Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2020 at 11:24

LOUISIANA (25, increase of 1)

Bienville:  Aethon – 4

Bossier:  Aethon – 2

Caddo:  Trinity – 1, Comstock – 1

DeSoto:  Aethon – 1, Vine – 3, Chesapeake – 1, Indigo – 3, Goodrich – 1, Comstock - 3

Natchitoches:  Indigo – 2.

Red River:  Aethon – 1.

Sabine:  Vine – 1, GEP Haynesville – 1.

 

 

TEXAS (15, no change)

Harrison:  Comstock – 1, Sabine – 1, Rockcliff – 1, Tanos – 1.

Nacogdoches:  BP America – 2.

Panola:  Rockcliff – 5, R Lacy – 1, Sabine - 1.

San Augustine – Aethon – 2.

Permalink Reply by Skip Peel - Mineral Consultant on March 27, 2020 at 16:28

LOUISIANA (26, increase of 1)

Bienville:  Aethon – 4, Comstock - 2.

Bossier:  Aethon – 2.

Caddo:  Trinity – 1, Comstock – 1.

DeSoto:  Aethon – 1, Vine – 3, Chesapeake – 1, Indigo – 2, Goodrich – 1, Comstock - 3

Natchitoches:  Indigo – 2.

Red River:  Aethon – 1.

Sabine:  Vine – 1, GEP Haynesville – 1.

 

 

TEXAS (11, decrease of 4) Dropped rigs: BP America: 2, Rockcliff: 1, Aethon: 1.

Harrison: Sabine – 1, Rockcliff – 1, Tanos – 1.

Nacogdoches:  Aethon - 1.

Panola:  Rockcliff – 4, R Lacy – 1, Sabine - 1.

San Augustine – Aethon – 1.

Permalink Reply by Rock Man on March 28, 2020 at 3:30

Despite the -4 in Texas, interesting to see these operators still pushing ahead with GAS drilling in the ArkLaTex area.

Gas prices essentially not impacted by the recent oil price free fall so the demands / needs still there for these operators to be pushing ahead. 

It is like two different worlds in the oilfield right now!

Thanks for posting this info.

Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2020 at 3:53

You're welcome.  I started this weekly report in anticipation of a dropping rig count but that was before the Saudi/Russian price war and COVID-19.  I expect we will see a slow but steady decline in rigs as long as both of those situations persist.

Aethon (10), Comstock (6), Rockcliff  (5) Indigo (4) and Vine (3). 

Five companies account for 76% of Haynesville directed rigs. 

Eight others account for the remaining 24%.

BP America now has no Haynesville directed rigs recently dropping off the rig count and joining XTO (XOM) as the two super majors now absent from the play.

Permalink Reply by Skip Peel - Mineral Consultant on April 6, 2020 at 11:45

LOUISIANA (25, decrease of 1)

Bienville:  Aethon – 4, Comstock - 1.

Bossier:  Aethon – 2.

Caddo:  Trinity – 1, Comstock – 1.

DeSoto:  Aethon – 1, Vine – 3, Chesapeake – 1, Indigo – 1, Goodrich – 1, Comstock - 3

Natchitoches:  Indigo – 2.

Red River:  Aethon – 1.

Sabine:  Vine – 2, GEP Haynesville – 1.

 

 

TEXAS (9, decrease of 2)

Harrison: Sabine – 1, Rockcliff – 1.

Nacogdoches:  Aethon - 1.

Panola:  Rockcliff – 3, R Lacy – 1, Sabine - 1.

San Augustine – Aethon – 1.

Permalink Reply by Skip Peel - Mineral Consultant on April 10, 2020 at 3:01

LOUISIANA (26, increase of 1)

Bienville:  Aethon – 3, Comstock - 1, Vine 1.

Bossier:  Aethon – 2.

Caddo:  Trinity – 1, Comstock – 1.

DeSoto:  Aethon – 1, Vine – 3, Chesapeake – 1, Indigo – 1, Goodrich – 1, Comstock - 3, Brix - 1.

Natchitoches:  Indigo – 2.

Red River:  Aethon – 1.

Sabine:  Vine – 1, GEP Haynesville – 1, Indigo - 1.

 

 

TEXAS (9, no change)

Harrison: Sabine – 1, Rockcliff – 1.

Nacogdoches:  Aethon - 1.

Panola:  Rockcliff – 3, R Lacy – 1, Sabine - 1.

San Augustine – Aethon – 1.

