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Haynesville Louisiana Drilling and Production Update 2012

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Abstract

Louisiana’s Haynesville shale has been actively developed since its discovery, but in recent years there has been rapid retrenchment in the region and a precipitous decline in the number of new wells drilled. Cheap credit, irrational exuberance, and risk taking have played key roles in the investment decisions of operators, but work remains to sustain production and make the play more efficient and successful to attract capital. To better understand the trade-offs in unconventional development, Louisiana’s Haynesville shale is used as a case study to evaluate trends in production profiles, expected recovery volumes, development cost, and operator performance. Average production profiles have improved from 2008 to 2012 reflecting better identification of sweet spots and improved completion designs. In 2008, the expected recovery volume for a Haynesville well was 2.3 Bcf, which by 2011 increased to 5.7 Bcf per well. About two-thirds of the 2,248 producing Haynesville wells circa March 2013 are expected to recover between 2.5 and 10 Bcf over their lifetime, and the total expected recovery volume from the current well inventory is estimated to be 13.9 Tcf. The average cost to develop one Mcf of Louisiana Haynesville shale reserves to the point of production is estimated to be $1.8/Mcf, and more than half of the March 2013 well inventory is expected to have development cost greater than $3/Mcf. This is the first time development cost has been computed for any play in the U.S. based on wellbore cost statistics.

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Notes

  1. See “Appendix” section for conversion from English to metric units.

  2. Delays between the end of completion and the start of production occur if the operator is waiting on orders, pipeline, permits, testing, etc.

  3. Multiple-well LUWs have more than one well drilled on the unit, presumably because the geologic or economic conditions warrant multiple wells, and so we might expect the average well on a multiple-well LUW to be better than the average well on a single-well LUW, assuming all other conditions the same. If lower quality geology or economics forces multiple development wells, then we would expect lower average performance characteristics.

  4. Better forecast models exist that are aligned with the physics of the reservoir and fluid flow, but the incremental improvement relative to the additional time and effort to implement was not considered adequate.

  5. PUD reserves are known with a high degree of certainty, but capital expenditures have not been spent to “prove up” the reserves and are associated with greater development risk and are less valuable than producing reserves. SEC requirements loosened the traditional one offset allowances in 2008 if “reliable” technologies are applied when booking PUD volumes, but if not developed within 5 years, PUD reserves must be removed from the operator’s reserves disclosures and delisted.

  6. Active wells include producing, idle, and drilling in-progress wells.

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Authors and Affiliations

  1. Center for Energy Studies, Louisiana State University, Energy Coast & Environment Building, Nicholson Extension Drive, Baton Rouge, LA, 70803, USA

    Mark J. Kaiser

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  1. Mark J. Kaiser
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Correspondence to Mark J. Kaiser.

Appendix

Appendix

Conversion Factors

1 ft = 0.31 m

1 mi = 1.61 km

1 sq mi = 2.59 sq km

100 ac = 40 ha

1 in = 2.54 cm

1 Tcf = 29.8 MMcm

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Kaiser, M.J. Haynesville Louisiana Drilling and Production Update 2012. Nat Resour Res 24, 33–51 (2015). https://doi.org/10.1007/s11053-014-9231-2

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