Haynesville Shale June Production: First Drop in 2015

Haynesville Shale June production

The EIA (U.S. Energy Information Administration) estimates that the Haynesville Shale produced 6.74 bcf (billion cubic feet) per day of natural gas in June. This is according to its Drilling Productivity Report released on July 13, 2015.

June production at the Haynesville Shale was 0.2% lower than production in May and a marginal 0.6% greater than a year ago. This is the first time Haynesville Shale natural gas production has dropped in 2015.

The Haynesville Shale is located in Louisiana, southwestern Arkansas, and eastern Texas.

Haynesville Shale June Production: First Drop in 2015

Natural gas producers at the Haynesville Shale will benefit from greater production. These include Anadarko Petroleum (APC), BHP Billiton (BHP), EP Energy (EPE), and EXCO Resources (XCO).

Anadarko Petroleum makes up 1.57% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

Haynesville rigs and production

According to the EIA, natural gas production at the Haynesville Shale increased 79% in the past eight years. In June 2015, the region produced 6.7 bcf per day of natural gas compared to ~3.7 bcf per day in June 2007.

The number of active rigs at the Haynesville Shale was 29 in June, up from 28 in May. A year ago, there were 49 drilling rigs in the region. It’s important to note that most of the Haynesville Shale rigs are horizontal in trajectory.

For more on the latest movements in horizontal and vertical rig counts, read Horizontal Rigs Take a U-Turn to Decline Again in Week of July 10.

Production per rig

From June 2007 to June 2015, natural gas production per rig at the Haynesville Shale increased from ~1 MMcf (million cubic feet) per day to 5.92 MMcf per day, or by 4.7 times. In the 12 months leading up to June 2015, natural gas production per rig increased 33%.

Short-term correction in the cards?

Crude oil and natural gas production at key US shales has increased in the past few years. But the EIA’s projections suggest that production may decrease or stagnate at many of these shales within the next two months.

In the next two parts of this series, we’ll review the EIA’s crude oil and natural gas production forecasts at the major US shales.