?With the Haynesville shale expected to contribute as much as 7 billion cubic feet a day into an average 60 billion/day U.S. gas market, “I think there’s a reason a number of E&P executives are (supporting natural gas as a transportation fuel) and LNG exports as opposed to LNG imports,” says Dan Pickering, co-president and head of research for Tudor, Pickering, Holt & Co. Securities Inc. in Houston.


“This is going to be a big area of gas supply for several years out.”


Pickering and Steve Herod, ex?ecutive vice president, corporate development, for Haynes­ville acreage-holder Petrohawk Ener­gy Corp., spoke to Society of Petroleum Engineers members at an SPE Business Development Study Group program in Houston.


The Haynesville is still hot, Pickering says, despite falling gas prices and producers’ reduced access to public debt or equity capital. The one bright spot for Haynesville developers in the current capital and commodity-price market? “We do think (falling) service costs are the one clear positive for (2009),” Pickering said.


Public and private capital is being withheld from the Haynes­ville play. “(The market) is scared of the funding commitments the Haynesville might require.” He added that big Haynesville gas will block the movement of South Texas gas to market.


Operators are reporting that capital access is more important right now than commodity prices. “The credit crisis has everyone spooked.” Producers won’t issue stock at under-NAV prices to fund drilling, and pipeline builders—mostly MLPs—won’t issue units to fund building take-away infrastructure.


“So infrastructure build-out is being delayed by equity mar­kets as well,” Pickering said. As for natural gas prices, “the only drawback right now to the Haynes­­ville…is it is a tough market…There is too much gas out there…and the Haynesville is not going to make it much better.”


Herod said Petrohawk is putting in its own pipe. The Houston-based E&P is the No. 3 Haynes­ville acreage-holder (more than 300,000 net) and No. 1 in terms of acreage as compared with enterprise value. “So we are the most pure-play.”


Some 50% of the company’s acreage is under lease terms of more than three years, he added. Acreage can be held in the Haynesville by production with one well per section.

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