Featured Discussions - GoHaynesvilleShale.com2024-03-29T13:52:35Zhttps://gohaynesvilleshale.com/forum/topic/list?feed=yes&xn_auth=no&featured=1Life of Haynesville Shaletag:gohaynesvilleshale.com,2023-07-27:2117179:Topic:40441012023-07-27T00:01:41.510ZMichael Lowehttps://gohaynesvilleshale.com/profile/MichaelLowe
<p>Any ideas on how much life or gas is left in this shale play????</p>
<p>Any ideas on how much life or gas is left in this shale play????</p> Albemarle brine/O&G lease offer 2023tag:gohaynesvilleshale.com,2023-07-24:2117179:Topic:40439092023-07-24T16:10:03.045ZJoe Deerhunterhttps://gohaynesvilleshale.com/profile/JoeDeerhunter
<p>Hello Columbia County!</p>
<p>It has been several years since I posted to GHS, please excuse my absence while activity died down.</p>
<p>However, I recently got an offer from Albemarle for incidental minerals (oil & gas I assume) on some mineral rights acres I own in the vicinity of Village. I don't think I own surface rights but apparently have about 7.5 net mineral acres interest on a 40 A tract.</p>
<p>The offer is for $100 per et mineral acre, 3/16 royalty, on a 3-year…</p>
<p>Hello Columbia County!</p>
<p>It has been several years since I posted to GHS, please excuse my absence while activity died down.</p>
<p>However, I recently got an offer from Albemarle for incidental minerals (oil & gas I assume) on some mineral rights acres I own in the vicinity of Village. I don't think I own surface rights but apparently have about 7.5 net mineral acres interest on a 40 A tract.</p>
<p>The offer is for $100 per et mineral acre, 3/16 royalty, on a 3-year term.</p>
<p>Questions: </p>
<p>Is this the current standard offer of this sort?</p>
<p>Is there an opportunity to negotiate for more bonus and/or royalty here?</p>
<p>Is it worth involving lawyers for this small amount?</p>
<p>Can I gain anything by calling the land department myself and asking for better terms?</p>
<p></p> Natural gas now a prized resource in the US shale patchtag:gohaynesvilleshale.com,2022-09-28:2117179:Topic:40335792022-09-28T15:29:27.559ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p><a href="http://r.smartbrief.com/resp/pAdWDnoIuouquvhsfEfEbgfCPgZv?format=multipart"></a></p>
<p><span style="font-size: 14pt;"><strong>Dregs of Texas Oil Patch Are More in Demand Than Crude Itself</strong></span></p>
<p><span style="font-size: 12pt;">David Wethe and Kevin Crowley, Bloomberg News</span></p>
<p><span style="font-size: 12pt;">(Bloomberg) -- In the hydrocarbon-rich fields of Texas, natural gas was always treated like the dregs that crews had to deal with as they pulled oil out…</span></p>
<p><a href="http://r.smartbrief.com/resp/pAdWDnoIuouquvhsfEfEbgfCPgZv?format=multipart"></a></p>
<p><span style="font-size: 14pt;"><strong>Dregs of Texas Oil Patch Are More in Demand Than Crude Itself</strong></span></p>
<p><span style="font-size: 12pt;">David Wethe and Kevin Crowley, Bloomberg News</span></p>
<p><span style="font-size: 12pt;">(Bloomberg) -- In the hydrocarbon-rich fields of Texas, natural gas was always treated like the dregs that crews had to deal with as they pulled oil out of the ground. The two often emerge from wellheads together, and so for decades drillers would simply burn off the gas or sell it at cost. Oil, and all the riches that came with it, was always the big prize.</span></p>
<p><span style="font-size: 12pt;">Now, in a sign of just how much Russia’s invasion of Ukraine has thrown global energy markets into disarray, it’s natural gas, not oil, that’s becoming more coveted in US shale fields. With Europe desperately seeking alternatives to Russian gas that powered furnaces and electricity grids, prices are skyrocketing and US drillers are scrambling to extract, liquefy and ship more of it overseas.</span></p>
<p><span style="font-size: 12pt;">US energy companies are expanding the search for gas at the fastest pace since 1992. Domestic prices for the fuel already have climbed more than 80% this year and the bullish drivers don’t appear likely to fade any time soon: record domestic production isn’t keeping up with surging demand at home and overseas.</span></p>
