The Daley Note: July 12, 2023
Haynesville producers are slashing rig counts fast, bringing activity more in line with East Daley’s expectations at the start of 2023. Since March, East Daley has seen rig counts fall by 16, from 77 to 61 in East Texas and northern Louisiana.
At the system level, the two largest public G&P systems have seen major declines, according to G&P system rig allocations in Energy Data Studio. Energy Transfer’s (ET) Enable Haynesville system has seen the largest decline, from 9 rigs in early March to just 4 in early July. WMB - Louisiana Magnolia has seen activity fall from 10 rigs to 5 in the same span. Chesapeake (CHK), a major producer on both systems, has pulled 4 rigs off WMB – Louisiana and 3 rigs off ET- ENBL Haynesville.
Momentum Midstream has also seen a 5-rig decline, mostly by Aethon and other small privates. However, in recent weeks, Momentum has seen 3 rigs added by private producer Barrow-Shaver Resources, following a trend of private rig adds on the East Texas side of the basin. (Note: East Daley counts an additional 8 Texas counties beyond Baker Hughes, in which rigs are up from 7 in January to as high as 15 in June.)
We currently predict a 9% increase in average ArkLaTex gas production from 2022 to 2023. Yet if rigs were held flat at 61 through December 2023 in the basin PST, our model shows production would decline 6% from 2023 to 2024 (avg).
Starting with a slight decline of 90 MMcf/d in June, we currently expect ArkLaTex gas production to decline through March 2024, based on our latest rig forecast. We see a ~3-month lag between when rigs decline and production starts to fall. – Oren Pilant
East Daley, Rextag to Host Webinar on Natural Gas Infrastructure
East Daley Analytics will be cohosting a webinar this Thursday with our friends at Rextag. In “The Big Squeeze: The Players Driving Natural Gas Growth,” we will profile several leading G&P systems in the Permian Basin. The webinar will take place Thursday, July 13 at 10:00 PM CDT. Register here to join the discussion.
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Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact email@example.com.
Review the Year Ahead in Dirty Little Secrets
The 2023 Dirty Little Secrets is Now Available! Is Midstream on the cusp of another infrastructure wave? Find out in our new annual report.
Dirty Little Secrets reviews the outlook for Midstream and commodity markets in 2023 and the years ahead. East Daley discusses the outlook for crude oil, natural gas and NGLs and the impacts to midstream assets in our 2023 Dirty Little Secrets annual market report. Click here for a copy of the 2023 Dirty Little Secrets report.
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