An Old Fracking Hot Spot Makes a Comeback:
The Haynesville Shale in Louisiana is being reborn, with the number of active drilling rigs tripling in the past year
By Lynn Cook, The Wall Street Journal
Oct. 17, 2017 4:46 p.m. ET
One of the early centers of American shale drilling is roaring back to life, boosted by a building boom of petrochemical plants, fertilizer factories and gas-export terminals along the Gulf Coast.
The Haynesville Shale, a giant natural-gas field in northwest Louisiana, was one of fracking’s hottest spots a decade ago. But it fizzled out about five years ago as gas prices plunged and drillers focused on finding oil next door in Texas. Now, the Haynesville is being reborn as companies with longstanding positions in the area, such as Chesapeake Energy Corp. and newcomers seeking opportunity rush back in and drill again.
Gas production from the Haynesville has risen more than 20% so far this year, to more than 7 billion cubic feet a day from less than 6 billion in January, according to the U.S. Energy Department. The number of rigs active in northern Louisiana parishes and the Texas portion of the field has more than tripled in the past year to 44, according to oil field services company Baker Hughes Inc.
“The Haynesville is where it began,” said Frank Patterson, Chesapeake Energy’s vice president of exploration and production.
The company has been learning how to get more out of the ground by drilling and fracking longer wells, Mr. Patterson told investors earlier this month. Chesapeake, which now produces more than 1.2 billion cubic feet of gas each day in the Haynesville, plans to ramp up efforts to re-frack old wells where production is starting to peter out to squeeze more out of them, using newer technology.
QEP Resources Inc. is also re-fracking 30 Haynesville wells this year.
“The payouts on these wells are extremely attractive at $3 gas,” said Charles Stanley, QEP’s chairman and chief executive. Gas this year has averaged roughly $3 per thousand cubic feet at Louisiana’s Henry Hub, a benchmark for U.S. prices.
Rising demand for gas has boosted the area’s prospects. The U.S. Energy Department forecasts that between now and 2040, consumption of natural gas will increase more than that of any other fuel source, as demand from big industrial users rises and power plants rapidly replace coal-fired facilities.
Regional producers can now also export their liquefied natural gas. Cheniere Energy Inc.’s Sabine Pass LNG plant, a major exporting facility that opened in Louisiana last year, is sending cargoes of liquefied natural gas to Asia, Europe and South America. A dozen other LNG projects are under construction or are permitted and planned in Texas, Louisiana, Mississippi and Maryland.
Here is a PDF of the print version with photos and graphics.