Indigo Natural Resources LLC, a privately held, independent that works in the Haynesville Shale, reported record production of 1 boe/d net in March.
Houston-based Indigo said it had also increased throughput on the M5 Louisiana Gathering LLC system to 1 Bcf/d in April. Indigo owns a 50% stake in M5, a midstream joint venture (JV), with Momentum Midstream owning the other half.
Executive Chairman Bill Pritchard said proved reserves had expanded to 4.7 Tcfe at the end of 2018, while proved, probable and possible reserves remained steady at 16 Tcfe. Pritchard credited top performing wells in the Haynesville, the Bossier Shale and the Holly Vaughn area within the Cotton Valley formation with the increase in proved reserves, as well as its accretive leasing and bolt-on acquisitions.
This year’s development program is to include up to seven rigs and two fracturing crews, which should “drive meaningful growth and value to both Indigo and our midstream JV," Pritchard said Thursday.
The company "will continue to benefit from our proximity to the Gulf Coast petrochemical and liquefied natural gas demand centers, which provides us with lower differentials to the Gulf Coast compared to other natural gas basins as well as a diversified base of purchasers for our natural gas."
Indigo holds 435,000 net acres in North Louisiana, including 140,000 in the Haynesville, 115,000 in the Bossier, 92,500 in the Holly Vaughn and 87,000 elsewhere within the Cotton Valley.
M5 includes 270 miles of gathering lines, with another 85 miles under development. The JV also owns 30 miles of produced water pipelines, 10 miles of freshwater pipelines. A Momentum subsidiary, Gen6 Proppants, is also building a 1.5 million ton/year sand mine in Louisiana's Red River Parish to serve the Haynesville. The mine is expected to come online by the end of the year.
Indigo acquired 78,000 net acres from Chesapeake Energy Corp. for $450 million in December 2016. The deal included 250 wells with 30 MMcf/d of production. Analysts also took note of Indigo and other private producers for growth in the Haynesville rig count in October 2017.
Other producers in the Haynesville include XTO Energy Inc., a subsidiary of ExxonMobil Corp., and Exco Resources Inc. BP plc acquired BHP's assets in the Haynesville as part of a $10.5 billion deal last year.
In its Drilling Productivity Report from last month, the Energy Information Administration said is expected natural gas production in the Haynesville to average 10.52 Bcf/d in April, up from 10.34 Bcf/d in March.