Oil and Gas Investor
Haynesville Fairway Expanding; Lease Terms Improving; More Pipe Under Way

Monday, August 31, 2009

The Haynesville fairway is expanding, with wells of more than 20 million cubic feet a day being reported from the Holly/Caspiana area by Chesapeake Energy Corp. and Exco Resources Inc

"Much of the early drilling was in the Elm Grove Field area. That’s where some of the highest-rate wells have been drilled to date," says Dr. Joel Walls, vice president and chief petrophysicist with Houston-based Object Reservoir Inc., which is leading the 12-producer Haynesville Collaborative Exploitation project.

"More recently, we’re seeing some very good wells in the Holly/Caspiana area. Moving closer to the border, in the Logansport area, there was a report by Comstock Resources Inc. of a 17 MMcf/d well, and going into Texas into Shelby, Nacogdoches, Harrison and Panola counties, we’re seeing some very good wells in that area, although not at the same initial rates as the wells in the Elm Grove area."

And take-away capacity? Justin Carlson, senior energy analyst for Denver-based energy-research firm Bentek Energy LLC, says, "There is ample capacity to move that gas." More pipe has been financed and is under way.

"You can see growth from 10 Bcf/d now to approximately 18 Bcf/d of new capacity that will be available for Haynesville producers to put their gas on. Now, it seems like a little bit of an overbuild…but these pipelines are important, some are essential…We can’t view Haynesville in a vacuum.

"The Haynesville area also has gas coming (through) from the Barnett, the Anadarko Basin, South Texas and the Gulf (Coast and Gulf of Mexico)…It’s important that these pipes get built…so Haynesville producers can gain a share of the U.S. natural gas market."

For a complete copy of this report from the Oil and Gas Investor, please click on the following link: http://www.chron.com/