My "brain is smoking" (as I was once told by a person who thought she was on information overload) as my aged and simple circuits overheat with all of the information on this day after the State of the Union Address. Added to impressions about what the President said and/or meant is a great deal of information from other sources about the future of natural gas. For example, the recently announced decision of Chesapeake to slow development in the Haynesville gives one pause.
Red River Parish seems to run a strong second to DeSoto Parish in the number of wells being drilled and we seem to have several of the larger producing wells in the Haynesville Hall of Fame. Even so, a number of mineral leases in Red River have been allowed to lapse and there seems to be no current market now for leasing anew.
Would anyone care to offer a view (perhaps Les B might venture onto this thin ice) about the future of the play in Red River Parish? Might those parts of the parish now thought to be on the margins have a future for production if the price of natgas rises? Is the drilling now primarily about "holding by production?" Will the development of pipeline infrastructure across the parish provide incentive for future drilling? What of the Bossier Shale in Red River? Surely there are other questions that need be considered.
Thank you for your consideration.
Drilling to HBP has declined to a very low point. This can be confirmed by a simple once a week search of permits in the Haynesville Shale parishes. From the SONRIS Lite Main Menu choose the search option, Permitted Wells By Date/Parish. Input the dates you wish to search. All the "HA" wells permitted as "alternate" are the wells drilled after the first unit well and will be designated with a number, "alt-2" for example. Those wells that are not unit wells should have a "#1" in the name designating them as unit wells. Going back many weeks, if not months, the majority of HA wells permitted are alternates. This makes sense in regard to the lack of leasing. When no, or few, new leases are being taken the requirement to drill a unit well goes down in conjunction. And operator avoids the expense of expanding infrastructure by ceasing to drill new unit wells. Drilling alternate wells where infrastructure is in place allows an operator to produce an mcf for the lowest cost.
Thank you, Skip, for your reply. I have been checking the "Permitted Wells by Date/Parish" on Sonris but I was unaware of the designation of #1 or #2. This information is helpful indeed.
My uninformed and perhaps overly hopeful view for the long term future is good. If there is a national and international shift towards the utilization of natural gas then perhaps in time some of the areas that are today considered marginal will again enter into the play. In the meantime, I remain thankful for what has happened and is happening now.
You are kind to share your knowledge with us.
CM, most of the HBP drilling in the Louisiana portion of the Haynesville Shale has been completed and the majority of current drilling is for the purpose of growing revenue/earnings. The lower NYMEX futures natural gas prices have reduced operators ability to hedge their production at higher prices. Most operators have positions in rich gas/oil plays (Eagle Ford, Granite Wash, Bakken, Marcellus, Barnett) that is allowing them to redeploy capital and rigs and still grow earnings. Expect to see rig count in the Haynesville Shale continue to decline thru 2012 into 2013.
An increase in natural gas prices in the 2nd half of the decade has the potential to re-energize the Haynesville/Bossier Shale plays depending on the inventory of drillable locations in other plays and their relative economics compared to the Haynesville/Bossier Shale. Examples of emerging alternative plays are the Tuscaloosa Marine Shale and Lower Smackover Brown Dense.