New exploratory drilling in the Western Haynesville play is yielding monster natural gas wells with initial production (IP) rates well above the average for East Texas, contributing to oversupply in the market.
East Daley Analytics incorporates well performance trends in our basin Production Scenario Tools and midstream asset analysis. According to our latest well data, IP rates for East Texas wells currently average 11.7 MMcf/d. However, in Robertson County northwest of Houston, production from Aethon Energy’s latest three wells is averaging 22.4 MMcf/d, according to Texas Railroad Commission reports.
Comstock Resources (CRK) is also exploring in the Western Haynesville trend and has reported excellent results from its initial drilling program. CRK recently tested its sixth and seventh completed wells, Cazey MS and Lanier #1, at IP rates of 34 MMcf/d and 35 MMcf/d, respectively.
East Daley monitors the emerging Western Haynesville as part of the ArkLaTex Basin Forecast and Macro Gas Supply and Demand Forecast. Robust production from the Haynesville is contributing to supply growth and helping push Henry Hub prices below $2/MMBtu.
In 2022, Comstock acquired from Legacy Reserves several midstream assets in East Texas, including the Pinnacle gathering and treating system and the Bethel processing plant. On CRK’s 3Q23 earnings call, management reported the Pinnacle system has a treating capacity of up to 500 MMcf/d, and said it expects to fill that capacity by 2025.
Plant data tracked by East Daley shows inlet gas volumes through the Bethel plant grew rapidly in the second half of 2023, averaging 105 MMcf/d in December ’23 (see figure). Recent flows would still leave plenty of upside for CRK to grow volumes at the system’s current design capacity.
CRK is partnering with Quantum Capital Solutions to expand the Pinnacle system’s gathering capacity up to 2 Bcf/d. QL will contribute 100% of the capital required, up to $300MM, for the system’s development, and Comstock will operate the venture as Pinnacle Gas Services. The project would create plenty of upside for growth from the emerging Western Haynesville play. – Oren Pilant Tickers: CRK.
New Webinar: How Louisiana Will Reshape the Gas Market
Join East Daley and Rextag on February 27 for a new natural gas webinar. In “Ripple Effect: How Louisiana Will Reshape the US Gas Market,” Rextag and East Daley examine the key state corridor for natural gas. We trace the ripple effect across the US as we plunge into a more volatile and dynamic gas market. Join us February 27.
New EDA Product: West Coast Supply & Demand
The West Coast Supply & Demand report is your go-to resource for mastering the energy market from the California coast to the western Colorado Rockies. This dynamic product offers extensive regional coverage, precise production forecasts for key basins, and in-depth pricing analysis, specifically examining the Colorado pricing spread from CIG Mainline to NW Pipeline Rockies.
Stay ahead of the competition with strategic insights, ensuring you make informed decisions and capitalize on emerging opportunities. Elevate your business with unparalleled market intelligence – invest in the West Coast Supply & Demand report today.
New EDA Product: Houston Ship Channel Supply & Demand
The Houston Ship Channel Supply & Demand report allows users to dive deep in understanding, and monitoring Houston Ship Channel natural gas dynamics. The product contains monthly updates of relevant price spreads, pipeline flows, production and demand estimates affecting the South Texas market, with forecasts extending 5 years into the future. Learn more about the Houston Ship Channel Supply & Demand report.
Energy Data Studio
East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.
Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.
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 insight@eastdaley.com.
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