Bossier

Natural gas production volumes from the Haynesville Shale have raced up over the past 18 months or so, from about 5.3 Bcf/d in December 2016 to more than 8 Bcf/d now. In fact, volumes are now just 1 Bcf/d or so shy of the all-time peak of 9.5 Bcf/d in January 2012. Despite the gains, there’s been a cloud of skepticism hanging over the play’s longer-term growth prospects — most of the recent gains have come from a relatively small footprint in the play’s western Louisiana sweet spot, and many of the surrounding areas are fraught with geological challenges, such as high water and clay content. But now the Haynesville story is changing once again, with a shift in rigs to the Texas side. How does this shift affect Haynesville’s growth prospects? Today, we provide an update of our view of the Haynesville Shale.

After six years of output declines, Haynesville Shale natural gas production surged 25% in 2017, with the lion’s share of the increase coming in a remarkable second-half growth spurt. Preliminary 2018 guidance indicates that producers intend to keep the pedal to the metal, either sustaining or boosting the investment that has brought the play’s output to nearly 8 Bcf/d. Such increased activity indicates that producers have found new advantages in the region. But even though new drilling and completion techniques and producer strategies have significantly enhanced the economic viability of the dry gas Haynesville, it is much more highly dependent on natural gas prices than liquids-rich plays. Today, we continue our series on the rebounding Haynesville play with a look at RBN’s production forecast for the region.

After being left for dead for more than five years, natural gas production in the greater Haynesville region has been surging upward — from about 5.7 Bcf/d this time last year to more than 7 Bcf/d today, an increase of 25% during 2017. Much of this growth has been coming from a new cast of characters, employing different technologies and different strategies than the first wave of Haynesville pioneers that established the play back in 2008, then abandoned it in 2012. But a couple of big challenges face the Haynesville. Today, we begin an examination of the Haynesville that will take us from production trends through producer strategies and finally into detailed calculations of production economics for the play.