Looking Back At The Haynesville Shale - A Retrospective
From time to time, I reflect on the history of the Haynesville Shale Play. From inception until now, it encompasses my entire mineral career. I owe thanks to many who have helped me along the way especially my best friend, Randy Davidson, an outstanding O&G attorney and the finest man I've every called a friend. His legacy lives on through the attorneys that he trained and that I work with to this day. He is sorely missed by us all.
Recently I have mentioned the consolidation of proven HA/BO acreage into the hands of fewer and larger companies and what that means for the play's future. Prior to the emergence of the Haynesville, the Cotton Valley was the major play that drove O&G activity in NW LA. A number of companies were here chasing the Cotton Valley when the Haynesville land rush began. Some companies were lucky to have existing operating areas that turned out to be prime Haynesville rock. Chesapeake and Petrohawk come first to mind because of their aggressive push to lease up acreage especially that which was a "bolt on" to their existing areas.
Much of the crazy competition for leases can be attributed to two men, Aubrey McClendon at Chesapeake who announced the Haynesville Shale and other unconventional shale plays in April 2008 and Floyd Wilson at Petrohawk who competed with McClendon and helped to drive up lease costs for all the companies looking for a place in the play. Aubrey started the public competition for leases by raising the stakes to a quarter royalty regardless of a tract’s acres and then quickly an escalating bonus competition that Floyd finally topped with a public bid for south Caddo Parish tracts of $30,313 per acre. Astoundingly, his bid for those tracts included a 30% royalty. That signaled the end of the period of outrageous lease offers as Petrohawk lost its primary lender, Lehman Brothers, in the financial market crash of 2008.
For those interested in what was going on prior to the public announcement of the Haynesville Shale, I recommend my blog post, Chronology of the Early Haynesville Shale Play in Northwest Louisiana. Encana and Chesapeake were the early movers. For those who missed it or may care to read it again, here is a link:
https://gohaynesvilleshale.com/profiles/blogs/chronology-of-the-early
With the exception of Encana's joint venture partner SWEPI (Shell Western Exploration and Production Inc.), all the early Haynesville focused companies were smaller independents or minor semi-majors. Some were fortunate to have their operating areas in good Haynesville rock and some missed out completely. For the unfortunate, Devon Energy comes to mind. And for those with small operating areas who chose to sell out and seek other opportunities instead of spending like drunken roughnecks for additional leasehold, EOG Resources comes to mind. Enron Oil & Gas went on to pioneer horizontal drilling and hydraulic fracture stimulation for oil in other basins when that was thought to be a risky move. EOG turned out to be the most successful smaller independent unconventional focused operator and grew into a much larger company that continues to be a leader today.
The oil and gas industry has a long history of Mergers and Acquisitions (M&A). The larger companies acquire the assets of smaller companies and smaller companies are often those that explore more risky or unproven formations hoping to make a discovery that vaults them higher up in the O&G world or makes them wealthy when they sell. Those larger publicly traded O&G companies more often than not are cash rich and have lower levels of debt to value than the smaller companies. They are fine with letting the independents take the risks and reap the rewards when they swoop in to acquire a proven or prospective asset.
The Haynesville/Bossier Shale has matured and has gone through a lot of M&A cycles over its life. Many companies have come and gone. The proven fairway now is operated by only a few significant operators. The advantages of scale bring business advantages that are important in a future that likely includes fewer natural gas price spikes and a lower average price per mcf over time. Those advantages include consolidated acreage that facilitates longer lateral wells, the ability to lower costs for field operations and supplies and leaner corporate operations. The result of these changes may mean the end of natural gas prices above $4/mcf long term but fewer periods below operators’ break-even costs per mcf.
To help jog our memories of where the play has come from to where it is today, I offer a flow chart of the Haynesville operating companies. I know I have left some out so feel free to chime in with those companies that you remember.
Expand Energy Aethon Comstock BPX PALOMA
Chesapeake Southwestern Tellurian Covey Park BHP Billiton Goodrich
Goodrich* GEP Haynesville Samson Contour BEUSA (Bridas) Petrohawk
Matador* Encana Anadarko EOG Operating
Vine/Brix J-W Operating Forest Oil
SWEPI Questar (QEP)
El Paso (EP Enrgy)
*Goodrich and Matador were existing CV operators that partnered with Chesapeake on their early wells. Chesapeake provided the field management and drilling and completion experience for both companies. Matador moved on to oil focused basins and Goodrich sold off their Haynesville assets piecemeal to a number of different smaller independents.
