“Happy birthday to America—and to the Haynesville shale,” says Shannon Nome, Houston-based managing director and E&P analyst for Deutsche Bank Equity Research in a follow-up to her year-ago “Shale to Shining Shale” report on U.S. gas shales.

“The Haynesville continues to dominate headlines as impressive drilling results and exciting joint-venture announcements have vaulted it past the Barnett as the No. 1 U.S. shale play in terms of rig activity.”

Haynesville shale results continue to impress, while activity in other shales is slowing down, Nome says.

“While a rush to hold acreage is one key driver for this increase, we believe strong drilling results have also fanned the flames of enthusiasm for Haynesville, which stands among the very few U.S. gas plays that can clear breakeven economic thresholds given the weak pricing backdrop.”

Acreage values in the Haynesville play have remained steady, despite the 70% drop in natural gas prices during the past year.

“Last July, we quoted a range of valuation from $15,000 to $40,000 per acre in our shale report, with a midpoint of $25,000, while stating a belief that per-acre prices would ultimately push up into the $50,000 range.”

Not all acreage transaction value is slipping, though. “Today, while industry contacts suggest that the low end of acreage transaction values has slipped $5,000 per acre in the fringes of the play, land in the hottest part of the ‘core’ area in DeSoto Parish is indeed changing hands in the $50,000-per-acre realm,” she reports.

With big production and big reserves comes big interest, she adds. “This divergence in low-end versus high-end acreage values, in our estimation, reflects differences in well performance that are starting to emerge as the play enters its second year of heavy activity.”

IP rates in the high range—above 20 million cubic feet per day—are becoming more and more frequent in the play’s best areas, although differences in testing phases hinder comparability. (IP rates measured over a 24-hour period produce different results than a two-week period.)

“That said, industry per-well EUR estimates seem to be walking generally higher as production history accumulates, and even in the ‘noncore’ areas, we note many wells are being commercially completed.”

And what about take-away capacity? “Pipeline projects further underscore optimism for future growth from the Haynesville, as roughly 5 billion cubic feet per day of proposals with target dates on or before 2010 currently sit on the drawing board.”

Nome expects playwide production to double or triple by 2010.

“Despite the major infrastructure projects in the works, we believe occasional bottlenecks in parts of the Haynesville shale-play area are likely to occur. As well, some producers may suffer attrition in their acreage unless they are able to successfully establish production before lease terms expire.”

Other risks include oil and gas exposure, weather delays, drilling/exploratory hazards, political/regulatory pressures and significant capital requirements, she adds.