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Geology News
Haynesville Shale Current Events

The American Petroleum Institute has a video that explains the horizontal drilling and hydraulic fracturing processes. It explains the drilling, fracturing, equipment, materials and environmental concerns.

This is an excellent video from an authoritative source.

A few years ago a number of LNG (liquefied natural gas) terminals were being planned to bring foreign natural gas into US markets. Then natural gas drillers began tapping shale reservoirs such as the Haynesville of Louisiana, the Barnett of Texas and the Marcellus of the Appalachian basin. The US natural gas and energy situations have been changed.

“Colorado School of Mines has announced the establishment of the Unconventional Natural Gas Institute (UNGI) for the upstream research and development of natural gas, which is clean-burning, helps minimize greenhouse gas emissions, and is in great supply in the United States.” Quoted from the Colorado School of Mines announcement.

An interesting article at the Financial Times website explores the topic of foreign companies investing in United States natural gas. Billion dollar investments have occurred in which foreign companies have bought major interests in the emerging shale gas plays.

The United States Department of Energy funded nine natural gas from shale projects. Most of them are intended to improve the management of hydraulic fracturing water at shale drilling sites or waste water treatment sites.

The amount of natural gas in storage has skyrocketed above the historic five year range. There is a lot of new gas entering the market and stocks are 517 billion cubic feet above the 5-year range.

The Energy Information Administration’s estimated average wellhead price for natural gas per Mcf for the past several months….

$4.16 February
$3.72 March
$3.43 April
$3.45 May
$3.45 June
$3.43 July

Natural gas producers have developed such a large production capacity and a deep resource base that the market now has an enormous overhang of natural gas that could take years to work off.

In a recent news release from Chesapeake Energy, data was provided on their expected yield for wells in the various shale plays. They expect the total yield from their Haynesville wells to be 6.5 bcfe, Fayetteville 2.4 bcfe, and Marcellus wells to yield 4.2 bcfe. These numbers might increase as technology improves.

The natural gas supply situation of the United States has improved with a rise in reserves of about 35% between 2006 and 2008. Unconventional gas from shale accounts for most of the increase.

A blog post on the Wall Street Journal website speculates on why the number of active rigs is up for the third week in a row.

Natural gas is under $4 per million BTU, down from a high of $13 one year ago. The Houston Chronicle has an article that reports on natural gas producers cutting their output in an effort to cut the supply of natural gas and thus increase prices.

Two members of Congress are working on a bill that would give the federal government regulatory authority over hydraulic fracturing. They are motivated by a concern for ground water protection. Drillers are concerned that new federal regulations will cause permitting delays and increased costs.

Although North Carolina has no current oil or natural gas production, drilling methods developed in other states might be used to tap natural gas reservoirs beneath several North Carolina counties. The Cumnock Formation of the Deep River Basin and the Cow Branch Formation of the Dan River Basin both contain organic-rich shales that might yield commercial quantities of natural gas.

Mineralweb.com has a lot of short articles and links to resources related to mineral rights, oil and gas leasing, royalties, taxes and more.

“The U.S. Department of Energy (DOE) announces the release of Modern Shale Gas Development in the United States: A Primer. The Primer provides regulators, policy makers, and the public with an objective source of information on the technology advances and challenges that accompany deep shale gas development.” Quoted from fossil.energy.gov.

A news release by the Ziff Energy Group says that the unconventional gas plays now active across North America will account for 53% of the continent’s gas production by 2020.

The New Alternative Transportation to Give Americans Solutions Act of 2009 is a bill introduced on April 1st to promote the use of natural gas as a transportation fuel. It has provisions for natural gas vehicle production and installation of refueling equipment. This is great news for many parts of the country where new shale gas plays are developing, it will reduce our dependence on foreign oil, keep fuel dollars in the United States and result in fewer vehicle emissions. (Text of the Bill.)

Aubrey McClendon, CEO of Chesapeake Energy, says that the Haynesville Shale might set a record as the world’s largest gas field. He believes that it could produce 1.5 quadrillion cubic feet.

Seven new, large LNG plants being completed overseas could bring a glut of natural gas to United States markets. Some believe that these deliveries will not only depress the price of natural gas but they will also hamper the development of domestic natural gas plays such as the Haynesville, Fayetteville and Marcellus.

One of the biggest issues that environmentalists have with hydraulic fracturing is that the companies who use it have not been required to reveal the chemical additives. A bill introduced in Congress by Diana DeGette of Colorado would require companies to disclose drill site chemicals and subject them to the Clean Water Act.

News about Marcellus Shale.

An article at The Oil Drum explores how tight credit and a rapid drop in natural gas prices have put the brakes on leasing and drilling activity and the United States gas plays.

News about Fayetteville Shale.

A number of people in Louisiana were expecting checks of up to $22,500/acre as signing bonuses for Haynesville Shale leases. They learned on Monday that their expected checks were not funded.

Haynesville Shale News

According to the New York Attorney General’s Office, natural gas lease agreements can include more variables than royalty rates and signing bonus amounts. Land owners can ask for almost anything in their lease agreement.

Once when I was buying a house I requested a variation from the standard contract offered by the real estate agent. The agent said that it was not possible so I asked her to call my attorney. My attorney told her that Mr. King can write… “Seller will jump in a lake” into the contract… and the seller can decide if he wants to do it.

The City of Shreveport leased 2600 acres of land to natural gas companies in 2004 for $1/acre. Recent prices for similar Haynesville Shale leases are thousands of dollars per acre. Now the mayor is trying to get the city out of the deal.

Andrew Gould, Chief Executive Officer of Schlumberger, the largest oil field service company, commented on the oil and gas cycle in his presentation at the company’s 2008 investor meeting. He sees increased exploration and production in the future supported by deep water drilling and unconventional resources such as the natural gas shales.

Chesapeake Energy is one of the leading companies drilling the organic shale deposits for Natural Gas in several basins across the United States. They recently announced plans to cut their rig count and capital expenditures. The recent sharp decline in natural gas prices has changed the economics of their business model.

A PowerPoint presentation title “North American Natural Gas Supply Assessment” gives the most detailed information that we have seen on the production history and projected future of the natural gas plays that are currently taking off in the United States. It was prepared for the American Clean Skies Foundation by Navigant Consulting.

United States Natural Gas Plays

United States natural gas production is on a new rise after many years of steady decline. The newly tapped plays such as the Barnett, Haynesville and Marcellus have the promise of replacing a lot of oil that otherwise would have been imported.

The United States is ramping up its natural gas production thanks to newly developed gas in formations such as the Marcellus Shale, Barnett Shale and Haynesville Shale. These organic shale deposits are not unique to the United States and this article explores the gas shale situation in Europe which is just starting to take off.