After Drop in Activity, Haynesville Shale Sees Resurgence

Abstract

What was once old is now new again in US natural gas production. Once a crown jewel of shale in the US, the Haynesville has seen a resurgence in activity after a steady drop. Now, as natural gas consumption increases and the oil price remains low, companies are taking advantage of a potentially valuable opportunity in the area. Located in east Texas and northern Louisiana (Fig. 1) the Haynesville was the largest US producer of shale gas. In November 2011, it averaged a record high production of 10.4 Bcf/D—but as natural gas prices decreased in the years leading to the oil price downturn, other plays in the Appalachian region of the US such as the Marcellus and the Utica began to surpass it in production. By 2015, shale gas production in relatively liquids-rich areas such as the Eagle Ford and the Permian were also producing more than the Haynesville. The demise of the Haynesville appeared to be short-lived, though. In the past 18 months, the US Energy Information Administration (EIA) noted significant increases in drilling activity and well production rates, which have raised overall natural gas production in the region. Natural gas production reached 6.9 Bcf/D in September after remaining near 6.0 Bcf/D on average for the past 3 years. Beyond the Numbers Fig. 2 highlights some of the trends in the Haynesville. The EIA projected natural gas production to increase by 146 MMcf/D from October to November 2017. Rig count has nearly doubled from 2015 to the end of 2017. A drop in well costs has helped drive the surge in activity. In 2014, the Haynesville had the most expensive costs in the US primarily because of the challenges its fuel-bearing rocks presented. The formations were among the deepest in the country, with some as deep as 15,000 ft. In the Appalachian region, wells are in areas where formations range from 2,000- to 12,000-ft depth. The shale formation thickness in the Haynesville is slightly narrower than other US shale plays as well, ranging from 100 to 350 ft. In addition, the high pressure and temperature conditions led to stimulation treatments consisting of high-strength proppant and more thermally stable fluids. These fluids consisted of large polymer loadings of guar and sometimes derivatized guar gelling agents. Higher-quality resin-coated and ceramic prop-pants were commonly pumped as the primary proppant, increasing costs and forcing companies to adopt a strategy of “quality over quantity” in terms of production volumes (SPE 187315).