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Replies to This Discussion
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Permalink Reply by Jimmy Hamiter on
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Just curious, Lawrence, what Section Township and Range are your Spider wells located in?
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Permalink Reply by Lawrence Silver on -
In the Spider field: Sec 36-12N-14W and Sec 25-12N-14W. In the Mansfield field Sec 30-12N13W and in the Trenton field Sec 31-12N-13W.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Lawrence, I maintain a tracking spreadsheet for all the HA units in LA. Your name is on all of those sections. If I enter a new permit to drill, I'll know and I'll let you know. There are no notice requirements for well permits, only for alternate well applications. Both are reasons you will get offer letters. No days you might get a dozen or more because buyers are always looking in the public record for alt well applications and well permits.
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Thanks for that. I'm 32-12N-14W only, getting royalties from Comstock on one Horizontal CU well with 4 or 5 others still in Field Order status. Have a good one!
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Permalink Reply by Skip Peel - Mineral Consultant on
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You're welcome, Lawrence. I'll be in touch the next time one or more of your sections gets a well permit.
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Permalink Reply by Skip Peel - Mineral Consultant
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At some point, I'll need to add QUANTENT Energy.
Q1129
QUANTENT ENERGY PARTNERS OPERATING LLC
HA RB SUX;ALLBRITTON CATTLE 8
001
008-13N-11W
HA RA SUM;JOHNSON TR 32-12-13H
001
032-12N-13W
HA RA SUK;JOHNSON TR 29-12-13H
001
029-12N-13W
HA RB SU78;KERVIN 13 H
001
012-13N-11W
HA RA SUD;PETRO-HUNT ETAL 13 H
001
013-11N-14W
HA RA SU71;ROY 7-6 H
001
018-17N-11W
HA RA SU71;ROY 7-6 H
002-ALT
018-17N-11W
HA RA SU71;CHANDLER 6-7 H
001-ALT
032-18N-11W
HA RA SU71;CHANDLER 6-7 H
002-ALT
032-18N-11W
HA RA SU71;CHANDLER 6-7 H
003-ALT
032-18N-11W
HA RA SU76;CHANDLER 31-30 H
001
032-18N-11W
HA RB SUX;ALBRITTON CATTLE 8 H
002-ALT
008-13N-11W
HA RB SUX;ALBRITTON CATTLE 8 H
003-ALT
008-13N-11W
HA RB SU78;KERVIN ETAL 13 H
002-ALT
012-13N-11W
HA RB SU78;KERVIN ETAL 13 H
003-ALT
012-13N-11W
HA RB SU78;KERVIN ETAL 13 H
004-ALT
012-13N-11W
HA RA SU56;MCGUIRE 12-1 HC
001
013-17N-12W
HA RA SU56;MCGUIRE 12-1 HC
002-ALT
013-17N-12W
HA RB SUX;ALBRITTON CATTLE 8 H
004-ALT
008-13N-11W
HA RA SUD;PETRO-HUNT 13-12HC
001-ALT
013-11N-14W
HA RA SUD;PETRO-HUNT 13-12HC
002-ALT
013-11N-14W
HA RA SUK;JOHNSON TRUST29-32HC
001-ALT
029-12N-13W
HA RA SUK;JOHNSON TRUST29-32HC
002-ALT
029-12N-13W
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Permalink Reply by Skip Peel - Mineral Consultant
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Post Oak Energy Capital Provides Equity Commitment to Quantent Energy Partners
Quantent Completes Initial Haynesville Acquisition
September 09, 2024
HOUSTON & OKLAHOMA CITY--(BUSINESS WIRE)--Post Oak Energy Capital, L.P. (“Post Oak”) today announced the closing of an equity commitment to Quantent Energy Partners, LLC (“Quantent”) from investment funds managed by Post Oak. Simultaneously, Quantent completed its initial acquisition of natural gas assets in the Haynesville Shale. The Quantent management team has extensive operating experience in the region and intends to target upstream development opportunities in the Haynesville and Bossier shale formations across North Louisiana and East Texas.
