Haynesville and Niobrara shales are important for US oil and gas

Alex Chamberlin - Author

Aug. 18 2020, Updated 6:20 a.m. ET

Niobrara Shale

According to the U.S. Energy Information Administration (or EIA), the Niobrara Shale has become one of the fastest-growing oil-producing regions in the U.S. It’s located in Colorado and Wyoming.

Oil production in the Niobrara Shale increased from ~100,000 barrels per day (or bbl/d) in 2007 to ~350,000 barrels in August 2014. This marks an increase of ~3.5 times in seven years.

According to Baker Hughes, there are currently ~62 rigs operating in Niobrara—76% of the rigs are oil-targeted. In comparison, there were ~43 rigs in September 2011—only 42% of the rigs were oil-directed.

Natural gas production in Niobrara increased from an average of ~3.5 billion cubic feet per day (or bcf/d) in 2007 to ~4.6 billion bcf/d now—a growth of ~30%.

In August alone, production increased 51 million cubic feet per day (or mcf/d) over the previous month.

Haynesville Shale

According to the EIA, natural gas production in the Haynesville Shale increased ~85% in the past seven years. The shale is located in Louisiana. In August 2014, the region produced ~6.5 bcf/d—compared to ~3.5 bcf/d in 2007.

As noted in the chart above, rig efficiency has improved significantly in Haynesville—particularly in regard to natural gas production.

From 2011 to 2014, rig counts in the Hayneville Shale decreased ~65%—from ~130 in September 2011 to 45 rigs operating currently. It’s important to note that 43 of the rigs are directed towards natural gas production.

All of these rigs are directional in trajectory—or type. Click here to learn more about horizontal and vertical rigs.

Key stocks and exchange-traded funds (or ETFs)

Major oil and gas producers in the Niobrara and Haynesville shales include Anadarko Petroleum (APC), Apache Corporation (APA), Chesapeake (CHK), and EXCO Resources (XCO).

Many of these producers are also part of energy ETFs like the Energy Select SPDR ETF (or XLE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

In the next part of the series, we’ll discuss how prices for other “liquids” have affected drilling patterns.

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