It has been a rough three months in the Haynesville Shale, says Shreveport mineral consultant Skip Peel, who points to the fact that this has been the slowest first quarter there in 17 years.
One recent bump was the $1.2 billion purchase by the Miami-based hedge fund Citadel of Paloma Natural Gas' relatively small position in the Shale.
East Daley Analytics, an oil-and-gas-centric site that tracks mergers and acquisitions, says this deal shows there is renewed confidence in Haynesville's potential.
"This strategic acquisition highlights Haynesville's value as a leading source for U.S. LNG (liquefied natural gas) exports," it says.
The Haynesville Shale is a natural gas-rich area that extends through north Louisiana and east Texas and beyond.
A map of the Haynesville Shale region in Louisiana and Texas.
Robert Mills, the manager of two local companies that work in oil and gas exploration and production in the Ark-La-Tex and Mississippi, is not seeing great confidence. He says the smaller independent producers he knows are watching how low the price will go.
"I mean, everybody's worried about bottom, not the top," Mills said. "We all know that we'd like to see $5, but we know that we've seen closer to $3 and that's what kept the rig count down. And so until we see a more stabilized $4-plus, closer to $5, I think again, almost everybody I know has completely withdrawn from drilling wells.
"From a working interest standpoint, it is just such a big game only the big guys can do it. Nobody else, to my knowledge, that has participated in these wells has anything but regrets for participating because these large companies that operate the wells are just absolutely skinning the royalty owners and the non-operators, just skinning them."
Peel believes as the ownership of Shale mineral rights continues to consolidate, prices should go higher.
"Natural gas should continue to increase in price because consolidation has reduced the number of operating companies, and those companies are holding back production to increase the price."
It is the chicken or the egg.
Aethon, the shale's largest producer, has said it will not ramp up drilling until prices rise. It is looking for $5/MMBTU as opposed to the $4.50 projected into 2026 and the lower $3.75 projections into 2027-28.
Other companies, such as Expand Energy, created from the merger of Chesapeake and Southwest Energy, is looking to increase their production into 2026.
East Daley believes that eventual demand is going to outstrip production and that prices could shoot to $8 MMBTU, which could be a short-lived bump.
Mills says when prices go up, activity will, too, and then extra supply will push prices down.
An aerial image shows gas well production in the area of Stonewall-Frierson Road area east of I-49.
"So, until we see that LNG bump and it pushes that number up into the $5 range, and of course, yes, people will start drilling," Mills said. "And of course, yes, they'll push it right back down to four. It's just the way the market always has been and always will be.
"You've got to learn your lessons that there's nothing easy about this energy business, and it's gotten more expensive and more difficult over time."
