Chesapeake Energy, one of the largest natural gas producers in the Haynesville and Marcellus basins, recently stated in their analyst conference call that they will be looking to maintain their natural gas production until more LNG export capacity is sure to come online at the end of 2024 or if the current NYMEX Henry Hub natural gas forward curve holds at current prices in 2024. If current natural gas prices hold by mid-2024, they will add a rig in the Haynesville basin. If not, they will maintain current production into all of 2024.
The company outperformed on production in the 3rd quarter of 2023 despite elective curtailments in the Marcellus basin. Those elective curtailments will go away by either the beginning of November 2023 or mid-November 2023, thus causing Marcellus production to rebound in November and December barring any production freeze-offs. They will continue to operate five rigs in Haynesville and four rigs in Marcellus until around mid-2024. By mid-2024, if current natural gas prices hold or if more LNG export capacity comes online, they will add a sixth rig in Haynesville.
Well productivity has been strong in all of 2023 and it has been strong enough that the company has even delayed bringing another frac crew online.
Tale of Two Haynesvilles
There has been a divergence in fracking activity this year in Haynesville Texas and Haynesville Louisiana.
Since the beginning of June 2023, frac crews in Haynesville Louisiana have been in decline while frac crews in Haynesville Texas have been on the rise.
Comstock has been the major producer shifting activity from Haynesville Louisiana to Haynesville Texas.
Frac activity for Comstock has been in decline in Haynesville Louisiana while simultaneously on the rise in Haynesville Texas since June 2023. This is due to better performing wells for Comstock in Western Haynesville where the IP (Initial Production) rates have been around 35 MMcf/d on average. Expect this trend to continue into 2024 as Comstock plans to aggressively expand activity in Western Haynesville from now until 2028 when they plan to produce 2 Bcf/d in the Western Haynesville basin.
Summary
For the time being, Chesapeake Energy is content to keep a flat natural gas production profile until either the current forward natural gas curve remains intact mid-way through the trading year or if the LNG export capacity comes online by the end of 2024. The Western Haynesville basin is set to become a more prolific production basin over the next few years out to 2028 led by Comstock Resources.