Expand Energy on Wednesday called for increasing production at Haynesville and said the Permian basin will be unable to meet rising demand for US natural gas.
Shale gas deposits in the Haynesville region in Texas and Louisiana have drawn producer interest in recent times, along with its more well-known neighbor — the Permian basin in west Texas and New Mexico.
Expand, along with peers EQT and Range Resources, is looking at a second straight year of record natgas production to boost exports as well as meet demand for data centers, industrial projects and electrification.
Production at Haynesville may need to be increased by about 5 billion cubic feet per day over the next four to six years, Expand COO Josh Viets said on a post-earnings call on Wednesday.
Haynesville is a key marginal source of supply that could help set gas prices, the company said, and added that prices above $4 per million British thermal units (MMBtu) would make its western Haynesville acreage competitive.
The company said it realized $2.68 per MMBtu on average for its Haynesville output in the third quarter — slightly more than what it did for its output from northeast and southwest Appalachia.
Expand expects Haynesville well productivity to improve by about 2% to 3% annually.
Increased winter output from private Haynesville operators could create a “near-term supply overhang,” the company said. It forecast pressure on oilfield-service capacity in 2027 and said it expects overall cost inflation in low-to-mid-single-digit range next year.
Expand said EQT Corp and Range Resources’ proposed deal, announced on Monday, does not alter its plans.
Shares of the company fell 2% in afternoon trading.
Expand reported on Tuesday adjusted earnings of $1.46 per share for the quarter ended September 30 — above analysts’ average estimate of $1.27, according to LSEG data.
(Reporting by Dharna Bafna in Bengaluru; Editing by Joyjeet Das)