BP Plans Continued Haynesville Development
SHREVEPORT, La.—BP (NYSE: BP) has leveraged its lessons learned from early entry into the Haynesville Shale to be among the play’s most successful producers, according to Doug Johnson, senior vice president, Lower 48, East and Midcontinent (West) Development for BP.
Johnson shared an update of BP Lower 48’s operations in the Haynesville Shale at Hart Energy’s inaugural DUG Haynesville Conference and Exhibition. Johnson said BP plans to bring online 25 more Haynesville shale wells this year and continue to grow its acreage footprint in the East Texas region of the play, where it holds 1.4 million acres.
“As we get into 2018, and looking forward, we’re going to continue to do what we’ve already proven to ourselves what we can do,” he said.
BP’s strategy in the Haynesville has been to co-develop both the Haynesville and Bossier reservoirs on a single pad, and to among the deepest depths in the shale world—up to 16,000 ft (4,876 m) TVD—and with laterals that average about 7,500 ft (2,286 m).
The company’s well completions average about 2,500 pound per foot, but Johnson said BP will be trialing larger stimulations. BP’s pattern of development in the Haynesville Shale is drill several wells in sequence, he said.
“We drill, we complete, and for those reasons—while it may extend the cycle time—in part we generate greater fracture efficiency, greater stimulated reservoir volume, and by bringing all these wells on simultaneously we don’t come back later in time and have to shut in for offset frack mitigation.”
According to Johnson, BP’s wells have performed favorably compared to many of the play’s other operators. One of BP’s Southern Haynesville wells averaged over 16 million cubic feet per day (MMcf/d) over its 14 months.
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Replies to This Discussion
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Permalink Reply by Easttxranch on
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There is currently 1 rig drilling right now just outside of Huntington, and they will be drilling another soon just outside of Huntington.
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Permalink Reply by Skip Peel - Mineral Consultant on -
BP has 5 rigs deployed in the southern reaches of the Haynesville Shale fairway in E TX, 2 in Angelina and 3 in San Augustine.
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Permalink Reply by EastTexasFarmer on
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Per Bernard Looney, BP senior management, on their last earnings conference call (Q4 2017 results):
In 2015, we had very little acreage in an area called the Bossier or Haynesville Shale and we identified this opportunity called SoHa, South of Haynesville. Over the last two years we have quadrupled our acreage position in this play, which is independently assessed as being possibly the most lucrative gas play in the United States. We have gone from zero rigs to six rigs drilling in the play.
The 2017 drilling program generated in excess of 40% rate of return at $3 Henry Hub. We went from zero to about 35,000 barrels a day of production in the space of 18 months and can see that production growing to over 100,000 to 150,000 barrels a day in the next four or five years. 400 drilling locations identified and probably more than half of the capital into the Lower 48 BP business going into that play alone, because it is so lucrative.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Soha has great potential but high cost and mechanical risk. These are expensive wells when compared to similar but less expensive wells further north and at more shallow True Vertical Depths (TVD)? BP and all the Haynesville Shale operators are facing two challenges: huge volumes of cheap natural gas headed to the Gulf Coast from major basins across the country which will hold down prices and rising cost of materials and field services. There remains a shortage of pressure pumping services (frack crews) and rising material costs may be about to be made worse by tariffs on steel which is a major expense for drilling and mid-stream operations.
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Permalink Reply by EastTexasFarmer on
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Can’t disagree. However if you look at the infrastructure buildout in north Angelina County, it appears that BP is serious about developing their leasehold. I’m assuming the final market will likely be LNG or Mexico export.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Both BP and XTO are serious about HBP'ing their Haynesville/Bossier leasehold. Just not in going to full development. They are banking the reserves for future operations. Both have the financial ability to make that investment now even at depressed prices.
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