Not so long ago, the Haynesville shale of Louisiana and East Texas helped launch the shale revolution. Weak gas prices, and competition from the prolific Marcellus shale of Pennsylvania and West Virginia took their toll on the Haynesville. In fact, Haynesville production dropped to a 6 year low last March. Now, the very factors that led to the Haynesville’s demise are contributing to its revival.
Strong gas prices and pipeline and processing bottlenecks in the Marcellus are making the Haynesville attractive once again. As an established play the Haynesville is linked to the vast pipeline network giving it access to markets in the rest of the U. S. Also, it is in close proximity to LNG (liquefied natural gas) facilities on the Gulf Coast, which is a major advantage.
Exco Resources, Chesapeake Energy, and private equity are all committing capital to cut cost and stimulate production in the Haynesville. Chesapeake has experienced success with its use of massive amounts of sand in fracking the shale. Exco has used longer laterals and denser fracks to stimulate production as well. These innovations are paying off: production in the Haynesville is expected to climb for a seventh straight month in June. This would represent the highest level of production since the price collapse of 2014.
Exco’s CEO, Hal Hickey, observes that while the Marcellus has prolific reserves, the lack of pipelines and processing plants is “really restricting us at this point relative to our opportunities down in the South.”
To read the article in its entirety, please go to http://www.worldoil.com/news/2017/5/16/shale-play-left-for-dead-gets-some-love-as-us-gas-rises .
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