After troughing in January, Haynesville rig counts have steadily climbed through the year, reaching 55 rigs in August. The ramp is in line with East Daley Analytics’ Macro Supply & Demand Forecast from March, when we anticipated more drilling to meet growing Gulf Coast demand in 2026.
We’ve consistently made the case for more drilling in Louisiana and East Texas to fill a supply/demand gap identified in the Macro S&D Forecast, and some producers have stepped up. Most of the rig adds have come from private operators, who have taken advantage of above-breakeven prices most of the year. The largest producers, namely Expand Energy (EXE) and Aethon, are taking a more cautious approach.
The current Haynesville rig count is skewed heavily towards exploratory drilling in East Texas, where we observed 30 rigs in the field in July, well above the ~20 rigs required to maintain production levels. This is in contrast to declining volumes out of that sub-region, indicating that a significant build of drilled but uncompleted wells (DUCs) is in progress.
Meanwhile, there is an equally drastic DUC burn on the Louisiana side of the basin. Drilling activity is hovering at roughly maintenance levels (22 rigs), but residue gas production has grown over 1 Bcf/d since January. Looking ahead, East Daley expects ~13 rigs will be needed in the near term on the Louisiana side, as well as a DUC burn on the East Texas side, to balance the market in 2026.
On the demand side, Haynesville egress capacity and flows are growing. LEAP throughput cracked 2 Bcf/d for the first time in August, averaging 1.8 Bcf/d for the month. Williams’ (WMB) Louisiana Energy Gateway (LEG) started operations in late July and is already delivering nearly 700 MMcf/d on average. Momentum’s NG3 project should be online before the end of the year and add another 1.7 Bcf/d of egress capacity. The NG3 line should help debottleneck some of the productive capacity in East Texas, where Momentum has an extensive gathering footprint.
These new pipes are needed to serve nearly 5 Bcf/d of new LNG demand expected in 2026. Growth will come from Golden Pass LNG (+2.6 Bcf/d), which is in the early stages of its ramp, as well as incremental gains at Plaquemines LNG (+3.9 Bcf/d) and Corpus Christi Stage 3 (+2.2 Bcf/d), both of which recently upsized their expected run-rate utilization (by 40% and 10% respectively).
Producer guidance is clear. EXE has no plans to add rigs yet and is adamant that other basins will need to chip in to meet LNG demand. As far as we can tell, Haynesville reserves are sufficient for the long term, but EXE is reluctant to burn through its premium acreage too quickly. While Haynesville wells boast higher initial production (IP) rates, the decline curves are correspondingly steeper. In any case, we find it difficult to find enough molecules beyond the Haynesville, especially at current prices, which means prices will rise before both the Haynesville and other basins are incentivized to move. – Oren Pilant Tickers: EXE, WMB.
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