Aethon Cuts Rigs but Wants More Western Haynesville Acreage
Private gas E&P Aethon Energy has drilled some screamers in its far western Haynesville Shale play—and the company wants to do more in the area.
Chris
Mathews
Hart Energy
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SHREVEPORT, La.—Aethon Energy is gassed up on East Texas and its far western Haynesville Shale play.
Dallas-based Aethon Energy Operating’s total Haynesville footprint has grown to around 350,000 net acres spread between northern Louisiana and East Texas, COO Andrea Wescott Passman said at Hart Energy’s DUG GAS+ Conference and Expo.
The company’s acreage is “split about half and half” between East Texas and Louisiana, but Passman admitted that Aethon’s far western Haynesville footprint is still “not enough.”
“We do love the western Haynesville though and [we] recently have really unlocked the recipe to make it work,” said Passman, who joined Aethon last year after previously serving as COO of Rockies-focused producer Caerus Oil & Gas.
“The more we can get over there, the better,” she said.
Aethon’s western Haynesville wells, each drilled at depths over 15,000 ft, “look a lot like offshore gas, because they’re just monsters,” Passman said.
Three of the company’s wells in eastern Robertson County produced a cumulative 17.18 Bcf in 2023, according to Texas Railroad Commission (RRC) data.
Aethon’s newest Robertson County well, Koda #1H, spit out nearly 3.3 Bcf in its first four months of production after being put to sales in September, RRC figures show.
Koda #1H was drilled southwest of Marquez, Texas, with an 8,120-ft lateral at a total vertical depth of 16,713 ft.
XTO was the fourth-largest gas producer (9.44 Bcf) in Robertson County in 2023, per RRC data.
The third largest Robertson County gas producer last year was Diversified Energy (9.85 Bcf), which also has a sizable footprint in the area.
And WildFire Energy I LLC has a large leasehold to the south—but the company is more focused on drilling oil wells than producing gas.
WildFire Energy was the top oil producer in Robertson County last year at nearly 1.2 MMbbl.
Aethon’s far western Haynesville play is home to several large oil and gas producers, including XTO, Comstock Resources, WildFire Energy I and Diversified Energy. (Source: Texas RRC; Rextag data)
“We’d like to do more in that area if we can get it,” Passman said.
The natural gas M&A market is active in other parts of the Haynesville Shale.
In February, LNG developer Tellurian directed its financial adviser to explore a sale of the company’s upstream assets in Louisiana.
Tellurian’s upstream segment includes around 31,000 net acres, 159 producing wells and over 400 undeveloped drilling locations—primarily in Louisiana’s DeSoto, Bossier, Caddo and Webster parishes.
Tellurian and Chevron are reportedly exploring asset sales near Aethon Energy’s Haynesville operating area. (Source: Rextag data)
While “there’s a lot of opportunity in the market” given the low gas-price environment, any potential M&A would need to move the needle in Aethon’s existing portfolio.
Aethon sees its access to integrated midstream capacity as a competitive advantage in driving down breakeven prices and generating strong returns, Passman said.
“We look for opportunities where we can take advantage of our midstream or where we have an opportunity to build into that,” Passman said. “That’s been a key of where we look at the dispatch curve and what falls where in terms of acquisitions.”
But Passman said Aethon is already keeping itself busy with organic activity—albeit less activity than a year ago.
A year ago, Aethon was running 13 rigs across its Haynesville position; Henry Hub averaged $2.65/MMBtu over the first quarter of 2023, per U.S. Energy Information Administration (EIA) data.
Aethon is running seven rigs today; Henry Hub is expected to average $2.20/MMBtu over the first quarter of this year, per the EIA’s latest forecast.
It’s a significant reduction in activity, Passman said, but “there are some pretty significant efficiencies associated with that reduction, as well.”
Aethon plans to operate in maintenance mode this year and to keep its eye on market dynamics and commodity pricing.
