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BP's South Haynesville Natural Gas Passed MiQ’s Certification with Flying Colours: a Straight-A Student

BP's U.S. onshore wells in the Haynesville Shale have ranked among the best performing wells for methane emissions, as the company took the opportunity to become the latest major international energy producer to differentiate its natural gas through MiQ.’s certification.

BPX Energy, the onshore unit of BP, was awarded an A grade on Dec. 8 by MiQ for its methane emissions performance from its South Haynesville Basin wells across Texas. The audit was performed by MiQ’s independent certification system. With such an audit in place, operators can differentiate themselves through methane-emissions performance. MiQ currently certifies about 10 Bcf/d or around 2.5% of the global gas market and 11% of U.S. gas production.

According to the management of MiQ, the company aims to bring forward a market where certified natural gas can be traded around the world in the same way as other traditional commodities, ultimately providing incentives to lower overall emissions of methane. And now, as a result of its certification system's innovative and independently audited nature, operators, buyers, and even regulatory agencies can viably support methane reduction in a global context.

As for BPX, its South Haynesville Facility is composed of 70 wells, and MiQ will issue one certificate per MMBtu of certified natural gas. Buyers and traders will be able to order these certificates through BP's account at the MiQ Digital Registry before the end of the year.

About 0.2 billion cubic feet of natural gas is produced by BPX's South Haynesville facility each day; these well sites have been certified using the MiQ Standard, which determines the facility's methane emissions from "A" to "F". As low as 0.05% methane concentration corresponds to an A grade, while 2% corresponds to an F grade.

Following such success, BPX is now looking closely into its Haynesville, Eagle Ford, and Permian basins assets to find additional opportunities for certification.

In accordance with all MiQ certifications, the BPX’s facility received an independent A grade from an auditor. In this case, GHD, one of eight accredited auditors by MiQ, verified the company.

In order to compile its data for audit, BPX utilized multiple methane monitoring technologies. A few examples include a drone and fixed-wing aircraft that can be equipped with OGI cameras, as well as ground-based cameras. Additionally, BPX measured methane emissions from targeted sources using field-measurement devices.

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Colgate Energy's owners are planning to go public

Colgate Energy is planning to float its shale oil producer in the Permian's Delaware Basin on the stock market. If successful, this IPO would be the first major U.S. oil producer offering since Jagged Peak Energy's IPO in January 2017. Looks like investors’ confidence in the sector is returning as U.S. crude prices hit their highest in seven years late last year S&P energy index delivered roughly twice the return of the S&P 500 in 2021.

The ever-increasing demand for natural gas exports from the Gulf Coast started a race to further develop Permian Basin. Various companies, including Kinder Morgan and MPLX, are among those looking at building new pipelines in the region due to the demand spike. But Energy Transfer seems to edge past them into the lead since its project strikes as the most economical option for the basin outside of capacity expansions on existing pipelines and could essentially add 1.5-2 Bcf/d of transport capacity with just 260 miles of new pipe.

Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.

The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.

No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.

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