And the Winner Is... The Haynesville

In recent weeks there has been some discussion and debate regarding which basin in the U.S. is producing the largest amount of natural gas. Prior to the meteoric rise of drilling in the Haynesville Shale, the clear leader in natural gas production was unquestionably the Barnett Shale. The Barnett, situated in North Texas, took the leading spot in 2008 when its production surpassed the San Juan Basin.

As of February 2011, Haynesville is the new leader. According to the EIA, Haynesville ramped to produce 5.5 Bcf/d versus the Barnett's 5.25 Bcf/d. However, Lippman Consulting, another expert in the energy sector, questions their interpretation of the data as Lippman's analysis pegs the Barnett at 5.5 Bcf/d versus 5.0 Bcf/d in the Haynesville.

Regardless of who is winning the production race currently, the trends definitely favor Haynesville overtaking Barnett soon, if it has not already done so. Natural gas production has been trending lower at Barnett since last November. Conversely, both production and rig count continue to rise in the Haynesville, even with the depressed natural gas prices we have seen over the past year.

As can be seen in the chart at the beginning of this article, the rig count in the Haynesville has grown 11% over the past year to 168 rigs operating in the region. This contrasts significantly with the Barnett that has seen its rig count decline 31% to 53 rigs over the same time period. What keeps the production race close is the fact that the Barnett has many more wells producing due to its maturity versus the Haynesville, which saw its first well punched in 2007 by Chesapeake.

The monthly progressions in producing wells and total wells permitted both continue to trend higher in the Louisiana portion of the Haynesville. Considering there are more than 500 wells that have been drilled in the Haynesville currently awaiting completion, the parabolic growth in producing wells will promote even greater production from the region in the months ahead.

Louisiana Haynesville - Shale Well Counts

Of the sixteen major parishes and counties that cover the Haynesville, half of the drilling is currently occurring in three counties: De Soto (54 rigs), Sabine (20 rigs), and Red River (15 rigs). Other counties and parishes with active rigs are: Bienville (8 rigs), Bossier (9 rigs), Caddo (14 rigs), Harrison (7 rigs), Nacogdoches (12 rigs), Panola (6 rigs), Rusk (4 rigs), San Augustine (14 rigs), and Shelby (9 rigs).

Chesapeake is the largest natural gas producer in the Haynesville at 0.65 bcfe/d, which approximates 13% of all production for the region. Chesapeake has drilled over 500 wells across the 500,000+ net acres it controls. According to Smith Bits STATS data, Chesapeake continues to be the most active driller in the Haynesville with 35 active rigs.

The five largest drilling fleets in the Haynesville control 68% of the market and all but one are publicly-traded. Nabors Drilling tops the list with 39 active rigs followed by Trinidad Drilling (26), Patterson-UTI (21), Nomac (16), and Helmerich & Payne (13). Nomac, which is not publicly-traded, is a subsidiary of Chesapeake.


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