Permalink Reply by William C. Morrison on April 11, 2020 at 6:25

I am surprised at so many gas rigs still drilling in Louisiana (and Texas).  I have an interest in two gas wells in Texas and last month I got a whopping big check for $10.83.  In other words, gas is cheap.  Last year I lost money on the two wells due to up keep and maintenance.  Those wells must produce an extraordinary amounts of natural gas.

Permalink Reply by Rock Man on April 11, 2020 at 10:16

The attached presentation from NAPE Feb 2020 by Cheniere is a decent overview of the worldwide LNG market. This is one of the main reasons that companies are still developing / drilling up their high volume gas locations.

I personally think that Comstock / Jerry Jones is set up to take full advantage of various relationships he has in place as to the gas market. I also look for Comstock to scoop up some distressed assets to add to their already large portfolio.

Comstock comments are just my opinion, as always.

PS - and the multiple new gas pipelines designed to bring gas from the Permian Basin to the Tx Gulf Coast are all still on the planning books or are actively in construction mode

Attachments:

• NAPE Feb 2020 Cheniere LNG World Market.pdf, 2.7 MB

Permalink Reply by Skip Peel - Mineral Consultant on April 11, 2020 at 11:03

Haynesville and Bossier Shale wells are prolific producers.  Both shales are "over pressured" and produce average 24 hour Initial Production (IP) volumes of  20,000 to 35,000 mcf with flowing pressures in the range of 7,500 to 10,000# psi.  Somewhere in the range of 70 to 80% of Estimated Ultimate Recovery (EUR) is produced in the well's first 24 months on line.  A partial explanation for the rig count is that Vine and GEP Haynesville are private equity funded, pure play Haynesville Shale companies (they do not have the option to drill anywhere other than their Haynesville leases) and Aethon and Indigo are privately owned independents.  Only Chesapeake, Comstock, Goodrich and EXCO are publicly traded.  Note that none of the super majors with Haynesville stakes have rigs deployed - XTO (XOM) and BP America/BPX (British Petroleum).  Unlike the smaller independents both companies have other options for basins to drill and can afford not to drill any Haynesville/Bossier wells although they may occasionally bring in a rig to meet certain obligations.

Permalink Reply by Skip Peel - Mineral Consultant on April 18, 2020 at 2:14

LOUISIANA (23, decrease of 3)

Bienville:  Aethon – 3, Comstock - 1, Vine 1.

Bossier:  0

Caddo:  Trinity – 1, Comstock – 1.

DeSoto:  Aethon – 2, Vine – 2, Chesapeake – 1, Indigo – 1, Goodrich – 1, Comstock - 2, Brix - 1.

Natchitoches:  Indigo – 2.

Red River:  Aethon – 1.

Sabine:  Vine – 1, GEP Haynesville – 1, Indigo - 1.

 

 

TEXAS (9, no change)

Harrison: Sabine – 1, Rockcliff – 1.

Nacogdoches:  Aethon - 1.

Panola:  Rockcliff – 3, R Lacy – 1, Sabine - 1.

San Augustine – Aethon – 1.

Permalink Reply by Rock Man on April 18, 2020 at 3:33

Thanks for the update. 

It will be interesting to see where this is in 30/60/90 days as to who is still drilling.

Permalink Reply by Skip Peel - Mineral Consultant on April 18, 2020 at 7:46

I suspect that the Haynesville Shale rig count will hold up better than just about any other basin with the possible exception of the Marcellus. Here's why: Natural Gas, not Oil. No majors or super-majors currently drilling (XTO & BPX long departed). Few publicly traded companies active, only Chesapeaek, Comstock & Goodrich. Of the 12 Haynesville operators with rigs deployed 7 have only one rig currently drilling. Of the other five, only Aethon has more than 4.

So the number of operating companies and the number of rigs deployed over ~1.5M+ acres is low. Unless some companies would choose to stop drilling completely, the play may only loose a handful of rigs from here. I think that is unlikely as the private equity backed independents have to maintain cash flow to service debt and meet overhead along with some baked in return for the investors and the publicly traded companies other than Comstock are running on fumes and faced with the same requirements for debt and overhead short of declaring bankruptcy. Chesapeake could drop their one rig and still be drilling in other basins, Goodrich is now basically nothing but Haynesville so they don't have that option.

I can see a further reduction over the coming weeks of about a half dozen rigs by Aethon, Rockcliff and/or Comstock but only they know the specifics of the contractual obligations and limitations regarding their drilling sub-contractors. Rigs with contracts nearing expiration may be kept drilling so as not to trigger any early cancellation penalties.

Over the period covered to date, the average weekly rig count is 38 and has been relatively consistent until 3 weeks ago.

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