U.S. natural gas prices are rising, but possibly not high enough to entice increased drilling in the Haynesville Shale.

Haynesville producers, like Aethon Energy, are watching with caution as natural gas strip prices rise.

Dallas-based Aethon is sitting on top of multiple decades of Haynesville gas inventory, said President and Partner Gordon Huddleston.

To massively step up drilling activity, the company needs to see higher prices—preferably above $5/Mcf—for a sustained period.

“We’re starting to see that in 2026, but that really needs to carry beyond ’26 into ’27 and ’28,” Huddleston said during the 2025 CERAWeek by S&P Global Conference.

After two years of low natural gas prices, rising demand is starting to push prices higher.

Henry Hub strip prices currently average $4.70 for the rest of 2025, according to CME Group data.

On March 11, the U.S. Energy Information Administration (EIA) revised its outlook for natural gas prices upward due to higher consumption and lower storage inventories.

The EIA expects Henry Hub spot prices to average $4.20/MMBtu in 2025, 11% higher than its forecast last month.

In 2026, spot prices should average around $4.50/MMBtu in 2026, 8% over the EIA’s last forecast.

Increasing LNG export capacity is also pushing gas demand higher. Producers anticipate an incremental 5 Bcf/d to 6 Bcf/d of demand to fuel new LNG exports within the next 12 months.

But Haynesville operators aren’t racing to step on the gas pedal. Huddleston pointed to the market volatility producers saw in 2024 as a reason for the hesitancy.

A warm winter season and the delayed startup of Golden Pass LNG knocked off around 2 Bcf/d of demand that gas producers expected to see materialize last year.

Low prices forced Aethon, Expand Energy and other gas producers to curtail production and delay turning wells to sales.

“Producers said, ‘here’s this demand coming. We’re going to try to get in front of that,’” Huddleston said, “and it didn’t materialize.”

“It makes it even harder to do it again,” he said.

Haynesville Operators
Aethon Energy is one of the top private producers and acreage holders in the Haynesville Shale. (Source: Source: Piper Sandler)

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Running room

Aethon plans to spend around $1 billion in 2025 and keep gas output relatively flat, Huddleston told Hart Energy in January.

The company could certainly step up activity if it wanted to. In past cycles, Aethon has operated three times as many rigs as the company is running in the Haynesville today.

It could double its capital budget to $2 billion, adding another 500 MMcf/d to 600 MMcf/d of gas output after accounting for base declines, Huddleston said. Aethon’s current gross production averages about 3 Bcf/d.

“But these things don’t happen overnight,” Huddleston said, “and that’s why you need higher pricing.”

The Haynesville alone cannot fuel the entire 5 Bcf/d to 6 Bcf/d of incremental demand needed for LNG exports over the next year, he said.

“You need all these basins, you need people stepping out and you need private capital being attracted,” Huddleston said.

Future exploration will be driven by new entrepreneurial companies, in addition to the big majors and independent producers, he added.

Aethon is one of the few producers exploring new U.S. onshore gas plays. Aethon and publicly traded Comstock Resources are leading delineation of deep western Haynesville gas in Leon and Robertson counties, Texas.

Higher pricing also enables firms to develop the lower-quality Haynesville acreage that wouldn’t have been developed under a lower price environment.

Operators are also looking at the Permian Basin to help fuel U.S. LNG exports. Permian associated gas production reached a record 27.2 Bcf/d in the fourth quarter, per EIA data.

Haynesville output averaged 14.1 Bcf/d in the fourth quarter, down from 15.7 Bcf/d in the first quarter of 2024.

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