Japan’s Mitsui Testing Western Haynesville Alongside Comstock, Aethon

Japanese firm Mitsui spudded a test well earlier this month near the emerging western Haynesville play, adjacent to acreage held by Comstock Resources.

Mitsui E&P USA, the U.S. E&P arm of Tokyo-based Mitsui & Co. Ltd., was drilling an exploratory vertical test well in Leon County, Texas, as of early March, according to data from drilling contractor Scandrill and the Texas Railroad Commission (RRC).

On March 2, Scandrill’s Explorer rig spudded the vertical O. Henson #1 for Mitsui in Leon County—about five miles east of the town of Buffalo, Texas.

State regulators also approved Mitsui’s plan to drill a new horizontal well on acreage in nearby Freestone County, RRC filings show.

The presence of the Japanese company in the emerging play is another sign of renewed interest by foreign investors in U.S. shale following a shaky start more than a decade ago.

International investors could pour “well over $10 billion” into U.S. shale investments in the coming years, according to Brody Rollins, a managing director in Jefferies’ energy investment banking group.

Mitsui is among just a handful of E&Ps with permits to drill horizontals in the western Haynesville play—in addition to Comstock and privately held Aethon Energy, the two companies that kicked off development in the area.

Comstock and Aethon have drilled horizontals in the Bald Prairie Field with target vertical depths of up to 19,000 ft. Laterals have landed in the Bossier, Cotton Valley and Haynesville benches, according to completion data.

Mitsui is permitted to drill in the Bald Prairie Field to depths of up to 30,000 ft, according to RRC records. But it’s unclear what bench Mitsui could ultimately target with the horizontal location it has permitted, or when it will drill.

Mitsui “will be testing and developing multiple horizons” on the western Haynesville gas asset with full-scale operations beginning “post-2026,” the company said on its website.

Mitsui E&P USA did not respond to Hart Energy’s request for more information by press time.

Pushing into Freestone County

Western Haynesville development by Comstock and Aethon has focused on Robertson and Leon counties.

Permits show Comstock and Mitsui might push drilling further northeast into Freestone County.

PHOTO: Mitsui Comstock Western Haynesville RRC GIS[CM1] — Mitsui and Comstock are permitted to drill western Haynesville horizontals near the Leon-Freestone county line. *(Source: RRC GIS data)*

Comstock has a Freestone County stepout location permitted about five miles to the northeast of Mitsui’s location, according to the RRC’s GIS map viewer.

Comstock’s Olajuwon PP #1H is permitted to drill the Dowdy Ranch (Cotton Valley) field at a depth of up to 30,000 ft. The permit was approved in October 2024.

It was the RRC’s first approval for a new horizontal well in Freestone County since August 2019.

Majority owned by Dallas Cowboys owner Jerry Jones, Comstock is all-in on the western Haynesville. The company added 64,000 net acres in the play in the fourth quarter, growing its position to 518,000 net acres.

Mitsui’s acreage is directly adjacent to Comstock’s western Haynesville position, data show.

Comstock Mitsui Map Novi Labs — Comstock grew its western Haynesville position to 518,000 net acres in the fourth quarter. Mitsui’s position and drilling rig is directly adjacent to Comstock’s acreage. New horizontals by Comstock and Aethon have been drilled along the Cotton Valley Limestone shelf edge. *(Source: Novi Labs)*

Comstock turned 11 operated western Haynesville wells to sales in 2024. Lateral lengths averaged 10,032 ft; average IP rates were 38 MMcf/d.

Freestone County and the surrounding area did see a fair bit of horizontal activity in the late 2000s and early 2010s. XTO Energy, Devon Energy and other operators targeted the Cotton Valley and Bossier plays with laterals 1 mile or shorter.

But production from the legacy assets paled in comparison to Comstock and Aethon’s modern horizontal wells.

Western Haynesville wells have stronger output but higher well costs. Comstock’s costs for a western Haynesville mega-well are $27 million per 10,000 lateral ft—down from $39.3 million in 2022 for its first well in the play.

Data from Novi Labs shows average (mean) breakevens for western Haynesville wells range between $4/Mcf and $5/Mcf, compared to less than $4/Mcf for a well in the traditional Haynesville play.

PHOTO: Haynesville Western Haynesville HH Breakeven Distribution Novi Labs — Western Haynesville wells need higher breakeven Henry Hub gas prices (~$4-5/Mcf) than wells in the traditional Haynesville core (less than $4/Mcf), according to Novi Labs research. NOTE: Based on Comstock’s most recent well costs of $2,700/lateral ft. (Source: Novi Labs)

Hilcorp Energy, which acquired XTO’s Freestone Trend position in 2023, now manages legacy assets in the area.

Diversified Energy, which acquired East Texas assets from Crescent Pass Energy last year, also has a footprint nearby.

Mitsui grows U.S. gas portfolio

Mitsui expanded into the western Haynesville area through an acquisition from Vanna Production and Sabana Royalty Partners last summer.

The deal included 46,000 acres in Texas “with access to the Gulf Coast industrial area,” including LNG export terminals and ammonia plants, Mitsui said at the time. But it was unclear where exactly the acreage Mitsui acquired was located.

Mitsui’s acquisition in Freestone and Leon counties added onto its existing unconventional gas footprint in South Texas.

In 2023, Mitsui acquired a 92% working interest in a gas asset (8,500 gross acres) in Webb County, Texas, from Silver Hill Energy Partners. Mitsui also owns assets in adjacent La Salle County, Texas, per RRC records.

Mitsui E&P USA produced more than 23 Bcf of natural gas from South Texas in 2024, or about 65 MMcf/d.

Mitsui has drilled and completed six of its own horizontal wells in South Texas since September 2023, RRC data show.

Other major operators in Webb County include EOG Resources, Lewis Energy Group, Crescent Energy, SM Energy and Kimmeridge Texas Gas (KTG).

Mitsui also owns non-operated interests in the Eagle Ford and Appalachia.

Mitsui Webb La Salle Counties TX — Acreage, wells and horizontal laterals operated by Mitsui E&P USA in Webb and La Salle counties, Texas. *(Source: Rextag data)*

International interest

M&A experts say there’s significant interest for U.S. natural gas among international buyers once again.

Japanese interests are clearly leading the way in U.S. shale gas among Asian and European buyers.

TG Natural Resources, the fourth-largest Haynesville gas producer, is majority owned by Tokyo Gas, the largest utility company in Japan.

Sabine Oil & Gas, another major Haynesville producer, is backed by Japanese utility Osaka Gas.

BPX Energy, the U.S. shale subsidiary for BP Plc, is looking to boost drilling activity in the Haynesville as prices rise.

Brody Rollins Jefferies 2025 DUG Gas — Brody Rollins, managing director of energy investment banking, Jefferies. *(Source: Hart Energy)*

Jefferies’ Rollins said there was a wave of international investment in U.S. shale in the 2010s, including joints ventures with U.S. operators. Those early projects had limited success.

But international players are coming back with more than a decade of learnings and datapoints from U.S. shale activity.

“These are plain and simple good investments, regardless of whether you’re doing it because you’re trying to directly link your LNG-offtake agreements to onshore production as a quasi-hedge,” Rollins said at Hart Energy’s DUG Gas Conference & Expo in Shreveport, Louisiana.

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