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Friday, September 9, 2011

East Texas, Haynesville Production Stable Despite Wildfires

- East Texas, Haynesville Production Stable Despite Wildfires

Friday, September 09, 2011
Rigzone Staff
by Karen Boman

The wildfires plaguing East Texas have not impacted natural gas production volumes in the region, including Haynesville shale play production, but evacuations and fire-related damage have negatively impacted demand, BENTEK Energy reports.

Over the last three days, evacuations and fire-related damage in Texas have led to a near 1.0 Bcf total demand loss. BENTEK expects demand recovery to be gradual, though some demand should return due to rising temperatures. The Texas gas demand forecast, based on temperatures, shows power burn increasing by nearly 1.0 Bcf in the coming week, BENTEK said.

The Haynesville shale, one of the largest gas shale plays in the U.S., straddles the Texas and Louisiana border. Haynesville shale production from both states totals just above 5.0 Bcf/d, with about half of that production coming from the Texas side, BENTEK reports.

“BENTEK’s sample of production receipts from East Texas and Haynesville has not yet shown a distinct decline in production receipts that could be directly attributable to the fires,” BENTEK said in a report today. However, some of the fires have erupted around the perimeter of Haynesville shale counties, raising concerns about safety and disruptions in the fields.

Wildfires have burned acres in Harrison County, Texas, a core Haynesville production area in the state, and four non-core Haynesville production counties in Texas, Gregg, Marion, Nacogdoches and Rusk.

“If fires were to erupt in more developed areas of the shale, operations would undoubtedly have to be shut in, restricting production,” BENTEK said. “Even without a fire, downed power lines or disruptions in power transmission could also impact operations of pump jacks and compressor stations.”

To date, 26 large fires have burned nearly 114,000 acres in Texas, and are threatening oil and gas operations in the East Texas region as well as Louisiana and Oklahoma. An estimated 1,700 homes were either evacuated or lost, and more are threatened by fires.

“Much of East Texas is experiencing the highest level of drought conditions, and the fire danger in the East Texas Basin remains high to very high,” BENTEK said. Tropical Storm Nate will likely spare Texas from high winds but also withhold chances for rain.

Louisiana’s Department of Natural Resources (DNR) on Sept. 6 issued an advisory calling on oil and gas operators to monitor conditions closely and take necessary steps in case of fire, including shutting in wells, production facilities and pipelines if necessary.

“As drought conditions persist in many areas of our state, so does the risk of wildfire and the potential for wildfires to grow quickly out of control once they start,” said DNR’s Commissioner of Conservation Jim Welsh. He reminded operators that state regulations require combustible vegetation, trash and debris should always be kept at least 100 feet away from wellheads, production equipment, storage tanks and other exploration and production site structures.

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