A north Louisiana natural gas basin that helped kickstart the shale boom a decade ago is getting a new lease on life as the market recovers.
Bloomberg reports that production in the Haynesville reservoir, which stretches into Texas, is expected to climb for the seventh straight month in June, reaching the highest since October 2014, government data show.
Output in the shale fell to a six-year low last March, pressured by tumbling gas prices and competition from more profitable wells in Pennsylvania and West Virginia.
But as pipeline bottlenecks strand gas supplies in the eastern U.S., the vast network linking the Haynesville to the rest of the country—along with a new export terminal shipping American gas overseas—has made production in the Haynesville more valuable.
Drillers from Exco Resources Inc. to Chesapeake Energy Corp. have refocused resources there to slash production costs, while private-equity backed companies bought assets to do the same.
“Once left for dead, the Haynesville Shale in Louisiana and East Texas is in the midst of a resurgence as new well designs bring natural gas gushers to life,” says William Foiles, a New York-based analyst for Bloomberg Intelligence, in a May 12 report. “Redesigned wells have since expanded the Haynesville’s untapped potential, with output expected to rise as capital and rigs return.”
