Despite a rig count that has declined significantly, production from the Haynesville Shale during June was climbing, which was reversing the impact of well shut-ins that began in February, an analysis by Bentek Energy LLC found.
"The trend, which coincided with an uptick in gas prices, suggests the shut-ins are allowing operators to change production levels in response to price and other market conditions," the Evergreen, CO-based firm said in a market note.
Bentek said that as of June 22 the Haynesville rig count had declined to 36, the lowest count seen since January 2008. However, the firm detected a production increase from its pipeline sample of activity of 382 MMcf/d, or 6%, to an average 6.3 Bcf/d. Between January and April production declined by nearly 600 MMcf/d following shut-in announcements from producers, Bentek said.
"In recent days, the sample has exceeded 6.5 Bcf/d, in line with December and January levels," Bentek said in its Weekly Southeast/Gulf Observer Report released Thursday. "The majority of the increase occurred on ETC Tiger and Acadian pipelines. In the sample by operator, Chesapeake-operated flows accounted for a majority of the increase in May and June, though it is possible that Chesapeake volumes fell at unreported intrastate meters. The balance of the increase was accounted for in the 'other' category, which mainly includes third-party gathering companies. Similar to the production trend, Henry Hub cash prices also hit a low in April of $1.94/MMBtu, and have since rebounded to an average $2.43 in May and $2.38 in June."
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