The Daley Note: October 10, 2022
Rigs in the Haynesville climbed from an average of 43 rigs in July to 47 rigs in September, bolstering our already bullish production outlook for the basin.
While 4 rigs may not seem like much, the additional activity would increase our 2023 production forecast by 400 MMcf/d from the prolific play, from 11.9 Bcf/d to 12.3 Bcf/d.
East Daley is in the News. Click here to read a new Natural Gas Intelligence article highlighting East Daley market analysis ahead of last week's EIA report of a 129 Bcf weekly storage injection. We noted unusual pipeline flows out of the Haynesville that point to large storage builds ahead.
The additional rigs come from Chesapeake (CHK), Comstock (CRK), and BP (BP), as well as privates Aethon and Paloma. The midstream beneficiaries are Energy Transfer (ET), Williams (WMB) and DT Midstream (DTM), according to our Midstream Activity Tracker.
The rig increases on WMB’s Trace and Magnolia systems and DTM’s Blue Union system are in line with recently announced expansions, but ET has yet to formally announce anything for its Haynesville system that it inherited via the acquisition of Enable Midstream (ENBL).
We expect the ET system is already near its capacity at ~1.6 Bcf/d, and based on historical Enable presentations the system can expand up to 2.8 Bcf/d. According to East Daley’s asset-level Blueprint Financial Models, we expect the system to generate $277 million in EBITDA for 2023, but those estimates could increase to ~$300 million if it can sustain its current rig counts of ~9 rigs.
One thing is clear: there is a rising tide in the Haynesville for infrastructure companies, as current rig levels indicate significant volume growth. – Ajay Bakshani, CFA Tickers: BP, CHK, CRK, DTM, ET, WMB.
Webinar: Dissecting U.S. Natural Gas Production
Join us at 12 p.m. ET on Wednesday, October 12 for a webinar discussion of U.S. natural gas supply and demand. In this 30-minute webinar, East Daley analysts will go behind the curtain and share our unique production methodology. Click here to register and for more information. For those interested in a deeper dive into natural gas market dynamics, we published an updated monthly Macro U.S. Supply & Demand Forecast Report and Dataset this past week (Sept. 26). Please contact Zack Van Everen to request a copy.
Speaking Event: LDC Gulf Coast Energy Forum
East Daley is participating in the 4th annual LDC Gulf Coast Energy Forum this week, Oct. 12-14 in New Orleans. Vice President of Analytics Rob Wilson will join a panel discussion titled, “State of the Gulf and Beyond: LNG Export Updates, Supply and Demand Fundamentals and the Effect on the World,” at 10:30 a.m. CT on Oct. 12 in New Orleans. Please click here for event registration and more information.
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