Operators are drilling up the Haynesville despite the increase in well costs and commodity spread. Has activity decreased? Of course. With the deepest wells costing around $10MM per, only the best wells will be attractive.
This entry looks at TX Haynesville activity. Specifically, a quick snapshot of permitting and production. Ill just post the slides below.
The total depth graph shows the depths increase as you venture south in the SW extension. The permit chart shows the peak of Haynesville activity in early 2010. Although the wells permits fall off during 2010, the SW extension wells stay relatively constant using the “eye test”. The North wells however, drop off significantly.
EnCana and others are experimenting with ways to cut costs. EnCana has saved over %15 using drilling pads at their “Gas Factory” locations. EOG said they will try to transfer the Hiway fracs to the Haynesville, they are apparently cheaper than hybrid. Even though the Haynesville is expensive, the gas is not going anywhere. Operators are interested in shoring up this proved gas in place, its just a matter of the price.