<p><span style="font-size: 12pt;">Prices have climbed even more dramatically in Europe as Russian President Vladimir Putin clamps down on gas shipments to nations opposed to his war in Ukraine -- all against the backdrop of rising global competition for a cleaner alternative to coal, as well as the increasing drag on power supplies amid the rise of electric cars.</span></p>
<p><span style="font-size: 12pt;">European buyers in recent weeks were paying the equivalent of more than $90 per million British thermal units for gas. Convert that energy into crude and that’s about $550 a barrel -- more than six times the price American drillers can command for their oil. Little wonder then that US gas drilling has soared more than 50% this year. </span></p>
<p><span style="font-size: 12pt;">Meanwhile, US oil drilling has only risen 25% this year, according to Baker Hughes Co., a reflection of the much weaker performance of the underlying commodity relative to gas. Benchmark US crude prices have advanced less than 3% since the end of 2021.</span></p>
<p><span style="font-size: 12pt;">“The commodities folks have somewhat ignored the big growth that we’ve seen in the gas-rig count versus last year,” Leo Mariani, an Austin-based analyst at MKM Holdings LLC, said in a phone interview. “It seems like oil’s gotten hit hard over concerns over the economy recently and gas has quietly just done really well on a relative basis this year.”</span></p>
<p><span style="font-size: 12pt;">Oil has for decades been a far more profitable target for drillers relative to gas. But that axiom has been turned on its head as the advent of the US gas-export sector enabled American companies to capitalize on overseas price spikes heretofore beyond their reach. </span></p>
<p><span style="font-size: 12pt;">The math is compelling. The forward prices on which explorers base drilling decisions have advanced much more dramatically for gas than oil this year. Gas to be delivered two years from now has climbed 50% from the end of last year, compared with a 5.8% rise for US crude over the same time span.</span></p>
<p><span style="font-size: 12pt;">Some of the biggest US shale specialists are shifting more of their production mix to gas at the expense of crude. Callon Petroleum Co., Continental Resources Inc. and Pioneer Natural Resources Co. are among drillers that have switched more than 10% of their overall output to gas from oil, according to data compiled by Bloomberg.</span></p>
<p><span style="font-size: 12pt;">There are a number of factors at play, including a crackdown on so-called flaring in remote regions as well as the natural process whereby aging wells pump out a greater concentration of gas versus crude as time goes by. The capture of formerly flared gas has been largely driven by the environmental, social and governance movement.</span></p>
<p><span style="font-size: 12pt;">“Investors are more supportive of the gas narrative, both from an ESG standpoint and an investment standpoint,” said Ben Dell, co-founder and managing partner at Kimmeridge Energy Management. “As a result, becoming incrementally gassy hasn’t been punished.”</span></p>
<p><span style="font-size: 12pt;">Energy stocks have increased more than 25% this year, compared with a 23% loss for the broader S&P 500 Index. And yet, analysts such as Vince Piazza at Bloomberg Intelligence still see muted enthusiasm for gas among equity investors.</span></p>
<p><span style="font-size: 12pt;">“It’s underrepresented in a lot of portfolios,” he said. </span></p> What $9 Natural Gas Means for the Haynesville Land/Mineral Owner--My Top 10tag:gohaynesvilleshale.com,2022-08-16:2117179:Topic:40328882022-08-16T12:00:59.387ZShaleGeohttps://gohaynesvilleshale.com/profile/ShaleGeo
<p>1. Most new wells will be 7500'-10000'K CUL's drilled to within the known boundaries of the HA and BO Shales. Some shorter laterals may be drilled due to offset operator ownership or previous legacy wells. </p>
<p>2. Land/Mineral Owners need to educate themselves on the drilling and completion of these wells as the pay deck is based on allocation by perforated foot. Sections share the production based on this allocation. </p>
<p>3. Many of these wells are drilled from surfaces in other…</p>
