Haynesville gas production rises on better prices, LNG demand growth

By Jeremy Beaman April 25, 2025  spglobal.com

Gas production in the Haynesville Shale is on the climb as operators continue to turn deferred wells online in response to better pricing and the bullish outlook for LNG export demand.

Higher prices in 2025, driven by rapid feedgas demand growth and an overall tightening of market fundamentals this winter, have enabled Haynesville producers in recent months to begin bringing on production they had held back in 2024. Some key operators also say the outlook for the basin remains strong despite a recent softening of forward gas prices.

Andy Hendricks, CEO of Patterson-UTI, said the services firm added multiple rig and frac fleets in gas basins in the first quarter and that the Haynesville was the "biggest beneficiary."

"It did ramp up a little bit faster in the Haynesville than we thought, especially on the completion side," Hendricks said April 24 during a quarterly earnings conference call with analysts.

"The forward strip on natural gas still looks good, and I think that a number of our customers also did some hedging earlier on in the year at higher natural gas prices," Hendricks said. "So financially, our customers in natural gas seems to be very healthy."

Rig activity, production

Total Haynesville rig activity in 2025 has ranged 33-36 units and on average, the basin has been down a few rigs year to date compared with Q4 2024, Commodity Insights' latest rig data through April 16 showed.

Drilling activity in the basin likely won't pick up meaningfully until the second half of the year due to a mixture of factors, including low forward gas prices during capital planning cycles and operators' emphasis on spending discipline and returning cash to shareholders, according to Commodity Insights' North American gas analysts.

"Production upside in 2025, and to a lesser extent in 2026, will come from the completion of DUCs and deferred turned-in-lines (DTILs)," the analysts said in their latest monthly North American Natural Gas Short-Term Outlook, updated April 23.

Among the range of Haynesville producers, some earlier in the year said they intend to hold fire on adding spending to increase production rates, while the play's biggest name said it will ramp volumes using deferred wells and build productive capacity to be brought online in 2026.

Despite recent declines, Nick Dell'Osso, CEO of leading Haynesville producer Expand Energy, said forward prices continue to support the company's activity plan.

"We made that decision based on our view of a long term cycle, two to three year look ... on a long-term cycle price around $3.50 [MMBtu]," Dell'Osso said April 23 at Semfor's World Economy Summit in Washington, DC.

"The fundamentals are still the same. They really haven't been impacted by the recent volatility," Dell'Osso said.

Fundamentals

Injections to Lower 48 gas storage commenced earlier than normal this spring as relatively milder weather constrained gas-fired heating demand and production held fast near all-time highs. In April, production is totaling 106 Bcf/d, nearly 5 Bcf/d higher than the same period a year ago, Commodity Insights data showed.

Haynesville producers have their share of the increase. Over the last few weeks, output from the Haynesville has approached 13.9 Bcf/d, its highest rate since late last summer. Production is still well off all-time highs near 17 Bcf/d in 2023.

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