The exploration and production industry is still working the Haynesville Shale, despite the collapse in natural gas prices over the last few years. This activity is at a much-reduced level compared to the peak earlier in the decade.

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The industry has drilled or received permits to drill 2,388 Haynesville Shale wells in Louisiana since development started here in the latter part of the previous decade. Most of this activity is in the northwestern part of the state and operators have put 2,048 of these wells onto production as of August 2012.

SEE: A Guide To Investing In Oil Markets

Chesapeake Energy
(NYSE:CHK) is operating two rigs in the Haynesville Shale as of August 2012. The company eliminated 4.6 Tcfe of proved undeveloped reserves (PUD) from its reserve base at the end of the second quarter of 2012. These PUD removals were due to lower prices for natural gas and were located primarily in the Haynesville and Barnett Shale.

Anadarko Petroleum (NYSE:APC) is operating six rigs in the Haynesville Shale but did not even mention the play in its second quarter of 2012 earnings release. The company added more details in its quarterly operations report and disclosed capital spending of $117 million and sales volume of 158 million cubic feet of natural gas equivalents per day in the recently ended quarter.

Anadarko Petroleum has succeeded in reducing drilling costs in the Haynesville Shale over the last few years and reported a 50% reduction in completion costs on wells here in the most recent quarter relative to the second quarter of 2011.

SEE: Oil And Gas Industry Primer

Exxon Mobil (NYSE:XOM) is operating four rigs in the Haynesville Shale and entered the play through the purchase of XTO Energy at the peak of the natural gas bull market in 2010. The company also made no specific mention of any Haynesville Shale activity during the second quarter of 2012 conference call. Exxon Mobil has shifted many rigs from dry gas basins to those that produce crude oil and liquids in 2012.

EXCO Resources (NYSE:XCO) is operating five rigs in the Haynesville Shale and is one of the largest producers here., with gross production of 1.2 Bcf of natural gas per day as of July 17. The company's development plan for 2012 includes drilling in DeSoto Parish, Louisiana, where EXCO Resources is developing wells on 80 acre spacing.

BHP Billiton (NYSE:BHP) is operating four rigs in the Haynesville Shale and like Exxon Mobil, bought into the play near peak valuation levels. The company purchased Petrohawk Energy, a large independent oil and gas company, in July 2011 for approximately $12 billion.

The Bottom Line
Many operators are continuing to operate in the Haynesville Shale, albeit at a much reduced level compared to just a few years ago. These companies are ready to increase activity here, if and when natural gas prices recover to levels that make development economic.

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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