Billion dollar changes in the Haynesville Shale, energy prices expected to stay high

BY LIZ SWAINE | Staff writer

https://www.shreveportbossieradvocate.com/business/big-money-is-mov...

Mergers and acquisitions in the Haynesville Shale have reached $7.8 billion so far in 2026, which has outpaced even West Texas’ Permian Basin, according to a J.P. Morgan Securities analyst. There's serious ‘momentum’ in the gas patch.

The investments in the Ark-La-Tex region of the Haynesville have involved upstream and midstream operations, which is both the exploration and production of natural gas and the moving and cleaning of it.

In the Permian Basin, $7.4B was spent on crude oil and what is called ‘wet’ gas, a more liquid gas that includes things like propane and butane, which gives companies multiple revenue streams.

Recent Haynesville Shale deals

On Monday, Dallas-based Silver Hills Energy Partners sold its large portfolio of upstream and midstream assets in the Haynesville Shale to the multinational Centalion Group Ltd. for roughly $1.5 billion, giving Centalion a $2 billion position in the Haynesville. The Wall Street Journal reports Centalion already holds a number of lucrative long-term contracts to export American LNG overseas.

Another deal in which Williams Companies acquired Momentum Midstream was finalized in September. Williams, headquartered in Tulsa, offered $5.5 billion in a combination of cash, debt consideration and Williams’ stock for the Momentum purchase.

Momentum has been a significant player in the NW Louisiana/East Texas Haynesville Shale, with roughly 1 million acres under lease and 4,000 miles of gathering and transmission pipelines.

Chad Zamarin, Williams president and chief executive officer, said the purchase enhances his company's position and growth potential. “With the acquisition now complete, Williams has established a premier Haynesville position that strengthens our ability to serve rapidly growing LNG, power and industrial demand along the Gulf Coast.”

Williams' purchase of Momentum makes the company the largest gatherer of natural gas in the Haynesville Shale and will accelerate two planned major pipeline expansions, according to the company's second quarter earnings presentation.

Not all good news from the Dallas Fed

The most recent quarterly report of the Dallas Federal Reserve Bank showed additional expansion in the oil and gas sector even though uncertainty remains high, especially among exploration and production businesses.

The Fed noted that costs of doing business for both the E&P and oilfield service firms are growing at a faster-than-average pace. Oilfield services firms are also dealing with longer supplier delivery times.

The Dallas Fed asked companies to look into their crystal balls to guess the price of a barrel of West Texas Intermediate crude oil at the end of the year. The average was $88, but responses went as high as $126. For reference, the midmorning Oct. 8 price was hovering at $92.

"My oil price crystal ball broke when the administration first hit Iran," one industry respondent to the Fed's survey said. 

For natural gas, respondents believe the forecast for the next five years is going to trend higher for producers and more expensive for homeowners, moving from a maximum of $3.29 per MMBTU in six months to a max of $4.28 in five years.

When asked when crude oil exports from the Persian Gulf might return to normal levels, the energy business respondents were roughly even on the belief that it might be the second quarter or 2027 or 2028 or later, showing additional uncertainty. 

Expect pump prices to remain high

The majority of respondents feel it will be at least another year before the spread between fuel prices and crude oil prices to return to 2025 levels. That means they expect higher prices at the pump to continue for a while.

As one industry respondent wrote, “Diesel is the mother’s milk of the economy. We are just starting to see the impact on the wider economy.”

On Thursday, the Dallas Fed doubled down on the likelihood of continued higher fuel prices. There are a variety of challenges affecting the crack spread, which is the difference between the price of oil and wholesale prices of diesel, gasoline and jet fuel.

Fed economists believe the likely outcome is that even when the Iran conflict ends and the flow of crude oil through the Strait of Hormuz normalizes, U.S. fuel prices will remain high.

The Fed report said, “…as inventory buffers dwindle, consumers will be increasingly forced to balance the market through reduced consumption, greater price volatility and potentially higher prices.”