Improved technology and innovation have pumped new life into the Haynesville Shale as a natural gas source.
But, according to Bill DeMis, it has done much more than that.
“The Haynesville is going to be the swing producer that sets the price of natural gas in the U.S.,” said DeMis, former senior vice president and chief geologist at Goldman Sachs.
“Clearly, new technology and innovations in the Haynesville (shale play) are driving the play to higher profitability, despite flat natural gas prices,» said DeMis. “The techniques being refined in the Haynesville will ultimately propagate to less-profitable tier-2 and tier-3 shale plays. These second tier shale plays will become the resource drivers of tomorrow.”
DeMis said new “super-sized” hydraulic fracturing methods, access to pipeline and LNG export, have turned the Haynesville into a profitable monster.
The “super-sized” fractures involve pumping two tons or more of sand per foot into the horizontal wells.
Moreover, existing Hayneville wells that have been re-fractured using new methods are on track to produce more gas than the original well completion.
The re-emergence of the Haynesville, along with other Gulf Coast resource plays, has inspired an AAPG Playmaker Forum, chaired by DeMis and scheduled for April 26 at the Marathon Conference Center in Houston. The theme is “Haynesville and Re-emerging Resource Plays of the Gulf Coast.”
While the Haynesville story will be the focus of the forum, other resource plays of the Gulf Coast, such as the Austin Chalk and Eagle Ford, will also be highlighted during the one-day meeting. Speakers will detail the formations’ geology, the economics, and the evolution of the improved fracturing designs.
The forum includes more than a dozen speakers from oil and gas majors, independents and investment bankers. Thomas Bowman, president of TDB Oil Corporation, will co-chair the event.
DeMis said the new hydraulic fracturing methods driving the resurgence are especially exciting.
“The Haynesville came online in 2008. By 2010, the bloom came off the rose,” he said.
Peaking at more than 200 wells, the play fell off until about the middle of 2016, DeMis explained.
“Wells were expensive to drill and the Marcellus shale land-rush sucked the air, and money, out of the room,” he added.
Today, Haynesville rigs rates are rising and production per well has doubled, he said.
In late 2016, Chesapeake Energy made headlines with a Haynesville well, dubbing the project “Propageddon,” DeMis noted.
The record-setting project used more than 25,000 tons of sand in a single well: “It was incredible – output from the well increased 70 percent over traditional frac’ing techniques,” Jason Pigott, vice president of operations, said during a presentation.
The monster dose of sand is able to prop open more and larger cracks in the rock, freeing more gas.
Longer lateral drilling also helps with efficiency of cost.Drilling longer laterals takes more than just whimsy, DeMis said.
DeMis called the frac’ing revolution “a true, industry-disruptive technology, similar to the impact that Uber had on transportation or Amazon had on retail marketing.”
“We’re seeing American ingenuity and innovation in resource plays leading to the insourcing of jobs back to the U.S. because companies know they have a continuous commodity supply at a reliable price,” he said.
Goodrich Petroleum Chief Operating Officer Robert Turnham Jr., who will be speaking at the forum, told Natural Gas Intel: “All things being equal, longer is better and more proppant is better, at least in the Haynesville. As far as choking these wells back, we think it’s an integral part of ultimately getting the maximum recovery of the resource in place and we limit our drawdown to roughly 30, maybe as much as 50 psi per day. Simply put, it’s just being gentle on the formation by not pulling the well too hard.”
Revising Resource Estimates
Demis said a 2010 United States Geological Survey assessment put the amount of resources in the Bossier and Haynesville in the Gulf Coast Basin at 70 trillion feet of cubic gas, but a new report released in April 2017 attributes over 300 TCFG for the Bossier and Haynesville across the entire Gulf Coast, from Florida to Mexico.
“As the USGS revisits many of the oil and gas basins of the United States, we continually find that technological revolutions of the past few years have truly been a game-changer in the amount of resources that are now technically recoverable,» said Walter Guidroz, program coordinator of the USGS Energy Resources Program.
“It’s amazing what a little more knowledge can yield,” said USGS scientist Stan Paxton, lead author of the assessment.
The EIA estimates the Haynesville Shale has 147 TCFG of commercially recoverable gas, Demis said.
Moreover, with the infrastructure already in place in the region, “There will always be a market for Haynesville gas,” he said.
DeMis said the Haynesville is here to stay.