<p>1. Most new wells will be 7500'-10000'K CUL's drilled to within the known boundaries of the HA and BO Shales. Some shorter laterals may be drilled due to offset operator ownership or previous legacy wells. </p>
<p>2. Land/Mineral Owners need to educate themselves on the drilling and completion of these wells as the pay deck is based on allocation by perforated foot. Sections share the production based on this allocation. </p>
<p>3. Many of these wells are drilled from surfaces in other sections before the lateral is begun so the permitting process can be confusing--download the location plat to see the actual path of the wellbore. Just because the surface is in Section 32 does not mean that Section 32 will share in the wells production. </p>
<p>4. With this in mind, many landowners can receive additional bonuses from subsurface easements and well pad rentals that may be out of the unit being drilled. </p>
<p>5. New pipelines are being laid all across the Haynesville--if you allow a pipeline under your property keep in mind that this document is just as important as a lease agreement and use professional representation if needed. </p>
<p>6. Many operators are allowing the more active operator in the section to drill in a shared section so it may not be "your" operator that actually drills the well. Pay attention.</p>
<p>7. Learn to navigate Sonris for LA land/mineral owners. It is free and has most all of the information you need. I have no advice for the Texas side--my attempts at the RRC website have not been good. </p>
<p>8. The decline of the new, properly drilled and completed, CUL's in the core are vastly different than the original legacy single section laterals. Make sure you are educated to these volumes. Not all operators drill and complete the same kind of wells. The type of completion will make a difference in the EUR (estimated ultimate recovery). </p>
<p>9 Monitor old legacy wells for production. If an operator sees a well approaching an economic limit they may do a re frac to boost production and delay CUL's. </p>
<p>10. Enjoy this period of good natural gas prices and thank God you don't live in Europe this winter. Due to a myriad of mis- steps (some natural, some political, some environmental) there is a chance Germany el al runs out of NG this winter. </p> Court Rules Operator Falsified Test and Production Reports to Maintain Leasetag:gohaynesvilleshale.com,2022-03-29:2117179:Topic:40174742022-03-29T20:19:42.839ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p> There were many old depleted wells that were reporting production to the state that served to hold in force old "all depths” O&G leases with a one eighth royalty. Some of those old leases became incredibly valuable when the Haynesville Shale land rush commenced. The operators were able to assign the "deep rights" under their leases for a royalty difference between the one eighth owed to their mineral lessors and the royalty that Haynesville operators were willing to pay - 25 to 30%. …</p>
<p> There were many old depleted wells that were reporting production to the state that served to hold in force old "all depths” O&G leases with a one eighth royalty. Some of those old leases became incredibly valuable when the Haynesville Shale land rush commenced. The operators were able to assign the "deep rights" under their leases for a royalty difference between the one eighth owed to their mineral lessors and the royalty that Haynesville operators were willing to pay - 25 to 30%. Needless to say, this was a windfall that was worth hundreds of millions of dollars for those operators.</p>
<p>The case in question here is Ganey versus Cupstid and involves a surface owner that sued to have a mineral servitude cancelled due to fraudulent production reporting by the well operator. Not only did the fraudulent reporting serve to support a claim that the lease had survived until the Haynesville Shale came along but it served to keep a mineral servitude from expiring. The court ruled that the lease had expired and the servitude was not maintained. </p>
