Production freeze-offs in the states of Texas, Oklahoma, and Louisiana were roughly in line with what we were expecting from December 21st until December 28th. Our forecast was made 3 days before the storm hit using weather forecasts.
Texas, Louisiana, and especially Oklahoma production returned faster than we originally had forecasted. Oklahoma production was the biggest surprise in returning faster than expected. The main reason why production returned faster than expected in the South is because the South had minimal loss of power during the winter storm. On the other hand, the Northeast had widespread loss of power, and this is the main reason why production hasn’t fully returned yet in the Northeast despite temperatures going back above 32 degrees Fahrenheit.
We did not have a forecast for Northeast production freeze-offs since Hyperion customers were interested in the states of Louisiana, Texas, and Oklahoma due to the proximity of those states to the Henry Hub futures contract. Due to the widespread loss of power in the Northeast, it probably won’t be until early January when the lost production from freeze-offs fully returns.
Hyperion Update
EQT’s fracking crews have finally broken above the 1 fracking crew barrier in the middle of December. EQT’s fracking crew count was stuck between 0 and 1 since October due to the summer drought in the Northeast and 3rd party midstream problems. The summer drought problems were resolved a few months ago and it looked as though they were still having 3rd party midstream issues into December. However, with the recent pickup in fracking crews, it looks as though their 3rd party midstream issues have been resolved. EQT and most other Northeast producers may have experienced a temporary drop in fracking crews due to the recent winter storm. The Hyperion data update this week and next week will tell us more about what happened to the fracking crews from this year’s winter storm.
