declares Bankruptcy

Endeavour International Corporation, a Houston-based E&P company with an international focus, announced earlier this week that it had declared Chapter 11 bankruptcy.  Delays in a couple of major offshore projects in the North Sea put the company in a cash flow crisis that ultimately led to the filing.

Endeavour has a small presence in the Haynesville Shale.  It entered the play in 2010 through a transaction with Cohort Energy, a subsidiary of J-W Operating, to buy half of the company's Haynesville acreage, amounting to 7,250 net acres.  Endeavour maintains a working interest in this acreage and is not listed as an operator in the Haynesville.  The company will continue to operate, albeit with a different ownership structure.

Saturday, October 11, 2014

Another Big Plant Coming to Louisiana

Connecticut-based Castleton Commodities International announced this week that it plans to build a methanol plant in Plaquemines Parish, LA.  The site is downriver from New Orleans on the east bank of the river near Braithwaite.  The plant is expected to cost $1.2 billion and produce 5,000 metric tons of methanol per day and use natural gas as a feedstock.  While it is not specifically mentioned, the downriver location gives Castleton easy access to the Gulf of Mexico and international shipment, yet another way to export U.S. natural gas by turning it into a basic industrial product and bypassing the LNG route.

Friday, October 10, 2014

U.S. Rig Count: +8 to 1,930

The Baker Hughes U.S. rig count was up eight this week to 1,930.  Oil rigs were up 18 to 1,609, gas rigs were down ten to 320 and miscellaneous rigs were unchanged at one.  By type, horizontal rigs were up 12 to 1,353, vertical rigs were down two to 370 and directional rigs were down two to 207.  Among gas rigs, horizontal rigs were up one to 241, directional rigs were down three to 57 and vertical rigs were down eight to 22.

Thursday, October 9, 2014

Pink Drill Bits?

Every October I play a parlour game to guess what unusual new thing will get "pinked" for Breast Cancer Awareness Month.  Drill bits might be this year's winner.  Baker Hughes, in a promotion deal with the Susan G. Komen organization, is distributing pink drill bits this month.


After a few weeks of so much pink (especially during NFL games), I get a bit cynical and see it more as a bunch of marketing managers getting on board with a popular brand (and visa-versa).  Don't get me wrong, I am very appreciative of the funding and attention that Komen has brought to the treatment of breast cancer over the past couple of decades.  I feel especially hypocritical saying this because my family has been a direct benefactor of this progress.  But after a while, it feels that this one cause is sucking all the air out of the room when the world is full of other worthy causes that unfortunately don't have such a ready-made marketing angle.

EIA: Gas in Storage +105 Bcf to 3.205 Tcf

The EIA reported this morning that working gas in storage is up 105 Bcf to 3.205 Tcf.  The weekly injection was 15% above last year (+91 Bcf) and 25% higher than the five year average (+84 Bcf).  The current storage level is now 10.1% below last year (3.564 Tcf, a difference of 359 Bcf) and 10.5% below the five year average (3.583 Tcf, a difference of 378 Bcf).


Monday, October 6, 2014

New Texas Completions

9/4/14 - 10/5/14:
  • Brent Miller Unit A2 #2H, EXCO Operating: 15.971 MMcf/day IP, 20/64" choke, 9,574 psi; Perfs: 14,830-20,846, length: 6,016 ft.; Carthage Field (Haynesville Shale), Nacogdoches Co., Survey: CHIRINO, JA, A-17 
  • Hill Heirs Deep Gas Unit #7H, XTO Energy: 6.945 MMcf/day IP, 17/64" choke, 4,866 psi; Perfs: 10,917-16,372, length: 5,455 ft.; Carthage Field (Haynesville Shale), Panola Co., Survey: MANN, W , A-431 

Recent Texas Permits

9/4/14 - 10/5/14:
  • Womack #10H, XTO Energy; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: HARDING, SH, A-297 
  • Womack #11H, XTO Energy; Carthage Field (Haynesville Shale), Panola Co. Co., Survey: HARDING, SH, A-297 

Haynesville Shale Rig Count Unchanged Last Week at 26

The net Haynesville Shale rig count didn't budge, holding at 26.  Louisiana held at 21, while Texas was unchanged at five (Anadarko was up one, XTO down one).


Friday, October 3, 2014

U.S. Rig Count: -9 to 1,922

The U.S. rig count was down nine this week to 1,922.  Oil rigs were down one to 1,591, gas rigs were down eight to 330 and miscellaneous rigs held at one.  By type, horizontal rigs were down six to 1,341, vertical rigs were down one to 372 and directional rigs were down two to 209.  Among gas rigs, horizontal rigs were up one to 240, directional rigs were down two to 60 and vertical rigs were down seven to 30.