<p>The ruling in this case is important in that if it survives any appellate challengers and becomes set case law, it will open the door to similar plaintiffs who were denied ownership of the mineral rights underlying their surface ownership in instances where a depleted well was reported productive by way of falsified reports to the state. The judgement sets out the specific facts and arguments of the case and provides a good test for those who may feel that they have been similarly disadvantaged.</p>
<p>Although Ganey versus Cupstid was an effort to extinguish a mineral servitude, the survival of an O&G lease based on fraudulent test reports or reported monthly production volumes was addressed by the court in determining the status of the servitude. I suspect that many mineral owners under an O&G lease who did not receive royalty payments in the years leading up to the Haynesville Shale Play may also have cause to question whether their leases should rightfully have expired affording them the opportunity to execute a new lease when the Haynesville Shale created substantial increases in per acre bonuses and royalty fractions.</p>
<p>The ruling is too long to be attached here under the limits imposed by the architecture of the website. My Friends can contact me at my business email address available on my personal page if they would like a copy of the ruling.</p> Chesapeake To Acquire Vine Energytag:gohaynesvilleshale.com,2021-08-11:2117179:Topic:39915632021-08-11T12:07:53.555ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Chesapeake Energy Corporation Consolidates Haynesville With At- Market Acquisition Of Vine Energy Inc.</p>
<p>OKLAHOMA CITY, Aug. 11, 2021 /<a href="http://www.prnewswire.com/">PRNewswire</a>/ -- Chesapeake Energy Corporation (NASDAQ:CHK) ("Chesapeake") and Vine Energy Inc. (NYSE:VEI) ("Vine") today announced that they have entered into a definitive agreement pursuant to which Chesapeake will acquire Vine, an energy company focused on the development of natural gas properties in the…</p>
<p>Chesapeake Energy Corporation Consolidates Haynesville With At- Market Acquisition Of Vine Energy Inc.</p>
<p>OKLAHOMA CITY, Aug. 11, 2021 /<a href="http://www.prnewswire.com/">PRNewswire</a>/ -- Chesapeake Energy Corporation (NASDAQ:CHK) ("Chesapeake") and Vine Energy Inc. (NYSE:VEI) ("Vine") today announced that they have entered into a definitive agreement pursuant to which Chesapeake will acquire Vine, an energy company focused on the development of natural gas properties in the over-pressured stacked Haynesville and Mid-Bossier shale plays in Northwest Louisiana. The acquisition is a zero premium transaction valued at approximately $2.2 billion, based on a 30-day average exchange ratio as of Tuesday's close, equating to $15.00 per share.</p>
<p>Transaction highlights include:<strong><em> </em></strong></p>
<ul>
<li><strong><em>Vine shareholders will receive fixed consideration of 0.2486 shares of Chesapeake common stock plus $1.20 cash per share of Vine common stock, for total consideration of $15.00 per share, comprising of 92% stock and 8% cash</em></strong></li>
<li><strong><em>Increases Chesapeake's cumulative five-year free cash flow<sup>(1)</sup> outlook by approximately $1.5 billion, or 68% of the transaction value, to approximately $6.0 billion, or 66% of pro forma enterprise value</em></strong></li>
<li><strong><em>Immediately accretive to operating cash flow per share, free cash flow<sup>(1)</sup> per share, free cash flow yield<sup>(1)</sup>, and GHG emissions profile</em></strong></li>
<li><strong><em>2022 pro forma net debt-to-EBITDAX<sup>(1)</sup> ratio of 0.6x, preserves Chesapeake's balance sheet strength</em></strong></li>
<li><strong><em>Approximately $50 million in average annual savings expected from operating and capital synergies</em></strong></li>
<li><strong><em>Expected to increase base dividend by 27% to $1.75 per share post close reflecting cash flow accretion of transaction, subject to Board approval</em></strong></li>
<li><strong><em>Vine position consolidates Haynesville/Bossier adding approximately 370 premium 50% rate of return drilling locations at $2.50 NYMEX gas price</em></strong></li>
<li><strong><em>Lowers Chesapeake's pro forma total gathering, processing and transportation (GP&T) expense by approximately 15% and diversifies the company's midstream partnerships</em></strong></li>
</ul>
<table>
<tbody><tr><td><p><em>(1) Non-GAAP financial measures defined below.</em></p>
