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Permalink Reply by W. Carter Richardson on April 10, 2025 at 13:53

now lets start drilling.....

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Permalink Reply by Skip Peel - Mineral Consultant on April 10, 2025 at 13:57

The first instruments recorded in the public record under Apex Natural Gas showed up this morning.  We'll see if Apex speeds things up but Paloma was the most aggressive HA operator in the first quarter as to alternate well applications.  They were setting the table for increased drilling.  Now we need to see well permits by Apex although the first may be in Paloma's name.

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Permalink Reply by Debbie on November 26, 2025 at 18:02

What's up with them operating so many rigs and frac crews? Bit odd for a company their size. Are they going to turn in all those wells to sale or are they trying to sell before that happens?

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Permalink Reply by Skip Peel - Mineral Consultant on November 27, 2025 at 1:51

Paloma was already "sold" some months ago.  APEX Natural Gas is the new company funded by hedge fund giant Citadel.  APEX's business model was to acquire as many existing Haynesville shale units as they could buy and to drill where others were not as to urban rock.  Since the sale, APEX has been aggressive to lease and drill.

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Permalink Reply by Debbie on November 27, 2025 at 3:23

Thanks Skip. How are they able to drill in urban locations while other operators are not? Are they really turning all those wells to sale? Looks like they are burning through their acreage. Are they acquiring newer ones?

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Permalink Reply by Skip Peel - Mineral Consultant on November 27, 2025 at 3:35

The undrilled and proven Haynesville shale rock is declining fairly rapidly and there are fewer opportunities to enter the play as consolidation has led to a small handful of operators where once there were about a dozen and a half.  In the early years of the Haynesville shale there was interest in attempting to produce the shale under the Shreveport-Bossier city limits but it didn't last.  As the play was proven further and further south through the south half of DeSoto and into northern Sabine parishes, there was economic Bossier shale and an opportunity to develop twice the wells per drilling unit as was viable in the norther half of the fairway.  Developing units and the required infrastructure to support them was cheaper and easier in more rural areas than in urban areas.  Leasing the many small urban lots is an added expense as are the challenges of finding and developing the surface locations for well sites, the access roads and pipeline rights-of way.  That was a niche that Paloma/Apex was willing to exploit.  Other Haynesville operators are capable of urban development but they have better options in their existing operating footprints.  As to burning through their newer acreage it is hard to know for sure what the long term development plan is for Apex.  They could look to full, long term development or an opportunity to sell their acreage to one of the major Haynesville operators.  As a hedge fund, Citadel may not be planning to be a long term player.

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Permalink Reply by Debbie on November 30, 2025 at 3:27

Thanks Skip. Didn't know about the urban drilling angle. Guess it makes sense for them in this price environment

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Permalink Reply by Skip Peel - Mineral Consultant on November 30, 2025 at 3:34

You're welcome, Debbie.  All the Haynesville operators are talking up new LNG demand and better prices in the next two years.  Apex is establishing drilling units wherever and however they can but they will need to drill to maintain cash flow.  I'm unsure if the company took on any debt to acquire the units that they bought from other operators.  Apex will also have a good bit of investment expense in building new pads sites, lease roads and gathering systems where they do not already exist.

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Permalink Reply by Debbie on November 30, 2025 at 3:46

That's what I was thinking too. They're spending so much, taking on so much risk with all the urban drilling, they better be ramping up production in winter. 

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Permalink Reply by Skip Peel - Mineral Consultant on November 30, 2025 at 3:54

There has always been risk in the Haynesville Play mostly for the operators but also for the mineral owners.  Long lasting depressed price cycles have been the norm with occasional short lived profitable price spikes.  The operators have prioritized driving down the cost to produce an mcf to limit the losses during all those depressed price periods that's how we have ended up with long laterals, fewer wells,  intensive fracks and a small handful of major operators.  Now those operators are all in on a bet that LNG will increase their profits over the last half of the Haynesville Shale lifespan.  I give them a 50/50 chance.

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Permalink Reply by Skip Peel - Mineral Consultant on November 30, 2025 at 4:33

The future of LNG depends on global demand.  US LNG's most competitive market is Europe and Western Europe is moving away from all fossil fuel energy sources.  Demand is set to decrease.  US LNG is less competitive cost wise in other global markets.  That is why there is interest in west coast or Canadian LNG export which would be more competitive in far East markets like Japan and Korea.  China is going electric at a break neck pace and will phase out coal generated electricity over the next decade.  US LNG is at a disadvantage there for political reasons and for the fact that China can source LNG more cheaply from Australia and Qatar.  If the European market goes away US LNG is will be in a state of over capacity and looking at the greatest instance of stranded assets in the history of modern economies.

Looming over all the questions on how countries will get their energy in the near future is geothermal.  It will no longer be limited to places where hot rocks are relatively shallow, it will be generally available world wide.  Cheap, reliable and clean it is the future of global electrical generation.  There are currently geothermal projects in the works on every continent and it will eclipse fossil fuels in short order including for US data centers where the builders prioritize clean energy long term. The adoption of cheap and reliable Chinese cars and trucks is ramping up quickly in markets like Africa and South America.  If you stand on your tip toes and look hard enough into the future you will see the end of the age of fossil fuels.

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Permalink Reply by Skip Peel - Mineral Consultant on December 1, 2025 at 3:03

This is the immediate threat to US LNG's European market and an expression of just how much the EU wants to get off fossil fuels. RBN excerpt.

For months, the Trump administration and energy industry groups have been pressing the European Union (EU) to either scrap or significantly ease its regulations on methane emissions. They assert the methane monitoring, reporting and verification (MRV) requirements, set to ratchet up in 2027, 2028 and 2030, would be impossible for U.S. natural gas producers to meet and result in a sharp decline in — or even an end to — U.S. LNG flows to the EU. In today’s RBN blog, we’ll discuss the controversy and how we think it’s likely to be resolved.

https://rbnenergy.com/daily-posts/blog/angst-over-eus-methane-regs-...

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