A Haynesville Shale "leasing frenzy" in central Texas
A Haynesville Shale "leasing frenzy" in central Texas
Energy media is abuzz with word that Comstock Resources might be looking to sell their Northwest Louisiana Haynesville Shale properties which the company now refers to as their "Legacy" Haynesville.
One possible purchaser is said to be Citadel, the hedge fund that owns APEX Natural Gas. APEX has been aggressive in leasing urban Shreveport-Bossier mineral rights and purchasing existing Haynesville shale drilling units from other operators.
“Comstock has got good rock locations,” says Shreveport mineral consultant Skip Peel. “They’ve got plenty of undrilled well locations.”
According to reports, Comstock wants to sell their so-called “Legacy” Haynesville position to prioritize its Western Haynesville play in central Texas.
Peel says “prioritize” could be another word for “fund.” He said the Western Haynesville is a productive but expensive play.
“The reason it's expensive is because it's much deeper, it's hotter, it's over pressured, it's more expensive from a drilling and completing standpoint.”
According to TGS, a company that provides energy data and intelligence, permit depths range from 14,000 to 25,000 feet, with pressures as high as 17,000 psi, and bottom hole temperatures of 340 degrees in the Western Haynesville. TGS said those numbers require advanced and costly technologies to do the job and stay safe.
Comstock's 2nd quarter 2025 investor results report that their five Western Haynesville wells are seeing a production rate of roughly 50% higher than their Legacy Haynesville rate — 36 MMcf per day compared to 25 MMcF.
Peel says there is a leasing frenzy happening in the Western Haynesville and it includes locally known names like Aethon and Comstock. They are now being joined by Expand Energy and Matsui E&P USA.
Where is the Western Haynesville?
Operators began to lease up mineral rights in the area only recently, in 2020. The area is comprised of Freestone, Leon, Limestone and Robertson counties, which are to the south and east of Dallas. Hearne, which is north of Bryan and College Station, is the largest town in the region.
“Companies with a lot of know-how and a lot of money are all just piling into it,” said Peel.
Meanwhile, Peel is watching what might happen with the leases Comstock might sell locally.
“What happens is these private equity companies and maybe Citadel as a hedge fund, buy Haynesville assets and kind of invest in it, but don't fully develop it. They hold on to it for two or three years, and then they sell it to somebody else for a profit. And that's happened. This may be the fifth or sixth time in the 17 years that the Haynesville Shale has been going on, but it's still hot.”
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Replies to This Discussion
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Permalink Reply by Alan Herrington -
Couple of quick points...
It remains to be seen if Comstock can make money in the Western Haynesville. Their wells to date have produced a massive cash flow deficit. My estimate is more than $300 million. They need sustained higher gas prices.
Not sure where TGS got a permitted TVD of 25,000 feet. The deepest reported TVD to date is 19,236 for the Comstock McCullough GLR C 3H in Robertson County.You can add Anderson and Houston Counties, and probably Cherokee to the counties in the Western Haynesville play. There is probably some double counting of acreage because of multiple leasing entities, but I've tracked about 78,000 acres in Anderson and another 41,000 in Houston. Expand has just filed a drilling permit request for a horizontal well in Houston County, and I picked up a rumor today of an upcoming test well in Anderson. More than 55,000 acres has been leased in Cherokee in a leasing project that has been going since February 2021. I believe Expand is the company behind that Cherokee County leasing.
Mitsui has completed drilling on three wells and two more are being drilled now. Two have surface locations in Leon, and three in Freestone, None of the wells have been frac'd yet. Mitsui has reported that 2025 is a test year for them in the new play, and that their intention is to ramp up activity in 2026, assuming they like the results of the early wells.
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Permalink Reply by Skip Peel - Mineral Consultant
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Thanks for the detail and update on drilling, Alan. Yeah, I thought the TGS data seemed odd to me too. Do you have a target price for natural gas that would make the Western Haynesville profitable?
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Permalink Reply by Alan Herrington
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Based on production through June 2025, Comstock's average gross price per MCF to date is only $2.40. An average of $4.25 would have been close to break-even cash flow.
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Permalink Reply by Skip Peel - Mineral Consultant
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Is Jerry betting on LNG? Or data centers? $4.25 seems unlikely in the near term. Would private power agreements be the path to a profitable Western Haynesville?
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