Expand’s Dell'Osso: E&Ps Show ‘Unusual’ Discipline with $4 NatGas Strip

Haynesville Shale producers are exhibiting rare discipline with elevated natural gas prices, forcing some analysts to redraw growth forecasts.

Haynesville E&Ps aren’t racing to drill up scarce shale gas inventory as the “golden age of natural gas” begins to take form.

Henry Hub futures average $3.56 for the rest of 2025, according to CME Group data. Forward prices are at a healthy $4/Mcf for the rest of 2026, Expand Energy President and CEO Nick Dell’Osso said. He spoke April 24 at the “Powering AI Global Leadership Summit” hosted by Oklahoma State University’s Hamm Institute for American Energy.

Yet, U.S. gas rigs are down from levels seen a year ago when prices hung around $1.50, according to Energy Information Administration (EIA) data.

“That’s really unusual,” Dell’Osso said. “When you see a forward curve of $4 for natural gas you should see that rig count go up.”

Rising demand for LNG exports has Haynesville gas well positioned for growth, given its proximity to the Gulf Coast. Expand is the largest Haynesville gas producer.

Majors, international capital, private equity and even new players like Citadel are excited about the Haynesville’s future.

“The time has come for the Haynesville,” BP CEO Murray Auchincloss said during the CERAWeek conference in Houston in March.

Still, Haynesville E&Ps haven’t stepped on the gas pedal yet.

The Haynesville rig count rose by one to 32 during the week ended April 25, according to Baker Hughes rig count data.

Compared to last year, the play’s rig count is down from an average of 35, when Henry Hub prices averaged $2.19. Haynesville rigs averaged 52 in 2023 at $2.53 gas.

The caution is warranted, Dell’Osso said: “There’s still quite a bit of uncertainty as to what happens beyond 2026.”

Natural gas futures have slipped from over $4.50-plus levels seen in March and April, according to CME Group data. Meanwhile, Haynesville drilling faces high pressure, high temperature (HPHT) conditions that require elevated breakeven prices.

Higher drilling and completion costs require prices of around $5/Mcf to profitably expand drilling, said Gordon Huddleston, president and partner at Aethon Energy Management, Haynesville’s second-largest producer.

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Imbalance incoming

Price volatility at key hubs served by Haynesville supply continues to complicate drilling plans, according to Enverus Intelligence Research (EIR).

Layer in more than 105 Bcf/d of production and healthy storage injections, and there’s not a lot of room for upside, according to East Daley Analytics (EDA).

But a surge of new LNG demand picking up in 2026 suggests low prices will not last forever.

The $4 strip price for 2026 “is going to have to move up now in order to incite production to match snowballing LNG demand,” Jack Weixel, senior director at EDA, told Hart Energy.

U.S. LNG exports averaged 11.9 Bcf/d in 2024. But new LNG export projects could push domestic LNG feedgas demand to nearly 20 Bcf/d by mid-2026.

Around 10 Bcf/d of new LNG export capacity is under construction right now, Dell’Osso said.

New demand will stem from projects like Golden Pass LNG, expected to come online later this year.

Venture Global’s Plaquemines LNG’s Phase 1 and Corpus Christi’s Stage 3, which came online in late 2024, are also ramping up toward full capacity.

Plaquemines LNG Phase 2 and Venture Global’s CP2 LNG are expected online in 2026.

Future demand will stem from Costa Azul LNG on Mexico’s Pacific coast and the Delfin floating LNG terminal in the Gulf of Mexico, Weixel said.

That’s before factoring in AI data center demand and demand for domestic power generation.

“The current price pain is temporary and will only delay a production ramp by around three months,” Weixel said.

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Outlook revisions

Enverus Intelligence Research recently lowered its Haynesville growth estimates for 2025 and 2026 due to operator hesitancy.

EIR now estimates Haynesville output will grow by 1.7 Bcf/d to exit 2025, down from 1.9 Bcf/d in the firm’s previous forecast.

In 2026, Haynesville output will grow by 1.3 Bcf/d, lower than the previous 1.6 Bcf/d forecast, said EIR director Alex Ljubojevic.

Haynesville dry gas production exited 2024 at about 14.1 Bcf/d, per EIA data.

EIA forecasts have Haynesville gas supply exiting 2025 at 15.1 Bcf/d and 18.3 Bcf/d in 2026, according to its April 10 Short Term Energy Outlook.

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