The Haynesville Shale may eventually become the world's largest producing gas field, Aubrey McClendon, CEO of Chesapeake Energy and a pioneer of the play in east Texas and northwest Louisiana, said Wednesday.
Chesapeake expects the play, which only became widely known when the company began talking about it last March, will produce at least 500 Tcf over time and then recover around 700 Tcf before potentially growing even larger, McClendon said during a presentation to the annual Cambridge Energy Research Associates conference in Houston.
"We think in time it will become the largest gas field in the world at 1.5 quadrillion cubic feet," he added.
Haynesville will become the largest US gas field by 2020, he added.
Meanwhile, the Barnett Shale play in north Texas, which sparked the shale craze earlier this decade, now produces 4.5 to 5 Bcf/d, and "is largely responsible for the current oversupply of natural gas" in the US, said the CEO. However, Chesapeake does not believe production will peak at more than 7 Bcf/d.
"If the current 100 rigs there -- half what it was six months ago -- holds, this field won't ever produce more than about 6 Bcf/d," he said.
Last week, Chesapeake peer EOG Resources said it expected the Haynesville to peak in the first quarter at 5 Bcf/d.
In addition, McClendon projected that a declining rig count could cause a 7% to 8%, and possibly even as much as 10%, decline in US natural gas production.
"You could see as much as a 10 Bcf/d swing in gas output year over year," McClendon said. US gas production currently hovers about 60 Bcf/d.
However, oilfield service costs should be down this year about 20%, and that, on top of the fall in rig count, should also spur recovery in the rig count, he said.
"The seeds of recovery in gas prices are being sown today and we think 2010 and 2011 should be a much better environment," said the CEO.
He also said he believes the US gas rig count, which peaked at about 1,500 rigs last September, needs to go down about 60% to create the much-sought price rebound. It is currently at 1,104 rigs.
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