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Western Haynesville Play Yields Monster Gas Wells

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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.

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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.




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