GlobalData’s latest report, ‘Haynesville Shale in the US, 2019 – Gas Shale Market Analysis and Outlook to 2023’ analyses the appraisal and production activities for natural gas in the Haynesville shale play.
According to the Energy Information Administration (EIA), the US produced just under 81 billion cubic feet of gas per day (bcfd) in August 2019. The Appalachia Basin and the Haynesville accounted for over 50 percent of the total value. Appalachia Basin and Haynesville are currently showing an increase in their production level. The Appalachia Basin producing over 32 bcfd, and the Haynesville over 11 bcfd.
The demand of natural gas for conversion into LNG is focused on the United States Gulf Coast (USGC). Similarly, the growth of such demand is expected to steadily increase over the next five years. This is because there is approximately US$18.0 billion to be invested in planned LNG facilities in Texas and Louisiana. Furthermore, an additional US$7.9 billion is related to announced facilities which could further increase natural gas demand. Given the Haynesville proximity to the Gulf Coast, the natural gas produced will have easy access to market. Especially key are the LNG plants which will depend on gas produced in the region.
Prime location makes Haynesville shale attractive to investors
Haynesville shale play is spread across Northwest Louisiana and East Texas, covering an area of around 9,000 sq. miles. Importantly, the strategic location of this shale play is ideal. It is near to some of the world’s largest petrochemical complexes, LNG export facilities, and importantly, the Gulf of Mexico. This proximity makes it one of the most revenue-generating shale plays in the US. Also, the key facilities around the shale formation help in rapid ‘spud-to-sale’ cycle time. Because of this it is even more attractive to the investors. In 2018 the most active producing areas in the Haynesville shale were De Soto, Caddo, Red River, and Bossier parishes in Louisiana and San Augustine County in Texas.
According to data sourced from the Louisiana Department of Natural Resources (DNR) and the Railroad Commission of Texas (Texas RRC), Louisiana contributed to around 75-80 percent of the gross natural gas production in the Haynesville shale during 2013 and 2018. The gross production of natural gas in Louisiana and Texas were reported to be approximately 5,295.2 mmcfd and 1,319.1 mmcfd, respectively, in 2018. Chesapeake Energy, Indigo Natural Resources, Comstock Resources, BP and Range Resources were the leading producers in Haynesville shale in 2018.