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A Call to Haynesville Producers

Hey Trader,

A Call to Haynesville Producers

The once-booming Haynesville shale producers are facing stormy seas as the collapse of US natural gas prices threatens their profitability.

With mild weather and surging gas output, production in the region has become increasingly uneconomical, pushing producers to the brink of shutdowns.

According to S&P Global, even the most efficient shale gas producers in Haynesville are struggling to break even, with breakeven prices hovering around $2.67 per mmBtu.

For those aiming to generate a 30% return on free cash flow, the breakeven threshold rises to $3.20 per mmBtu.

Despite Chesapeake's pledge to cut production and a growing backlog of drilled but uncompleted wells (DUCs) in the basin, Haynesville's production is expected to plateau at just over 15 Bcf per day.

This stagnation raises the specter of further production curtailments in the region.

While Henry Hub natural gas futures saw a slight uptick this week to $1.85 per mmBtu, they remain in steep contango—the steepest since October 2023.

The widening spread between near-term and future contracts, now at $0.40 per mmBtu, reflects ongoing market uncertainty.

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In these challenging times, it's crucial for Haynesville producers to stay informed and equipped with the right strategies to weather the storm.

Join us for our upcoming training webinar, where industry experts will delve into the intricacies of the US gas market and provide actionable insights to navigate these turbulent waters.

Don't miss out on this opportunity to fortify your trading approach and seize potential profit opportunities.

Register now and chart a course to success in the US gas market!

To your trading success,

Anthony Speciale

Speciale Analysis

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