|
In most regions of the country, producers tend to herd - hot areas, new fracking and drilling techniques, deferred TILs or not. But in Haynesville, a couple of producers are bucking some broader trends, begging the question: Are they leading the pack, or just outliers? Paloma Paloma has been bucking the trend towards lower rig count activity in Haynesville Louisiana over the past 12 months. Paloma’s Haynesville Louisiana rig count activity has been on an uptrend over the last 12 months. At the same time, Haynesville Louisiana’s total rig count activity has been on a downtrend over the past year. Paloma is also bucking the trend in Haynesville Louisiana DUCs. Paloma’s DUC count has grown while Haynesville Louisiana’s total DUC count has fallen over the past 12 months, as other producers have kept up their crew presence and completion rates while reducing rigs, whereas Paloma’s completion activity hasn’t kept up with their increased rig rates, leading to increasing DUC counts. Paloma’s activity in Haynesville Louisiana is predominantly in the De Soto and Caddo Parishes where the company has acreage, favorable geological characteristics, and existing infrastructure. It appears that Paloma is looking to build DUC inventory over the next few years as LNG demand grows substantially. Should these relative trends continue over the next year, Paloma could gain production share as LNG demand growth dominates over the next 2-3 years. Comstock Resources Comstock Resources is bucking the trend in Haynesville in another way. They are the only Haynesville natural gas producer that is choking back wells. In fact, they are the only public natural gas producer in the Lower 48 who has publicly stated that they are choking back wells. To quote from the from the company’s second quarter 2025 analyst conference call: “Analyst: Understood. And it makes complete sense. And as my follow-up, I wanted to see if you could offer some perspective on what you're seeing in the Western Haynesville that's leading you down the path of testing restricted choke Management” Daniel S. Harrison, Chief Operating Officer: We got wells kind of all the way across-the-board trying to kind of see what works. And what we see is if, you know, a little bit -- a little bit more of a decline in year one, just basically choking them back, which is part of the reason our production is low is this was just self-imposed. You know we've gotten more aggressive at choking the wells back, trying to maintain a real disciplined drawdown. And so that -- that's you know in the results we see, and when we model it out, and we do look at competitor wells, the state data leads you to think that you should get a little better EURs if you flow them at basically more conservative rates. Jay Allison, Chairman and Chief Executive Officer: And I think, that's one reason we came up and adjusted the production. In other words, we said whatever we see every 90 days, we're going to tell you and then we're going to adjust it accordingly. And that's just what it's telling us to do. And it's like Dan said, if you can -- if you can choke it back a little bit more and have a much higher EUR and the IRR looks fantastic and the payout looks good, et cetera. And you've got this inventory on two -- on 525,000 net acres, and that's how we want to manage it. It is managing like -- like we said, it's taken care of today, but it's also managing for long-term.” Comstock Resources was one of the very few natural gas producers who produced below the midpoint of their guidance for the Q2 2025 reporting quarter. One of the main reasons why they underperformed on production was due to choking back newer wells. Comstock stated that the reason they choked back on newer wells was due to getting a better EUR (Estimated Ultimate Recovery) for the wells. The chokes are occurring in the Western Haynesville wells where the company is experiencing relatively high IP rates. Whether the chokes are indicative of economic production shut-ins or simply operational optimization of the EURs of the wells remains to be seen. Summary Paloma and Comstock Resources are 2 Haynesville producers who are bucking the trend in Haynesville Louisiana over the past 12 months. Paloma is adding rigs, while Haynesville producers have been cutting back on rigs during the last year. Comstock Resources is choking back on production to optimize long-term EUR and has underperformed production guidance, while this hasn’t been the case for the other producers. |