</td>
</tr>
</tbody>
</table>
<p>Mike Wichterich, Chesapeake's Board Chairman and Interim Chief Executive Officer, commented, "This transaction strengthens Chesapeake's competitive position, meaningfully increasing our free cash flow outlook and deepening our inventory of premium gas locations, while preserving the strength of our balance sheet. By consolidating the Haynesville, Chesapeake has the scale and operating expertise to quickly become the dominant supplier of responsibly sourced gas to premium markets in the Gulf Coast and abroad."</p>
<p>Eric Marsh, Vine's Chairman, President, and Chief Executive Officer said, "We firmly believe that the quality of our assets, combined with the scale, depth and diversity of Chesapeake's portfolio, and our shared unwavering commitment to ESG excellence, provides significant opportunity to accelerate the return of capital to our combined shareholders."</p>
<p>David Foley, Global Head of Blackstone Energy Partners added, "We believe in the benefits of consolidation. Blackstone looks forward to being a Chesapeake shareholder and participating fully in the significant value creation potential that will be unlocked by the combined company."</p>
<p><strong><u>Transaction Details</u></strong></p>
<p>Under the terms of the merger agreement, which was unanimously approved by the Board of Directors of each company, Vine shareholders will receive a fixed exchange ratio of 0.2486 Chesapeake shares of common stock and $1.20 of cash for each share of Vine common stock owned. Upon closing, Chesapeake shareholders will own approximately 86% and Vine shareholders will own approximately 14% of the fully diluted shares of the combined company.</p>
<p>The transaction, which is subject to customary closing conditions, including certain regulatory approvals, and the approval of Vine shareholders, is expected to close in the fourth quarter of 2021. Funds managed by The Blackstone Group Inc. own approximately 70% of outstanding shares of Vine common stock and have entered into a support agreement to vote in favor of the transaction.</p>
<p><strong><u>Preliminary 2022 Pro Forma Outlook</u></strong></p>
<p>Pending the successful closing of the transaction in the fourth quarter of 2021, Chesapeake's preliminary plan is to operate 10 to 12 rigs in 2022, with 8 to 9 rigs focused on its gas portfolio and 2 to 3 rigs concentrating on its oil assets. The company will maintain its commitment to a disciplined capital reinvestment strategy, anticipating a 2022 reinvestment rate of 50 – 60%. At NYMEX strip pricing as of July 30, 2021, this preliminary capital program is anticipated to generate between $2.55 billion to $2.75 billion in total adjusted EBITDAX. Chesapeake also anticipates this preliminary capital program will result in its average annual 2022 oil production remaining flat from 2021 fourth quarter average levels. </p>
<table>
<tbody><tr><td colspan="5"><p><em>Updated 2021E – Preliminary 2022E Outlook</em> <sup>(2)</sup></p>
</td>
</tr>
<tr><td></td>
<td><p><strong>2021E CHK<br/> Previous</strong></p>
</td>
<td><p><strong>2021E CHK<br/> 8/10/21</strong></p>
</td>
<td><p><strong>2022E CHK</strong></p>
</td>
<td><p><strong>2022E CHK <br/> Pro Forma</strong></p>
</td>
</tr>
<tr><td><p>Oil Production (mmbbl)</p>
</td>
<td><p>23.0 – 25.0</p>
</td>
<td><p><strong>23.5 – 25.5</strong></p>
</td>
<td><p>20 – 22</p>
</td>
<td><p>20 – 22</p>
</td>
</tr>
<tr><td><p>Gas Production (bcf)</p>
</td>
<td><p>715 – 735</p>
</td>
<td><p><strong>725 – 745</strong></p>
</td>
<td><p>750 – 775</p>
</td>
<td><p>1,095 – 1,125</p>
</td>
</tr>
<tr><td><p>Total Production (mboe/d)</p>
</td>
<td><p>410 – 420</p>
</td>
<td><p><strong>415 – 435</strong></p>
</td>
<td><p>415 – 435</p>
</td>
<td><p>575 – 595</p>
</td>
</tr>
<tr><td><p>LOE per boe</p>
</td>
<td><p>$1.85 – $2.15</p>
</td>
<td><p>$1.85 – $2.15</p>
</td>
<td><p>$1.85 – $2.15</p>
</td>
<td><p>$1.65 – $1.95</p>
</td>
</tr>
<tr><td><p>GP&T per boe</p>
</td>
<td><p>$4.90 – $5.40</p>
</td>
<td><p>$4.90 – $5.40</p>
</td>
<td><p>$4.70 – $5.20</p>
</td>
<td><p>$3.90 – $4.40</p>
</td>
</tr>
<tr><td><p>G&A per boe</p>
</td>
<td><p>$0.85 – $1.15</p>
</td>
<td><p><strong>$0.75 – $0.95</strong></p>
</td>