EIA: Storage +112 Bcf to 3.1 Tcf

Welcome to the shoulder season.  I'd like to call it the Goldilocks Season, when it's not too hot but not too cold, leading to large storage injections, but "Goldilocks" has been taken over by astronomers looking for earth-like planets elsewhere in space.  I guess I could expand the Goldilocks theme by calling it the Third Bowl of Porridge, but the name starts to drift from the meaning, so I'll stick with the boring old "shoulder."  Anyway, the EIA announced yesterday that working gas in storage was up 112 Bcf to an even 3.1 Tcf.  The weekly injection was 13% higher than last year (+99 Bcf) and 32% above the five year average (+85 Bcf).  The current storage level is now 10.7% below last year (3.473 Tcf, a difference of 373 Bcf) and 11.4% below the five year average (3.499 Tcf, a difference of 399 Bcf).


Wednesday, October 1, 2014

LNG Fueling Facility to Open in Baton Rouge

Waller Marine and Tenaska NG Fuels, LLC, a subsidiary of Omaha-based energy company Tenaska, announced they would open a facility in Baton Rouge to liquefy natural gas for sale to natural gas powered trucks and marine vessels.  The facility will be located on 80 acres at the Port of Baton Rouge near Interstate 10 and US 190 and will be the first of its kind in Louisiana.  The owners expect to produce 200,000 gallons of LNG per day, with the ability to expand if demand warrants.  Given the proximity of the facility to the Haynesville Shale, it is likely that the Haynesville will be a good source of gas for the project.

The marine industry has justifiably come under increased scrutiny for the pollution it causes, and increased use of natural gas would be a welcome substitute for burning low grade bunker fuel, which is only a few steps above liquid asphalt.  While the use of LNG (not to be confused with CNG, which fuels smaller vehicles) as transport fuel is in its infancy, it is a viable future market that will increase consumption of natural gas (although not significantly) and diversify its user base.

Last Week's Louisiana Completions

  • Legrand 35+2-15-12 HC #1-ALT, Chesapeake Operating: 14.784 MMcf/day IP on 20/64 in. choke at 7,035 psi; Perfs: 12,267-17,438, length: 5,171 ft.; Red River-Bull Bayou Field, DeSoto Parish, S35/T15/R12; res. B, serial #247654 
  • Legrand 35+2-15-12 HC #2-ALT, Chesapeake Operating: 13.488 MMcf/day IP on 20/64 in. choke at 7,325 psi; Perfs: 12,165-17,372, length: 5,207 ft.; Red River-Bull Bayou Field, DeSoto Parish, S35/T15/R12; res. B, serial #247655 

Monday, September 29, 2014

Haynesville Shale Rig Count: -2 to 26

This week's Haynesville Shale rig count was down by two to 26.  Louisiana held at 21, but Texas dropped by two (both Anadarko) to five.  This is the lowest Texas count since the very early days of the Haynesville Shale six years ago.


Friday, September 26, 2014

U.S. Rig Count Unchanged at 1,931

For the second straight week, the Baker Hughes U.S. rig count held at 1,931.  Oil rigs were down nine to 1,592, gas rigs were up nine to 338 and miscellaneous rigs were unchanged at one.  (Oddly, this is the exact same rig count from September 12.)  By type, horizontal rigs were up six, vertical rigs were down five and directional rigs were down one.  Among gas rigs, horizontal rigs were down two to 239, directional rigs were up three to 62 and vertical rigs were up eight to 37.

Thursday, September 25, 2014

EIA: Gas in Storage +97 Bcf to 2.988 Tcf

The EIA reported this morning that working gas in storage was up 97 Bcf to 2.988 Tcf.  The injection was 18% above last year (+82 Bcf) and 23% above the five year average (+79 Bcf).  The current storage level is now 11.4% below last year (3.374 Tcf, a difference of 386 Bcf) and 12.5% below the five year average (3.414 Tcf, a difference of 426 Bcf).

To date in 2014, storage has added 2.166 Tcf since it bottomed out in early April. By comparison, the total storage add in 2013 injection season was 2.161 Tcf from early April to mid-November.  The storage add in 2014 is at the 2013 level and there are +/-7 weeks left in the injection season.

Wednesday, September 24, 2014

Haynesville Shale Rig Count Unchanged at 28

Last week's Haynesville Shale rig count was unchanged at 28.  Louisiana held at 21, while Texas held at seven.


Friday, September 19, 2014

U.S. Rig Count: Unchanged at 1,931 (But Gas Rigs -9)

The Baker Hughes U.S. rig count was unchanged this week.  Oil rigs were up nine to 1,601, gas rigs were down nine to 329 and miscellaneous rigs were unchanged at one.  By type, horizontal rigs were down one to 1,341, vertical rigs were up six to 378 and directional rigs were down five to 212.  Among gas rigs, horizontal rigs were down five to 241, directional rigs were down five to 59 and vertical rigs were up one to 29.