02/04/2025
A Year of Tempered Haynesville Growth
Haynesville - LA natgas production has been largely anemic for the past 12 months. In December 2023 we saw frac crews fall in the region from a high of 15 in November 2023 to an average of just 8 throughout 2024. This decline in fracking activity coupled with an increase in Delayed Turn in Lines, DTILS, caused a fall in production from 10.75 bcf/d to current levels of just 9.25 bcf/d.
The Haynesville region is notoriously sensitive to even small changes in fracking activity with high IP but fast declining wells which produce almost entirely gas over oil and, it is considered by many to be the US marginal natgas producer. This region will also be critical for servicing the coming wave of LNG export expansion projects along the nearby Gulf Coast.
Pressure to Grow, New LNG Export Capacity
US LNG export capacity has now exceeded 15 bcf/d but additional projects are still underway with the potential to grow capacity to over 21 bcf/d in 2027. In the near term, Plaquemines Phase 1 & 2 as well as Corpus Christi Stage 3 will continue adding additional export demands with a combined incremental nameplate capacity of 3.95 bcf/d.
Haynesville Growth, A Scenario
When determining if and when the Haynesville will return to growth we can use Production Studio to better understand what key frac crew levels to watch. In general there is a 30-60 day lag between observing a change in frac crews and a subsequent change in production. This is because frac jobs themselves can last weeks and after the frac job finishes there is on average a 21 day lag before the completed wells are turned in line.
The first key level to understand is the region's breakeven frac crew number. This number represents the inflection point between growing and declining production, said another way when regional frac crews exceed this number we expect growth, inversely when crews fall below we expect declines.
Using Production Studio we simulate flat production one year into the future by maintaining 9.25bcf/d through May 2026. The resulting frac crew count is a monthly average of 8.5. This is our breakeven number.
Next lets look at what it would take to grow production back to 2023 levels of 11bcf/d within 12 months. For this we choose the “Forward Forecast” option in Production Studio. We run multiple scenarios experimenting with different frac crew values and quickly see the results over 12 months. For simplicity we assume a sudden ramp in crews although we can easily run scenarios where crews grow at a predefined rate. With 13 frac crews we can reach 11 bcf/d by April 2026 as shown in the chart below. March 2025 averaged just 9 frac crews so we would need an immediate ~40% increase in crews to add 1.75 bcf/d in 11 months.
What about Rigs?
The role of rigs in forecasting production has changed since the advent of fracking. In many ways rigs no longer matter for near term production trends so long as ample drilled but uncompleted wells, DUCs, stand ready for frac crews to bring them online. In short, rigs create DUCs and frac crews create production from DUCs. So are there enough DUCs in the Haynesville to support our hypothetical 13 frac crew scenario? And if not how many do we need?
In the Haynesville the SPUD/Rig ratio averages 0.87/month. So assuming we maintain the current rig count of 18 and our 13 frac crews complete 41 wells per month we will run out of DUCs in October 2025. Eight full months before reaching our 11bcf/d goal.
So what number of rigs do we need? Assuming we dont want to use our DUC inventory at all we need 0.87SPUDs per Rig per month divided by 41 completions per month from our 13 frac crews or ~47 rigs. The average rate of rig additions in growth periods is 2.5/month meaning we need 12 months to ramp rigs to 47. Here is what that looks like.
As you can see from the chart above, adding rigs at the steep rate of 2.5/month barely keeps us from running out of DUCs in the Haynesville should we want to achieve 11 bcf/d within 12 months using 13 frac crews.
Final Thoughts
Growing natgas production to its former highs in the Haynesville is by no means a simple endeavor. It is achievable, but, as we have demonstrated above, it will require significant frac crew and rig commitments from producers.
Any expectations for Haynesville growth should only come after we see significant increases in both rigs and frac crews. Anything less and meaningful growth is simply not possible.
Hyperion Feature Release Webinar - Introducing Production Studio
We’re excited to invite you to our upcoming webinar showcasing Production Studio, the latest feature in Hyperion designed to help you model and analyze production scenarios with ease.
