LOGA Industry Report - Fall 2015 - (Page 14)

NORTH LOUISIANA noTeS old Formation offers new life If you have drilled a well in Louisiana since the 1940's, then you are familiar with the Ragan Dickens Communications Director, LOGA Cotton Valley formation. For the rest of the population, the Cotton Valley is a natural gas producing formation that starts around 7,800 feet and extends below the ground to around 15,000 feet or more in the lower Cotton Valley. This play sits directly atop the famous Haynesville Shale that has been actively producing since around 2008. Geographically, the Cotton Valley encompasses around a dozen or so parishes in North Louisiana as well as eight counties in East Texas. Over the last year, drilling in the Cotton Valley has ramped up significantly compared to the last 10 years. Lincoln Parish alone has around 12 Cotton Valley rigs running today. Recently, of the 25 rigs running in North Louisiana, according to the Baker Hughes drilling report, about 15-20 of the rigs running are in the Cotton Valley formation. What has caused a shift from the Haynesville Shale to the Cotton Valley? Thanks to the developing technology surrounding hydraulic fracturing and longer lateral drilling, the Cotton Valley has recently seen some uptick in development. Also, the Cotton Valley is a more liquid-rich play than that of the dry natural gas-producing Haynesville Shale. Natural gas liquids, or NGLs, such as ethane, propane and butane can be found in the Cotton Valley, thus making it more profitable to produce than the Haynesville Shale. In addition to the NGLs making the Cotton Valley more profitable, some operators have reported the Cotton Valley play is 40 percent cheaper to drill and complete than the Haynesville Shale. If we think back to the steep incline in production from the Haynesville Shale that occurred from 2008-2012, jobs were easy to come by in the natural gas fields of North Louisiana. About midway through 2012, due to the price of natural gas dropping significantly, drilling in the Haynesville dipped from 139 rigs running, down to about 12 rigs running today in 2015. The price tag to drill a Haynesville well started out in the $12 million range, yet cost-reducing measures have diminished the cost of a Haynesville well to around $7.5 million. Still, this price tag of more than $7 million dollars per well has kept the Haynesville rig count to a minimum. As the Haynesville drilling faded, so did the 180 or so direct and indirect jobs that were tied to each drilling rig. The latest global report from Bloomberg stated that around 100,000 men and women have been laid off due to the price of crude oil dropping to unprofitable lows starting in November of 2014. So, coupled with the reduced drilling of the Haynesville Shale natural gas play, along with the low crude oil prices, jobs in North Louisiana are significantly more difficult to find. As the Cotton Valley ramps up operations in North Louisiana and East Texas, the direct jobs are likely to return along with the indirect jobs that result from oil and gas development coming to an area. ● as the Cotton Valley ramps up operations in north louisiana and east texas, the direct jobs are likely to return along with the indirect jobs that result from oil and gas development coming to an area. 14 | loGa INDUSTRY REPORT | Fall 2015

Table of Contents for the Digital Edition of LOGA Industry Report - Fall 2015

Chairman’s Corner
President’s Perspective
North Louisiana Notes
Comments from the Commissioner
From the DNR Secretary’s Desk
From the LDWF Secretary’s Desk
Comments from Congress
Legislator Profile: Senator H. Neil Riser
LOUISIANA GUBERNATORIOL RACE QUIET SO FAR
IT'S LOUISIANA'S FAVORITE SEASON- ELECTION SEASON!
LEGISLATIVE LANES TO VICTORY
LOGPAC ELECTION ENDORSEMENTS
THE COTTON VALLEY: A PLAY THAT'S GETTING BETTER ALL THE TIME
Reflections on the Ever-Changing Oil and Gas Industry
CAMERON LNG NEW LIQUEFACTION FACILITIES A WIN-WIN
Court Watch: A Silver Lining in the BP Settlement
LOUISIANA LEGISLATURE PASSES NEW LAW ON DRILLING UNITS
A SUMMER OF ENERGY DISCONTENT IN WASHINGTON DC
WEATHERING THE STROM, FOCUSED ON THE FUTURE
LAGCOE 2015
OPPORTUNITY FOR CONTINUED LAWSUIT REFORM
Leadership Development: EXCELERANT
Workforce Development: Illustrating Industry Support for STEM Education
4th Annual LOGA Sporting Clays
2015 LAGCOE Open Golf Tournament
Oilfield Service Auction Preview
Member Services Spotlight: From Websites to Mobile Apps, Envoc is Making ‘A Better Reality’ for Clients
Petroleum Facts at a Glance
New Members
Index of Advertisers/ Advertisers.com

LOGA Industry Report - Fall 2015

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