“We are proud to announce the successful formation of our partnership with Post Oak and the completion of our initial acquisition”
Headquartered in Oklahoma City, Quantent’s leadership includes industry veterans and co-founders Kevin DeLay, Chief Executive Officer, and Todd Nance, Chief Operating Officer, as well as Aaron Renken, Chief Financial Officer, Matt Thompson, Head of Land and Legal, and Kurt Vanderyt, Head of Geoscience. A majority of the Quantent management team’s key leadership have a long history of successfully drilling and completing horizontal wells targeting the Haynesville formation in partnership with Post Oak.
The initial acquisition includes over 7,000 net acres located in North Louisiana, underpinned by an attractive combination of producing wellbores and operated development inventory. Additionally, Quantent has cultivated a deep pipeline of opportunities and is actively engaged in pursuing assets and development projects across the region. The company will work to capitalize on the momentum from successfully closing its initial acquisition to grow its footprint in the Haynesville.
“We are proud to announce the successful formation of our partnership with Post Oak and the completion of our initial acquisition,” said Kevin DeLay. “Our team has a deep familiarity with building upstream ventures in collaboration with Post Oak in the Haynesville and are confident that we have a partner that will provide us with the support and resources required to succeed. We are excited to continue to leverage our operational track record to drive value from the acquired asset base as well as subsequent opportunities in the region.”
“We are pleased to once again partner with the Quantent team on their newest venture and are highly confident in their ability to unlock value in a region where they possess a distinguished track record of assembling and developing upstream assets,” said Frost Cochran, Managing Director and founding partner of Post Oak. “The growing need for responsible development and operation of natural gas assets that are strategically located in close proximity to key demand centers in the Gulf Coast region will complement Quantent’s strategic approach to building its latest upstream enterprise.”
About Quantent Energy Partners, LLC
Quantent Energy Partners was formed in 2024 with an equity commitment from Post Oak Energy Partners V, LP. Quantent is an Oklahoma City-based exploration and production company that is actively engaged in acquiring, developing and operating upstream natural gas assets in North Louisiana and East Texas, where management has a successful history of assembling and developing upstream assets across a wide spectrum of both private and public companies. For more information, please visit: www.quantentenergy.com.
About Post Oak Energy Capital, L.P.
Post Oak, which was established in 2006, is a Houston-based private equity firm primarily focused on making domestic investments in the upstream, midstream and oilfield services sectors of the energy industry. Post Oak seeks to identify outstanding oil and gas entrepreneurs and management teams with well-defined business plans that also possess a demonstrated track record of creating accretive value for shareholders. For more information, please visit www.postoakenergy.com.
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Permalink Reply by Hopeful About Natural Gas on
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Thanks Skip, another informative article from you. I always thought GHS would chronicle the Haynesville Shale, but it's been a huge help for us "little people". I knew next to nothing about O&G before finding Go Haynesville Shale.
I joined about 2008, and I had a different username. I have not been here for a while. But it's great to see this blog still pumping. It has also been great to see professionals helping new folks. Many of you were very helpful to me and I appreciate it.
HANG
(it stands for Hopeful About Natural Gas - and I will always first check what the initials could spell if I ever get another email account!)
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Permalink Reply by Skip Peel - Mineral Consultant on
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Thank you, HANG. I got an email alerting me to your reply. That made me very happy!
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Permalink Reply by Donna Thornton on
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Good read! Thanks, Skip.
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Permalink Reply by Skip Peel - Mineral Consultant on
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You're welcome, Donna.
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Permalink Reply by Rock Man on
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Skip, thanks for putting this historical summary together.
- First off, it was nice to get notice of this new post without my having to click "Follow" once I stumbled onto it accidentally. Guessing Keith got that issue corrected. Good job.
Interesting to see evolution of a play area like this over time.
- More wells, more science, more results, more understanding leads to a solid delineation of the "trend" and various economic sub trends.
Biggest issue is the continued evolution of frac stimulation approaches from early Gen 1 to Gen 4-5 or more over time.
- Longer laterals, better LZ / target zone delineation and more aggressive and complex fracs to equate to higher rates and more EUR per well location.
Now we have seen the early stages of the Western Haynesville Shale (and Bossier Shale) in Robertston and Leon (and perhaps Freestone and Anderson) Counties. This area was inaccessible / not viable several years ago due to depth, pressure and temperature.
- Now the two operators are pushing the limits of technology to tap this huge gas in place resources.
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