<td><p>$0.75 – $0.95</p>
</td>
<td><p>$0.55 – $0.75</p>
</td>
</tr>
<tr><td><p>Adjusted EBITDAX<sup>(3)</sup> ($B)</p>
</td>
<td><p>$1.55 – $1.65</p>
</td>
<td><p><strong>$1.8 – $1.9</strong></p>
</td>
<td><p>$1.85 – $2.05</p>
</td>
<td><p>$2.55 – $2.75</p>
</td>
</tr>
<tr><td><p>Total Capex ($mm)</p>
</td>
<td><p>$670 – $740</p>
</td>
<td><p>$670 – $740</p>
</td>
<td><p>$900 – $1,200</p>
</td>
<td><p>$1,300 – $1,600</p>
</td>
</tr>
<tr><td><p>Reinvestment Rate</p>
</td>
<td><p>~44%</p>
</td>
<td><p>~38%</p>
</td>
<td><p>~54%</p>
</td>
<td><p>~55%</p>
</td>
</tr>
<tr><td><p>Enterprise Value ($B)</p>
</td>
<td></td>
<td></td>
<td><p>$7.0</p>
</td>
<td><p>$9.1</p>
</td>
</tr>
<tr><td><p>Net Debt<sup>(3)</sup> ($B) (6/30/21)</p>
</td>
<td></td>
<td></td>
<td><p>$0.6</p>
</td>
<td><p>$1.7</p>
</td>
</tr>
<tr><td><p>Fully Diluted Shares (mm)</p>
</td>
<td></td>
<td></td>
<td><p>116</p>
</td>
<td><p>135</p>
</td>
</tr>
</tbody>
</table>
<p> </p>
<table>
<tbody><tr><td colspan="3"><p><em>2022 Projected Multiples</em> <sup>(2)</sup></p>
</td>
</tr>
<tr><td></td>
<td><p><strong>2022E CHK</strong></p>
</td>
<td><p><strong>2022E CHK <br/> Pro Forma</strong></p>
</td>
</tr>
<tr><td><p>Operating Cash Flow per Share</p>
</td>
<td><p>~$16.10</p>
</td>
<td><p>~$18.50</p>
</td>
</tr>
<tr><td><p>FCF<sup>(3)</sup> / Fully Diluted Share</p>
</td>
<td><p>~$7.10</p>
</td>
<td><p>~$7.80</p>
</td>
</tr>
<tr><td><p>FCF Yield<sup>(3)</sup></p>
</td>
<td><p>13%</p>
</td>
<td><p>14%</p>
</td>
</tr>
<tr><td><p>Net Debt / EBITDAX<sup>(3)</sup></p>
</td>
<td><p>0.3x</p>
</td>
<td><p>0.6x</p>
</td>
</tr>
</tbody>
</table>
<p> </p>
<table>
<tbody><tr><td><p><em>(2) Based on 7/30/21 strip prices and 8/06/21 CHK stock price.</em></p>
</td>
</tr>
<tr><td><p><em>(3) Non-GAAP financial measures defined below.</em></p>
</td>
</tr>
</tbody>
</table>
<p><strong><u>Increasing Base Dividend and Establishing Variable Return Program</u></strong></p>
<p>Following completion of the transaction, Chesapeake expects to raise its base dividend by 27% to $1.75 per share as a result of the significant increase in free cash flow which reaches approximately $6 billion over the next five years. Additionally, Chesapeake announced the establishment of a variable return program to deliver 50% of the previous quarter's free cash flow to investors in cash, payable the following quarter, and beginning with results from the 2021 fourth quarter.</p>
<p><strong><u>Conference Call Information</u></strong></p>
<p>Chesapeake will conduct a conference call to discuss the transaction on Wednesday, August 11, 2021 at 9:00 am EDT. The telephone number to access the conference call is 888-317-6003 or 412-317-6061 for international callers. The passcode for the call is 2789084.</p>
<p><strong><u>About the Companies</u></strong></p>
<p>Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NASDAQ: CHK) operations are focused on discovering and responsibly developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States.</p>
<p>Vine Energy Inc., based in Plano, Texas, is an energy company focused on the development of natural gas properties in the stacked Haynesville and Mid-Bossier shale plays in the Haynesville Basin of Northwest Louisiana. The Company is listed on the New York Stock Exchange under the symbol "VEI".</p>
<p><strong> </strong></p>
<p> </p> Strong Haynesville well economics buoy outlook for drilling, productiontag:gohaynesvilleshale.com,2020-12-24:2117179:Topic:39517372020-12-24T19:16:34.323ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p><strong>Commodities 2021: Strong Haynesville well economics buoy outlook for drilling, production</strong></p>
<p>24 Dec 2020 | 16:43 UTC New York spglobal.com/platts</p>
<p></p>
<p><strong> </strong>Highlights</p>
<p>Henry Hub Calendar-21 curve trading in $2.70s/MMBtu</p>
<p>Haynesville half-cycle IRRs average 13% in November</p>
<p>Drilling returns to pre-pandemic level as rig count hits 47</p>
<p> </p>
<p>With Henry Hub gas priced in the upper $2s/MMBtu through 2021, strong drilling…</p>
<p><strong>Commodities 2021: Strong Haynesville well economics buoy outlook for drilling, production</strong></p>
<p>24 Dec 2020 | 16:43 UTC New York spglobal.com/platts</p>
<p></p>
