US natural gas producers' commitment to slow drilling activity in response to low gas prices is hitting hard in the Haynesville this spring, dampening the outlook for production growth there this summer.
In April, the number of new wells drilled in the Haynesville fell to 36 for the month, totaling the fewest since late 2020. Well completions there also dropped in April to just 29, or the fewest since early 2021, recently published data from the US Energy Information Administration showed.
Looking ahead to June, EIA is projecting is a nearly 740 MMcf/d decline in legacy gas production from the Haynesville, which should be offset only partially by output from new wells. On balance, the agency expects to see an overall decline in Haynesville production of nearly 270 MMcf/d next month, EIA's May Drilling Productivity Report showed.
The expected slowdown in output next month likely comes as no surprise to market analysts and investors.
Over the past 13 months, operators in the Haynesville have roughly halved the number of active rigs there. As of the week ended May 1, the total rig count there was estimated at just 41 – down from over 80 rigs in first-quarter 2023, data from S&P Global Commodity Insights showed.
Producer guidance
In recent months, some of the largest gas producers in the Haynesville have also announced significant cuts to drilling activity there in response to the weak commodity-price environment.
Earlier this month, Chesapeake Energy said it would curtail gas production by some 400 MMcf/d with roughly half of that volume coming from the Haynesville Shale and half from its Marcellus acreage. Prior to that, executives said Chesapeake was deferring some of the company's turn-in-lines this year, which was expected to temporarily cut production by about 30% until gas prices improve. According to the company's estimates at the time, the deferrals would give Chesapeake about 1 Bcf/d of incremental production capacity by fourth-quarter 2024.
Private gas producer Aethon Energy, speaking from Hart Energy's DUG GAS+ Conference & Exhibition 2024, said that it too had made major cuts to the company's Haynesville drilling activity. As of late March, Aethon had slashed its rig count by nearly half to just seven saying that it would remain in maintenance mode in 2024 as it keeps a close eye market dynamics and prices.
Haynesville gas production faces summer headwinds as activity hits 3-year low
by Skip Peel - Mineral Consultant
May 14
Haynesville gas production faces summer headwinds as activity hits 3-year low
Highlights
Well drilling, completions hit new lows
Operators halve rig count in 13 months
EIA sees production declining in June
US natural gas producers' commitment to slow drilling activity in response to low gas prices is hitting hard in the Haynesville this spring, dampening the outlook for production growth there this summer.
In April, the number of new wells drilled in the Haynesville fell to 36 for the month, totaling the fewest since late 2020. Well completions there also dropped in April to just 29, or the fewest since early 2021, recently published data from the US Energy Information Administration showed.
Looking ahead to June, EIA is projecting is a nearly 740 MMcf/d decline in legacy gas production from the Haynesville, which should be offset only partially by output from new wells. On balance, the agency expects to see an overall decline in Haynesville production of nearly 270 MMcf/d next month, EIA's May Drilling Productivity Report showed.
The expected slowdown in output next month likely comes as no surprise to market analysts and investors.
Over the past 13 months, operators in the Haynesville have roughly halved the number of active rigs there. As of the week ended May 1, the total rig count there was estimated at just 41 – down from over 80 rigs in first-quarter 2023, data from S&P Global Commodity Insights showed.
Producer guidance
In recent months, some of the largest gas producers in the Haynesville have also announced significant cuts to drilling activity there in response to the weak commodity-price environment.
Earlier this month, Chesapeake Energy said it would curtail gas production by some 400 MMcf/d with roughly half of that volume coming from the Haynesville Shale and half from its Marcellus acreage. Prior to that, executives said Chesapeake was deferring some of the company's turn-in-lines this year, which was expected to temporarily cut production by about 30% until gas prices improve. According to the company's estimates at the time, the deferrals would give Chesapeake about 1 Bcf/d of incremental production capacity by fourth-quarter 2024.
Private gas producer Aethon Energy, speaking from Hart Energy's DUG GAS+ Conference & Exhibition 2024, said that it too had made major cuts to the company's Haynesville drilling activity. As of late March, Aethon had slashed its rig count by nearly half to just seven saying that it would remain in maintenance mode in 2024 as it keeps a close eye market dynamics and prices.