Cover Story Preview: East Texas Haynesville Shale
In 2008, the state of the global economy forced oil and gas executives to take a hard look at business models, balance sheets and asset portfolios. But in spite of its high drilling costs, a play that remains a key piece of business for many operators is the prolific Haynesville shale.
While the shales typically have gas-in-place, they are expensive to drill. This, coupled with steep well-decline rates, launched vigorous debates about the shale plays’ economics last year. Some analysts suggest the shales have to carry a hefty reserve requirement to truly be economic. Also, these plays require a lot of drilling to give operators running room to shorten their learning curve, a daunting challenge with Henry Hub gas prices still trending around $4 per MMBtu.
While newer shale plays sparked intense interest among the “shale-haves” in 2009, the Haynesville remains in the Top 5, post recession, thanks in part to impressive geological characteristics and stellar well results on the Louisiana side of the play. Convinced the East Texas portion also holds a wealth of potential, operators have been busy locking in acreage and refining their development approach—and they’re already seeing encouraging results.
In May, look for my East Texas Haynesville cover story in Oil and Gas Investor and on OilandGasInvestor.com to hear from operators, analysts and the midstream sector about how this side of the play has incredible potential—even in times of lower commodity prices!
As a complement to the story, an exclusive audio interview with Hill Vaden, Gulf Coast upstream analyst for research and advisory firm Wood Mackenzie, is now posted at OilandGasInvestor.com. Vaden discusses Haynesville economics and the state of natural gas demand.
–Bertie Taylor, Senior Editor, Oil and Gas Investor, btaylor@hartenergy.com, 713-260-6497.
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