<p><strong> </strong>Highlights</p>
<p>Henry Hub Calendar-21 curve trading in $2.70s/MMBtu</p>
<p>Haynesville half-cycle IRRs average 13% in November</p>
<p>Drilling returns to pre-pandemic level as rig count hits 47</p>
<p> </p>
<p>With Henry Hub gas priced in the upper $2s/MMBtu through 2021, strong drilling economics in the Haynesville play are making it the shale gas industry's most likely candidate for production growth in 2021.</p>
<p>As of late December, the Calendar-year 2021 forward curve at the Henry Hub continued to trade in the mid-$2.70s/MMBtu – down about 40 cents from an annual high in late October at $3.15/MMBtu, S&P Global Platts' M2MS data showed.</p>
<p>Despite the recent decline, data from S&P Global Platts Analytics suggested that even modestly lower gas prices at the Henry Hub could support robust drilling economics in the Haynesville.</p>
<p>In November, the rolling 12-month forward curve at Henry Hub averaged just $2.69/MMBtu. Over the same 30-day period, though, half-cycle internal rates of return in the Haynesville averaged about 13%, making the Texas-Louisiana play the third-most profitable drilling location in North America behind the Permian Delaware and the Permian Midland.</p>
<p>Assuming benchmark gas prices remain roughly around that level next year, a continued ramp-up in Haynesville drilling would spur significant in-basin production growth, likely outpacing gains in associated gas production from the Permian Basin.</p>
<h3><strong>Drilling, production</strong></h3>
<p>In late November, rig count in the Haynesville climbed to 47, its highest since Jan. 1, data published by Enverus DrillingInfo showed. That month alone, producers in the Haynesville added seven drilling rigs, making the it the only North American shale basin to fully restore drilling activity to pre-pandemic levels.</p>
<p>After bottoming out at just 31 rigs in May, the slow but steady ramp-up in Haynesville drilling activity over the summer has already begun lifting production there. In November, output averaged over 12.5 Bcf/d – up about 700 MMcf/d from an annual low in August, when producers turned out just 11.8 Bcf/d on average, Platts Analytics data showed.</p>
<p>Following November's steep build in drilling activity, the Haynesville now appears poised for growth in 2021.</p>
<p>A recent forecast from Platts Analytics showed Haynesville production growing by nearly 30% from December 2020 to December 2021. Over that same period, dry and associated gas production from most other North American shale basins is expected to contract. In fact, only the Marcellus and the Permian are expected to see net gains in gas production over the next 12 months, with significantly smaller volumetric gains that amount to growth rates of around 5% to 10%, annually.</p>
<h3><strong>Midstream outlook</strong></h3>
<p>In addition to the Haynesville's comparatively strong well economics, recent and upcoming pipeline expansion projects there should also allow production to grow unconstrained in 2021. According to Platts Analytics, the ongoing midstream buildout will preemptively debottleneck producer access to the premium Gulf Coast market, improving optionality and end-market price outcomes</p>
<p>Most recently, Gulf South initiated service on its Index 99 Expansion project in August, helping to address potential takeaway constraints linked to Haynesville production growth. The 22-mile pipeline provides up to 750 MMcf/d in firm transportation service from the East-Texas Haynesville to existing interconnects with Transcontinental Gas Pipe Line's Station 85 in Alabama and Sabine Pipeline's Henry Hub interconnect in Louisiana.</p>
<p>The Gulf South project joined the already operational 1 Bcf/d Louisiana Energy Access Project, or LEAP, which earlier in 2020 began offering producers serviced by the Blue Union Gathering System access to a new 150-mile, 36-inch pipeline corridor to the Gulf Coast.</p>
<p>A third project under development by Midcoast Energy, the 1 Bcf/d CJ Express, will also expand market access from the Haynesville with its own separate startup coming potentially by the first quarter of 2021.</p>
<p> </p>
