Haynesville- Beats Barnett in production!! Metrics run high at ~$15,000/acre.

A short note on Haynesville Shale- which beat Barnett in production!!

A recent report by the US Energy Information Administration on US gas production said the Haynesville is now producing at least 5.5 Bcf/d and overtook the Barnett Shale's production of 5.3 Bcf/d. The production from the Haynesville shale increased from 0.4 Bcf in 2007 to 410.9 Bcf in 2009. The production from the play is expected to increase to 2,328.4 Bcf in 2020 at an average annual growth rate of 15.8%. Some industry experts believe the Haynesville shale could ultimately produce as much as 30 to 40 trillion cubic feet of natural gas.

Haynesville Vs Barnett- Haynesville to be the winner??

Haynesville’s rig count has increased 11% over the past year to 168 rigs as against the Barnett’s 31% decline to 53 rigs. The drilling pace in Haynesville is ramping up due to the Barnett having many matured producing wells versus the Haynesville just speeding up the production since 2007 when the first well was hit by Chesapeake. Another reason for continued drilling in the Haynesville Shale in 2011 despite weak natural gas prices is the existence of some independent companies like BG, ExxonMobil and EXCO. These independents, in 2010, gave a new outlook to Haynesville Shale lifting the metrics to ~15,000/acre.

Source: Global Oil and Gas M&A Review

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Haynesville runs @ high metrics of ~15,000/acre
The Haynesville's average 2010 metrics of ~$15,000/acre had increased 67% from the average 2009 metrics of $9,000/acre. The Haynesville metrics is the highest of all the other unconventional gas plays! Observing the growth in Haynesville Shale play, it might become a replica of Barnett.

Here is the snapshot of a Haynesville package up for sale.

Source: Derrick Petroleum E&P Transactions Database

Bakken is booming with 5x growth increasing resources to 20 billion barrels!!! Production to account for 15% of US output by 2015.

“The Bakken formation in North Dakota and Montana holds about 20 billion barrels of recoverable crude, or about five times the amount previously estimated by federal geologists” said Harold Hamm, chairman and chief executive officer of Continental Resources Inc. The formation also holds 4 BBOE of gas, he said.

Increased rig count!

According to the North Dakota Industrial Commission, approximately 173 rigs are currently drilling in the North Dakota Bakken and Three Forks play, against the Eagle Ford rig count of 154. Bakken/Three Forks is forecasted to account for 15% of US output by 2015, analysts from Raymond James estimated.

Source: Pioneer Natural Resources- Mar 2011 PPT

Continental to spend 73% of 2011 capex on Bakken shale!

Continental Resources is the largest leaseholder in the Bakken shale formation, with more than 864,000 acres in North Dakota and Montana. The company, which has been drilling in North Dakota for 22 years, was among the first to tap a Bakken well in 2004 using horizontal drilling technology. The company was the first to drill a horizontal well in Three Forks formation in 2008. Continental Resources plans to invest $955 million (73% of 2011 capex) in drilling operations in the Bakken and Three Forks this year, adding about 120 wells to the 257 currently producing, the company said.

Source: Sandridge- Simmons 11th Annual Energy Conference Mar 2011

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A new milestone for Bakken Metrics!!

The affinity towards Bakken does not stop only with the largest Bakken leaseholder, but also continues with the large independents like Oxy, Hess, Williams, Pioneer Natural Resources, Sandridge, etc., The last quarter of 2010 had set a new milestone for Bakken acreage metrics, during when Oxy ($7,700/acre), Hess ($6,200/acre) and Williams ($10,700/acre) added Bakken acreage to their asset portfolio. Earlier to this, the Bakken metrics were in the range of $2,000-$4,000/acre.

Updated estimates on the recoverable reserves, increased rig count and a new milestone for the metrics. Bakken Shale is booming!!

Source: Global Oil and Gas M&A 2010 Review