Haynesville – update through April 2023

This interactive presentation contains the latest gas (and a little oil) production data, from all 7,062 horizontal wells in the Haynesville that started producing from 2007, through April this year.

Total production

Natural gas production in the Haynesville fell to just over 13 Bcf/d in April, from 15 Bcf/d just 2 months earlier. This was the steepest drop in production in the history of the basin.

In the first 4 months of this year, 150 horizontal wells were completed, vs. 181 in the same time frame last year.

Drilling activity

This decline was of course caused by collapsing natural gas prices; where end of last year 74 rigs were drilling in the basin, when natural gas prices were above $6 per Mcf, prices have fallen by 2/3rds to just $2 per Mcf. As of last week, only 49 rigs were active in the basin (according to Baker Hughes):

Well productivity

Although well productivity appears to have stagnated, new wells are still producing a massive amount of natural gas, peaking at 18 MMcf/d, on average:

As can be seen in this chart, these ultra high initial production rates are followed by a steeper decline than seen in other basins, giving operators a very strong incentive to reduce drilling and completing wells in a low price environment. Wells that began production in the last few years are on track to recover between 10 and 13 Bcf of natural gas over their live time, on average.

Production by county

Natural gas production has fallen in all areas, but less so in the core of the basin, on a percentage basis:

De Soto Parish was in April, at 3.5 Bcf/d, good for more than 25% of the total volume produced in the basin, and delivers now 80% more than the next best parish, Caddo (1.95 Bcf/d).

Top operators

Basically, all major operators have drastically reduced output so far this year:

Aethon Energy stands out with a fall of 1 Bcf/d in total output since December, or 40% in just 4 months.

As the following chart shows, its well results lack those of the other major operators:

You will find in the chart above that the 293 horizontal wells that were completed since 2017 that Aethon Energy operates have recovered 3.7 Bcf of natural gas in the first year on production, versus 5.4 Bcf/d for the 5,385 horizontal wells that Southwestern Energy currently operates.

Finally

Production data is subject to revisions.

Sources

For this presentation, I used data gathered from the following sources:

• The Louisiana Department of Natural Resources
• Texas RRC. Production data is provided on lease level. Individual well production data is estimated from a range of data sources, including regular well tests, and pending lease reports.

====BRIEF MANUAL====

The above presentations have many interactive features:

• You can click through the blocks on the top to see the slides.
• Each slide has filters that can be set, e.g. to select individual or groups of operators. You can first click “all” to deselect all items.
• You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.
• Tooltips are shown by just hovering the mouse over parts of the presentation.
• You can move the map around, and zoom in/out.
• By clicking on the legend you can highlight selected items.
• Note that filters have to be set for each tab separately.
• The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in a past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.
• If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.

Key Takeaways

• Haynesville natural gas production fell to just over 13 Bcf/d in April from 15 Bcf/d two months earlier.
• The April drop was the steepest production decline in Haynesville basin history.
• 150 horizontal wells were completed in the first four months of 2023 versus 181 in the same period of 2022.
• Baker Hughes data showed the Haynesville rig count fell to 49 last week from 74 at end-2022.
• Natural gas prices fell from above $6 per Mcf at end-2022 to about $2 per Mcf as of the report.
• New Haynesville wells averaged 18 MMcf/d peak gas rates, followed by steeper declines than other basins.
• Recent-vintage wells are on track to average 10–13 Bcf of lifetime natural gas recovered.
• De Soto Parish produced 3.5 Bcf/d in April, more than 25% of basin output and 80% more than Caddo at 1.95 Bcf/d.
• Aethon Energy reduced total output by 1 Bcf/d since December, a 40% decline in four months.
• Aethon’s 293 operated wells completed since 2017 averaged 3.7 Bcf recovered in year one versus 5.4 Bcf for Southwestern Energy’s 5,385 operated wells.