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SynMax Intelligence

HAYNESVILLE DUCs GETTING LOW



Haynesville DUCs have been on a steady downtrend in 2023 and are now approaching relatively low levels where producers will likely need to increase rigs to avoid having a potential shortfall of DUC inventories. 



DUC inventory data is provided by Hyperion.  Haynesville DUCs are now estimated to be around 330 as of mid-October 2023.  The lowest since the summer of 2021.  The EIA DPR (Drilling Productivity Report) has Haynesville DUCs much higher at around 737 as of September 2023.  However, the real amount of DUCs in Haynesville is much closer to Hyperion’s estimate of 330 than the EIA’s estimate of 737 based on commentary from executives at both Chesapeake Energy and Southwestern Energy.



Fortunately for Haynesville producers, natural gas prices for the November-2023 to March-2024 winter strip are trading at around $3.43 / MMBtu, an attractive price level for producers to significantly increase rigs.  Haynesville total rigs are currently at a level that is historically low relative to Haynesville total frac crews.



The historical ratio between total rigs and total frac crews is around 3.0.  It is currently at 2.4, but with Haynesville natural gas production significantly higher than it was in 2020, total rigs will need to pick back up relative to total frac crews in the basin.

Hyperion Update

 
Rig and frac crew data provided by Hyperion.  Rigs and frac crews for the Lower 48 US have picked up significantly over the past few weeks.  We have been expecting a significant pickup in rigs and frac crews due to forward guidance by most oil and gas producers for the 4th quarter 2023 and due to $80 / Bbl plus WTI crude oil pricing and $3.00 / MMBtu plus Henry Hub natural gas pricing.

 



Permian New Mexico, Eagle Ford (South Texas), & West Texas have seen the most significant increase in frac crew levels.  West Texas, Permian New Mexico, and North Dakota have seen the most significant increase in rigs.



We will continue to monitor the rig and frac crew levels as they can be volatile.  Stay tuned for the next update.  Same Hyperion channel, same Hyperion time!