<p> </p> Indigo making aggressive offers to purchase mineral rights.tag:gohaynesvilleshale.com,2020-10-08:2117179:Topic:39342132020-10-08T03:01:10.654ZRenee Brownhttps://gohaynesvilleshale.com/profile/ReneeBrown
I was recently contacted by a representative with Indigo, who I have current well contracts with. Two of the several wells have only been producing a few months. An initial offer was made, then he increased the offer by 20%, then offered an additional 33% when I seemed reluctant. Why would Indigo be so eager to increase their initial offer by 60%? I asked my O&G attorney what was going on up there but I haven’t been able to get much info. Anyone know if they are planning anything big in…
I was recently contacted by a representative with Indigo, who I have current well contracts with. Two of the several wells have only been producing a few months. An initial offer was made, then he increased the offer by 20%, then offered an additional 33% when I seemed reluctant. Why would Indigo be so eager to increase their initial offer by 60%? I asked my O&G attorney what was going on up there but I haven’t been able to get much info. Anyone know if they are planning anything big in DeSoto? Comstock in talks to buy Chesapeake's Haynesville assetstag:gohaynesvilleshale.com,2019-11-13:2117179:Topic:38647902019-11-13T12:58:41.402ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p><strong>Comstock in talks to buy Chesapeake's Haynesville assets - Reuters</strong></p>
<p>Nov. 13, 2019 7:27 AM ET|About: <a href="https://seekingalpha.com/symbol/CRK">Comstock Resources, Inc. (CRK)</a>|By: <a href="https://seekingalpha.com/author/sa-editor-carl-surran">Carl Surran</a>, SA News Editor</p>
<p>Comstock Resources (NYSE:<a href="https://seekingalpha.com/symbol/CRK">CRK</a>) is…</p>
<p><strong>Comstock in talks to buy Chesapeake's Haynesville assets - Reuters</strong></p>
<p>Nov. 13, 2019 7:27 AM ET|About: <a href="https://seekingalpha.com/symbol/CRK">Comstock Resources, Inc. (CRK)</a>|By: <a href="https://seekingalpha.com/author/sa-editor-carl-surran">Carl Surran</a>, SA News Editor</p>
<p>Comstock Resources (NYSE:<a href="https://seekingalpha.com/symbol/CRK">CRK</a>) is <a href="https://www.reuters.com/article/us-chesapeake-enrgy-haynesville-comstock/exclusive-comstock-in-talks-to-buy-chesapeakes-haynesville-assets-sources-idUSKBN1XN1HO">in late-stage discussions to buy</a> Chesapeake Energy's (NYSE:<a href="https://seekingalpha.com/symbol/CHK">CHK</a>) Haynesville shale assets in Louisiana in a deal that could be worth more than $1B, Reuters reports.</p>
<p>The companies have settled on a structure for the deal and hope to reach an agreement by the end of the year, according to the report.</p>
<p>CHK has been reducing its activity in the Haynesville region and said last week it was releasing its rigs and completion crews for the rest of the year.</p>
<p>CRK became the largest operator in Haynesville after buying privately held Covey Park in a $1.1B deal in June.</p> DeSoto Parish - Does anyone know anything about Aethon?tag:gohaynesvilleshale.com,2019-10-18:2117179:Topic:38605432019-10-18T14:26:20.209ZJudy McDanielhttps://gohaynesvilleshale.com/profile/JudyMcDaniel
<p>Aethon purchased QEP's mineral leases in DeSoto Parish, Section 8 - Township 13n - Range 12w effective 1/1/2019. Since then I notice on SonRis Aethon shows no production for the two wells in this section for February through May. They do show production for June and July. It also appears the State of Louisiana is fining them and I guess it is for lack of reporting. I am leased to Chesapeake for these two wells and it will come as no surprise to anyone that CHK has stopped paying…</p>
<p>Aethon purchased QEP's mineral leases in DeSoto Parish, Section 8 - Township 13n - Range 12w effective 1/1/2019. Since then I notice on SonRis Aethon shows no production for the two wells in this section for February through May. They do show production for June and July. It also appears the State of Louisiana is fining them and I guess it is for lack of reporting. I am leased to Chesapeake for these two wells and it will come as no surprise to anyone that CHK has stopped paying royalty. I am thinking about calling Aethon and asking about production but I thought I would ask you folks if you know anything about it first.</p>