• 2 hours LNG Glut To Continue Into 2020s, IEA Says
  • 4 hours Oil Nears $52 With Record OPEC Deal Compliance
  • 7 hours Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 9 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 10 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 4 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 5 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls

Breaking News:

LNG Glut To Continue Into 2020s, IEA Says

This Overlooked Shale Play Just Reported A Huge Rise In Output

Shale

The Americas continue to be the world’s top jurisdiction for oil and gas investment. With Chinese super-E&P Cnooc saying this past week it is seeking farm-in deals in newly-opened plays in the Gulf of Mexico. 

And in onshore shale, activity is just a frenetic. With new data showing a surprising surge in drilling for one play that few observers have been watching of late. 

The Haynesville shale of Arkansas, Louisiana and Texas. 

Unconventional drilling in this play has largely been overshadowed by higher-profile shales like the Permian, Eagle Ford and Marcellus/Utica the last few years. In fact, as the chart below shows, overall Haynesville natural gas production had been steadily falling since mid-2013 — up until the beginning of this year. 

(Click to enlarge)

Haynesville shale natural gas production had been falling the last few years — but has recently started to climb (source: Energy Information Administration)

But as you can see in the chart, 2017 has seen a reversal of those declines — with Haynesville production rising steadily so far this year. 

In fact, new data from Platts this week showed that overall Haynesville natgas output was up 35 percent in September — as compared to the same period of 2016. Marking a 4-year high for production.

Rig count numbers also show a resurgence in the Haynesville. With the play currently having 44 rigs deployed on drilling jobs — nearly equal to the 47 rigs at work right now in the much higher-profile Marcellus shale of the northeastern U.S. 

The question is, why? After all, U.S. natural gas prices are still languishing around $3/mcf — hardly the kind of environment where old natgas plays should be attractive.  Related: Is Artificial Intelligence The Next Step In Total's Tech Push?

Part of the answer is, the Haynesville appears to be delivering exceptional drilling results. As the chart below shows, this play has been delivering one of the highest rates of new production per drilling rig in America — handily beating the Permian and Eagle Ford, and second only to the Marcellus. 

(Click to enlarge)

Drilling productivity in the Haynesville has been beating other top shales (source: Energy Information Administration)

Sources have also cited another reason for the Haynesville renaissance: the proximity of the play to the Gulf Coast and Mexico. Where numerous new liquefied natural gas (LNG) export terminals are being built, along with pipelines for exports to Mexican markets. 

Drillers are reportedly betting that rising demand from both LNG and Mexican pipeline shipments will boost local prices. Watch to see if such a rise does indeed come — and for a continued rise in Haynesville activity if prices here firm up.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Jeffrey Brown on September 21 2017 said:
    Of course, production is still about 30% below the 2012 peak.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News